52.228-7 Insurance-Liability to Third

Persons.

As prescribed in 28.311-1 , insert the following clause:

Insurance-Liability to Third Persons (Mar 1996)

(a)

(1) Except as provided in paragraph (a)(2) of this clause, the Contractor shall provide and maintain

workers’ compensation, employer’s liability, comprehensive general liability (bodily injury),

comprehensive automobile liability (bodily injury and property damage) insurance, and such other

insurance as the Contracting Officer may require under this contract.

(2) The Contractor may, with the approval of the Contracting Officer, maintain a self-insurance

program, provided that, with respect to workers’ compensation, the Contractor is qualified pursuant

to statutory authority.

(3) All insurance required by this paragraph shall be in a form and amount and for those periods as

the Contracting Officer may require or approve and with insurers approved by the Contracting

Officer.

(b) The Contractor agrees to submit for the Contracting Officer’s approval, to the extent and in the

manner required by the Contracting Officer, any other insurance that is maintained by the

Contractor in connection with the performance of this contract and for which the Contractor seeks

reimbursement.

(c) The Contractor shall be reimbursed-

(1) For that portion-

(i) Of the reasonable cost of insurance allocable to this contract; and

(ii) Required or approved under this clause; and

(2) For certain liabilities (and expenses incidental to such liabilities) to third persons not

compensated by insurance or otherwise without regard to and as an exception to the limitation of

cost or the limitation of funds clause of this contract. These liabilities must arise out of the

performance of this contract, whether or not caused by the negligence of the Contractor or of the

Contractor’s agents, servants, or employees, and must be represented by final judgments or

settlements approved in writing by the Government. These liabilities are for-

(i) Loss of or damage to property (other than property owned, occupied, or used by the Contractor,

rented to the Contractor, or in the care, custody, or control of the Contractor); or

(ii) Death or bodily injury.

(d) The Government’s liability under paragraph (c) of this clause is subject to the availability of

appropriated funds at the time a contingency occurs. Nothing in this contract shall be construed as
implying that the Congress will, at a later date, appropriate funds sufficient to meet deficiencies.

(e) The Contractor shall not be reimbursed for liabilities (and expenses incidental to such liabilities)-

(1) For which the Contractor is otherwise responsible under the express terms of any clause

specified in the Schedule or elsewhere in the contract;

(2) For which the Contractor has failed to insure or to maintain insurance as required by the

Contracting Officer; or

(3) That result from willful misconduct or lack of good faith on the part of any of the Contractor’s

directors, officers, managers, superintendents, or other representatives who have supervision or

direction of-

(i) All or substantially all of the Contractor’s business;

(ii) All or substantially all of the Contractor’s operations at any one plant or separate location in

which this contract is being performed; or

(iii) A separate and complete major industrial operation in connection with the performance of this

contract.

(f) The provisions of paragraph (e) of this clause shall not restrict the right of the Contractor to be

reimbursed for the cost of insurance maintained by the Contractor in connection with the

performance of this contract, other than insurance required in accordance with this clause;

provided, that such cost is allowable under the Allowable Cost and Payment clause of this contract.

(g) If any suit or action is filed or any claim is made against the Contractor, the cost and expense of

which may be reimbursable to the Contractor under this contract, and the risk of which is then

uninsured or is insured for less than the amount claimed, the Contractor shall-

(1) Immediately notify the Contracting Officer and promptly furnish copies of all pertinent papers

received;

(2) Authorize Government representatives to collaborate with counsel for the insurance carrier in

settling or defending the claim when the amount of the liability claimed exceeds the amount of

coverage; and

(3) Authorize Government representatives to settle or defend the claim and to represent the

Contractor in or to take charge of any litigation, if required by the Government, when the liability is

not insured or covered by bond. The Contractor may, at its own expense, be associated with the

Government representatives in any such claim or litigation.

(End of clause)

Parent topic: 52.228 [Reserved]