Suppliers may be required to carry insurance only when necessary to protect the interest of the Postal Service. Examples of situations appropriate for insurance include:
The Postal Service is not usually concerned with the insurance carried by fixed-price suppliers, except in special circumstances such as the following:
In circumstances such as those described above, these types and amounts of liability insurance may be required:
Compliance with applicable workers’ compensation and occupational disease statutes is required, and employers’ liability coverage must be obtained when available. In jurisdictions where occupational disease is not compensable by law, the supplier must carry insurance for occupational disease under the employers’ liability section of the insurance policy.
The supplier must carry bodily injury liability insurance, with minimum limits of $100,000 per person and $500,000 per accident, on a comprehensive form of policy. The CO, at his or her discretion, may require higher limits of insurance coverage. Clause 7-4: Insurance should be amended to reflect the higher levels of insurance coverage. The supplier must carry property damage liability insurance in an amount determined by the CO when the nature of the contract operations warrants it, or when those operations are not separable from the supplier’s commercial operations.
The supplier must carry automobile liability insurance on a comprehensive form of policy that provides for bodily injury and property damage liability covering the operation of all automobiles used in contract performance. Minimum limits of $100,000 per person and $500,000 per accident for bodily injury and $100,000 per accident for property damage must be carried. The CO, at his or her discretion, may require higher limits of insurance coverage. Clause 7-4: Insurance should be amended to reflect the higher levels of insurance coverage.
A qualified program of self-insurance covering any kind of liability may be approved in place of any type of insurance when found to be in the interest of the Postal Service. However, in a jurisdiction where workers’ compensation does not completely cover employers’ liability to employees, a program of self-insurance for workers’ compensation may be approved only if:
Suppliers providing the following categories of professional services must carry errors and omissions (malpractice) insurance:
Insurance coverage for these practitioners should be at least $200,000, unless the CO determines that a different limit is needed to protect the interests of the Postal Service. The CO may waive the requirement for errors and omissions insurance in whole or in part, with the concurrence of Legal Counsel.
The CO may require other professional services suppliers to carry errors and omissions insurance when in the interest of the Postal Service.
When insurance is required, it may be provided either by specific insurance policies or by the supplier’s existing insurance policies. When existing policies are used, they must be amended to make the Postal Service a loss payee. Clause 7-4: Insurance must be included when a supplier is required to carry insurance. Clause 7-5: Errors and Omissions must be included when errors and omissions insurance is required.
When insurance (other than errors and omissions insurance issued on an occurrence basis) is required by the contract, the insurance policy must contain an endorsement to the effect that a cancellation of or material change in the policy that adversely affects the interest of the Postal Service will not be effective until at least 30 days after written notice of the cancellation or change is given to the CO.
