So you want to bid on a city contract, or maybe you just won a city contract and it is time to get the paperwork submitted and get to work. There is one small problem: you don’t know if the insurance you have meets the city’s requirements. What do you do?! Take a deep breath, and then keep reading:
The city will provide you with a copy of the insurance requirements either with the bid packet or after the contract has been awarded. They probably look something like this:
The insurance requirements may also be on the website, and can be found by searching “[city name] insurance requirements”. For instance, the City of Long Beach insurance requirements can be found by clicking here. You can also check with the city’s risk management website.
You should provide the insurance requirements to your Hayes Broker in order to ensure that you have the proper insurance for the city contract. This information should be provided as soon as possible, and preferably prior to bidding or prior to signing the contract. The sooner your broker knows what insurance you will need, the sooner they can put coverage in place and advise you of additional costs.
Best Practices for Meeting City Requirements
Most city contracts require at a minimum:
- Workers compensation & employer’s liability coverage
- Commercial general liability
- Automobile coverage
Cities may also require:
- Umbrella/excess liability coverage
- Bid & performance bonds, including fidelity or crime coverage
Your Hayes Broker will review the city contract insurance requirements with you to determine if you have all of the required policies. Your broker may also require additional information from you to provide quotes on any additional coverage you may need.
How To Ensure You Have Enough Coverage
When you are just starting out, lower limits of insurance may be more cost-effective for your business. However, city contracts often require limits of insurance above and beyond what you already have or what the state minimum requirements may be. Failure to provide adequate limits may result in loss of the bid or the job.
Your Hayes Broker will review these limits with you and advise the premium investment to increase your coverage to conform with the contract requirements. Sometimes this means increasing the limits are current policies, but in rare cases the policy you have may need to be cancelled and rewritten with higher limits through a different insurance company.
It is usually not cost effective to increase the limits of coverage only for the length of the contract, and most carrier will not increase coverage for a short period of time. Policy changes are usually made until the end of the current policy term and are renewed at these same limits.
What About Additional Insureds and Certificates of Insurance?
Depending on the type of policy you purchased, your policy may include coverage for additional insureds. If it doesn’t, your Hayes Broker will advise you of any additional costs that may be required to add the entity as an additional insured on your policy.
If your city contract requires additional insured wording on the certificate of insurance, your Hayes Broker will review this wording with the insurance carrier to be sure that your policy will adequately cover the additional insured as required.