RESPONSIBLE CITY AGENCY: Purchasing and Risk Management
KEYWORDS: Contracts, insurance, third party liability.
1. General
1.1 SLCC Section 3.25.020 (Insurance and securities) provides that:
“A. When directed by the mayor, city council or city attorney, or any of their designees, or when required by state statute or city ordinance, evidence of insurance coverage, and permit, performance, payment or other bonds, or letters of credit or other securities, shall be provided to the recorder in a form and in amounts approved by the city attorney.”
1.2 SLCC Section 3.25.020A(3) provides that such bonds, insurance or other securities shall “be in sums sufficient to protect the city and its interests.”
1.3 SLCC Section 3.25.020B provides that “the city attorney shall have authority … to promulgate rules for adoption by the mayor regarding acceptable requirements for insurance, bonds or other securities.”
1.4 Historically, the City has based the third party liability insurance requirements for contracts that the City enters into for goods or services to be provided to the City on the government immunity caps adopted by the Legislature. In the past, the caps were at levels consistent with the levels of insurance carried by most businesses. However, recent increases in the government immunity caps have created a disconnect with the levels of insurance generally carried by businesses, particularly small businesses. As a result, the City is seeing fewer responses to its requests for proposals and increased prices reflecting the increased insurance cost in situations where the increased cost does not provide equivalent benefit to the City.
1.5 The City Attorney and Risk Management have developed a new approach to determining the amount of insurance to be required for a particular contract. The approach is based on a matrix which assigns a particular business activity to one of three risk categories – low, standard, or high. Each risk category has a specified amount of insurance to be required for that category.
1.6 Notwithstanding the adoption of this policy, the authority of the City Attorney pursuant to SLCC § 3.25.020B to waive any requirements with respect to insurance in City contracts remains available.
2. Responsibilities
2.1 Insurance for City contracts shall be based on the amounts provided in the attached “Salt Lake City Insurance Matrix” (the “Matrix”) (Exhibit A).
2.2 For each contract, city contract personnel shall determine the type (or types) of service or contractor involved in the performance of the contract.
2.3 If the type of service or contractor is listed on the Matrix, the assigned risk category for that type of service or contractor determines the amount of insurance required for that contract. Any indicated “Special Coverages” also apply.
2.4 For example, “Advertising/Public Relations” is listed as “L” or “low” risk. For a “low” risk contract, Commercial General Liability (CGL) coverage is required in the amount of $500,000 per Occurrence/$1 million aggregate; Commercial Auto coverage is required in the amount of $100,000 per person/$300,000 per accident/$50,000 Property Damage or single combined limit of $500,000; and Worker’s Compensation is required in the amount of the statutory limits. The Matrix also indicates that “Advertising/Public Relations” requires a “special coverage” of Professional Liability in the amount of $1,000,000.
2.5 If the contract involves multiple types of service or contractor, the insurance requirements for the highest level of risk apply for the contract. All special coverages for any of the types of service or contractor also apply.
2.6 If the type of service or contractor involved with the contract is not listed on the Matrix, city contract personnel must ask Risk Management for a determination of the applicable insurance requirements for that specific contract.
2.7 If city contract personnel believe that the insurance required by the Matrix (or by Risk Management if the type of service or contractor is not listed on the Matrix) is inappropriate for the particular contract involved, a waiver may be request from the City Attorney pursuant to SLCC § 3.25.020B.
2.8 A request for a waiver shall be sent to the Risk Manager who shall forward it with the Risk Manager’s recommendation to the City Attorney. The request shall provide the specific facts that would justify a waiver, including, for example, an explanation of the limited nature of the risk to the City under the specific circumstances and whether the cost to the City of the insurance required by the Matrix is justifiable under the circumstances.
CURRENT REFERENCES: City Policy, Chapter 2.03 “Contracts”;
Administrative Rules, Community, and Economic Development “Insurance”
Promulgated and approved by the City Attorney pursuant
to SLCC § 3.25.020B on May 14, 2008
EFFECTIVE DATE (Date signed by Mayor): June 23, 2008
(Signed for the Mayor by David Everitt)
Salt Lake City Insurance
Matrix
Category
Code
Coverage
Amount of Coverage
LOW
L Commercial General
Liability (CGL) $500,000 per Occurence/$1 Million
aggregate
Commercial Auto
*
$100,000 per Person/$300,000 per accident/ $50,000 Property
Damage
OR Single Combined Limit of
$500,000
Worker's
Compensation
Statutory
Limits
STANDARD
S Commercial General
Liability (CGL) $1 Million per Occurrence/$2 Million
aggregate
Commercial Auto
*
$500,000 per person/$1 Million per accident/$250,000 Property
Damage
OR Single Combined Limit of $1 Million
Worker's
Compensation
Statutory
Limits
HIGH
H Commercial General
Liability (CGL) $2 Million per Occurrence/$3
Million
aggregate
Commercial Auto
*
$1 Million per person/$2 Million per accident/ $250,000 Property
Damage
OR Single Combined Limit of $2 Million
Worker's
Compensation
Statutory
Limits
SPECIAL
COVERAGE As
indicated
For example, Professional Liability, Pollution Liability - etc.
