Insurance Guidelines for General Vendors

An exposure also exists when outside organizations and individuals use or conduct operations at facilities owned by or under the control of the University. To reduce this financial exposure, the Risk Management & Safety recommends vendors doing business with the University, as well as outside organizations and individuals using University facilities, to maintain insurance as necessary to reasonably protect the financial interests of the University.Risk Management & Safety recommends the following minimum insurance requirements be included in any agreement as a contractual obligation which the vendor must be in compliance with before commencing work, providing goods, or using University facilities:

I. Insurance

Commercial General Liability "CGL":

  • $1,000,000 Each Occurrence

  • $2,000,000 Aggregate

  • $2,000,000 Products & Completed Operations Aggregate

  • $1,000,000 Personal & Advertising Injury

  • $100,000 Fire Damage (Any One Fire)

  • $5,000 Medical Expense (Any One Person)

 

Commercial Auto Liability: (*If driving on university-owned property or driving University personnel - may be waived if contract does not involve use of motor vehicle)

  •      $1,000,000 Combined Single Limit

 

Workers’ Compensation:

  •   Statutory Limits Plus

  •  $1,000,000 Minimum Employers Liability Limits

 

Professional Liability/Errors & Omissions: (If vendor is providing professional, technical service (medical, engineering, legal, business/marketing consultants, architecture etc.)

  •  $1,000,000 Each Occurrence

  •  $1,000,000 Aggregate, including proof of coverage for up to three years after completion of the project

 

II. Additional Requirements:

  1. Higher limits or specific requirements may be recommended depending on the activity. Please consult Risk Management & Safety for recommended limits with regards to high risk activities such as those involving alcohol, or charter services, aircraft, watercraft, minors, health consultants, construction projects, engineering, environmental hazards, or information technology. 

  2. All vendors parties should provide a Certificate of Insurance stating that there is insurance in effect with the minimum limits required by the university. All completed Certificates of Insurance shall be sent to the attention of the Auburn University department negotiating the contract.

  3. Insurance policies must be issued by an insurance company licensed to do business in the State of Alabama carrying an A.M. Best’s rating of A- VII or Standards & Poor’s rating of BBB+ or better, and the certificate must be signed by an authorized agent. 

  4. If any subcontractor is used to fulfill this contract, they or the vendor on their behalf, shall carry the same coverages and limits of insurance outlined herein.  It shall be the vendor’s responsibility to ensure compliance of this requirement. 

  5. All coverage should be written on an occurrence basis. 

III. Waivers:

In certain cases, the general recommendations for certain insurance coverage may be waived, reduced or exempt. The most notable exemptions include, but are not limited to the following:

  1. Vendors with the financial strength to self-insure part or all of insurance requirements outlined above as evidenced in audited financials reflecting a net worth adequate to absorb self-insured losses.
  2. A sole proprietor operating out of his or her personal residence with low exposure) may be allowed to substitute the CGL and Auto requirements with a business activities endorsement on a personal homeowners and auto liability policy, or be allowed a full exemption depending on the activity. 
  3. If a vendor/contractor elects to participate in a self-insured workers’ compensation program, the A.M. Best’s or Standard & Poor’s rating requirement may be waived as long as self-insured entity or group trust is in good standing with the appropriate governmental agency and holds a current exemption certificate or certificate of authority. If the authorization to self-insure is subject to a specific and/or aggregate limit, the self-insured entity or group shall provide evidence of excess insurance.
  4. In situations where goods are purchased and no delivery or notable on-site support is provided, the requirements for automobile liability and workers’ compensation may be waived. Some limited deliveries with private passenger cars and lights trucks may also qualify for this exemption and will be handled on a case by case basis.
  5. If the transaction involves the purchase or goods with no service or installation through a sales agent, authorized dealer or manufacturer’s representative, the required product liability coverage may be provided by the manufacturer. The manufacturer must provide a certificate of insurance with language accepting the product liability exposure without any limitations or restrictions as respect to the work or services performed by the dealer, sales agent or manufacturer’s representative. 
  6. In very limited situations, if a vendor is allowed a workers’ compensation exemption due to the limited number of employees, the coverage requirement may be waived if the type of work is not understood to be hazardous classification. This exception will not be considered on any construction projects. A waiver and/or release of liability may be required if a workers’ compensation exemption is allowed.
  7. Any entity or group associated or affiliated with the State of Alabama or United State government are typically exempt from all insurance requirements. This exemption may also be offered to other governmental operations and/or entities subject to review of the specific situation.

IV. Sample Certificate of Insurance and Additional Insured Endorsement

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