*Commercial Auto is required unless clearly
unneeded.
TYPE OF
SERVICE OR
CONTRACTOR
H, S OR L
*
SPECIAL COVERAGE'S
Advertising/Public
Relations
L
Professional Liability
$1,000,000
Aerial
photography
H
Alarm
Services
L
Professional Liability
$1,000,000
Alcohol and Drug
Prevention
L
Professional Liability
$1,000,000
All other
Equipment
S
Analytical Studies and
Surveys
L
Professional Liability
$1,000,000
Animal Control
Services
H
Any Construction project or Work in the Public Way Not Listed
S
Any type of Architecture
L
Professional Liability
$1,000,000
Appraisal Services (Not Real
Estate)
L
Professional Liability
$1,000,000
Appraisals Services, Real
Estate
L
Professional Liability
$1,000,000
Armored Car
Services
S
Art
Project
Project by
Project
Auctioneering
Services
L
Auto & Trailers &
Accessories
S
Building Cleaning,
Exterior
S
Building
Materials
S
Buildings and Property in Public
Way
S
Bus and Taxi Services, Limousines, Pedi-Cabs, Horse Drawn Carriages and
Vans
S
Garage Keepers Liability $1,000,000
Business Loans
S
Cafeteria and Restaurant
Services
S
Card Access Security
Services
S
Carpet Cleaning, Dyeing, Installation and
Repair
S
Chemical Processing and
Storage
H
Pollution Liability
$2,000,000
Chemicals -
Herbicide/Fungicide/Insecticide/Pesticide/Rodenticide
H
Chemicals - Snow & Ice-melt & De-icing
S
Chemicals - Water
Treatment
H
Collection Services (past due
payments)
L
Communication Towers &
Antennas
S
Computer
Equipment
S
Computer-
Hardware
S
Computer-
Software
S
Concessions, Catering, Vending: Mobile and
Stationary
S
Constable
Services
L
Professional Liability
$1,000,000
Construction & Paving
Materials
L
CONSTRUCTION-
Dredging
S
Watercraft Liability $1,000,000.
CONSTRUCTION- Lighting
(streets)
H
Construction
Management
S
Professional Liability
$1,000,000
CONSTRUCTION- Power Line Construction, Installation,
Maintenance-(non-streets)
H
CONSTRUCTION- Roofing (including asbestos
abatement)
H
CONSTRUCTION-ASBESTOS ABATEMENT
PROJECTS
H
Contractors Asbestos Pollution Liability $1,000,000
CONSTRUCTION-BUILDING
CONSTRUCTION
S
Builder's Risk-Same
Amounts
CONSTRUCTION-Power Line Construction, Installation, Maintenance-
(streets)
H
CONSTRUCTION-SEVERE-HAZARDOUS
PROJECTS
H
CONSTRUCTION-SIGNIFICANT-HAZARDOUS
PROJECTS
H
Consulting Services
L
Professional Liability
$1,000,000
Counseling
L
Professional Liability
$1,000,000
Courier/Delivery
Services
L
Crime Prevention- Security Guards-
Armed
S
Security Guard Professional Liability $1,000,000
Crime Prevention- Security
Guards-
Unarmed
S
Crossing Guard
Services
H
Cylinder Gases &
Propane
H
Day Care or
Camps
H
Decorations, Seasonal,
Displays
L
Demolition
H
Draftsman Services,
Professional
L
Professional Liability
$1,000,000
Drapery Installation and
Repair
S
Economic Impact Studies
L
Professional Liability
$1,000,000
Electronic and Communication Equipment Services- including maintenance and
repairs
S
Elevators & Escalators
H
Emergency Medical and Ambulance
H
Medical Malpractice
$2,000,000
Employment Agency and Search Firm Services
L
Professional Liability
$1,000,000
Employment Practices
L
Professional Liability
$1,000,000
Environmental
H
Professional Liability
$2,000,000
Ergonomics
S
Professional Liability
$1,000,000
Feasibility Studies
L
Professional Liability
$1,000,000
Financial
L
Professional Liability
$1,000,000
Fire Protection- Service &
Maintenance
H
Fire Suppression Systems
H
Fireworks Display and Carnival Services Decking,
etc.
H
Fleet Management Maintenance Serv.
S
Garage Keepers Liability $1,000,000
Flooring to Include Refinishing and
Sealing
S
Fuel Service Equipment Service &
Maintenance
S
Garbage/Trash - Containers, Cans,
Receptacles
L
Garbage/Trash Removal and Disposal
S
Pollution Liability
$1,000,000
Graphic Arts Services (Not
Printing)
L
Hazardous Material
Services
H
Pollution Liability
$2,000,000
Heating, Air Conditioning, and Ventilation
Services
S
Heavy Mobile Equipment
S
Hose - Hydraulic, Rubber,
Industrial
L
Hydraulic System
Repair/Rebuild
L
Ice Cream Vendors
S
Industrial Supplies
L
Inspecting,
Structural
L
Professional Liability
$1,000,000
Insurance - Brokerage
Services
S
Professional Liability
$1,000,000
Interior Design/Decorator
Services
L
Irrigation Systems- Non
Roadways
S
Irrigation Systems- Roadways
S
Janitorial/Custodial Equipment &
Supplies
L
Janitorial/Custodial Services
S
Laboratory
Equipment
L
Laboratory
Services
H
Professional Liability
$2,000,000
Land Surveying
L
Professional Liability
$1,000,000
Laundry & Uniform
Cleaning
L
Lawn/Ground Maintenance
Equipment/Services
L
Leak Detection Services: Gas, Water,
Chemical
L
Leasing
S
Legal
L
Professional Liability
$1,000,000
Loans to Others
L
Locksmith
Services
L
Mail & Package
Delivery
L
Management
S
Professional Liability
$1,000,000
Marketing
L
Professional Liability
$1,000,000
Medical & First Aid
Supplies
S
Medical & Healthcare
Services
S
Professional Liability
$2,000,000
Medical-Veterinary
Services
S
Professional Liability
$1,000,000
Metal Fabrication, Shearing,
Machining
S
Moving
Services
S
Non-Bid Services valued under
$2,500
L
Occupational Medicine-Testing &
Services
S
Professional Liability
$1,000,000
Office
Equipment
S
Office
Plants
L
Oil - Hydraulic, Analysis/Service,
Pickup/Disposal
S
Parking Meter and Garage Management and Meter
Collection
S
Parking Services: Operation, Admission, Supervision
S
Paving & Repair of Parking Lots or Sidewalks or Paved
ways
S
Pest Control
(Buildings)
H
Pollution Liability
$2,000,000
Pest Control (Other Than
Buildings)
H
Pollution Liability
$2,000,000
Petroleum and Fuel
Tanks
H
Pollution Liability
$2,000,000
Petroleum and Fuel Tanks -Filling
Services
H
Pollution Liability
$2,000,000
Photographic Equipment/Supplies, Film
Processing
L
Photography (Not Including Aerial
Photography)
L
Pipe
L
Plan
Review
S
Planning,
Urban
L
Professional Liability
$1,000,000
Plumbing
S
Pollution Control- Inspecting,
General
H
Professional Liability
$1,000,000
Printing or
Binding
L
Printing Services: Blue Prints, Blue Line,
Large
L
Property Management
Services
S
Purchasing- Free On Board Deliveries (Forklifts or Mechanical
S
Loading/Unloading Devices to be
used)
Purchasing- Free On Board Deliveries (No use of Forklifts or
Mechanical S
Loading/Unloading
Devices)
Records Management and
Disposal
S
Recycling Services, (Including
Collection)
S
Rentals - Event &
Equipment
S
Restoration/Reclamation Services of
Land
S Pollution Liability
$1,000,000
Safety Engineering and Accident
Studies
S Professional Liability
$1,000,000
Safety Equipment &
Supplies
S
Security
Systems
S
Septic Tank Services
S Pollution Liability
$1,000,000
Service
awards
L
Sewage Collection, Treatment, and Disposal; Solid
Wastes;
H Pollution Liability
$2,000,000
Shelters, Carports, Portable Buildings-
Installation
S
Site Assessment and Ancient
Studies
L Professional Liability
$1,000,000
Speakers/Entertainers/Trainers
L
Sports Professionals Services-
Marketing
L
Steam Boilers, Steam Heating, and Power Plant
Items
H
Steel & Metal Products
L
Storage Space Services (Not Building
Lease)
S
Storm Drain Cleaning, Repair, and Sludge Removal
Services
S
Street - Sweeping, Snow
Removal
S
Street
Lighting
S
Tank Removal, Disposable, and Related Services
(Including
S Pollution Liability
$1,000,000
Telephone Services & Telecommunication
Services
L
Temporary
Employment
S
Testing and Monitoring Services, Air, Gas and
Water
S Professional Liability
$1,000,000
Testing and Training Apparatus, Instruments,
Machines
S
Tile, Stone &
Ceramics
L
Tinting and Coating Services, Glass (Automobile and
Buildings)
S Garage Keepers Liability
$1,000,000
Towing
Services
S
Traffic Barricade & Warning Sign
rental
L
Traffic Control Equipment and
Accessories
S
Training
S
Transcription Services: Legal and
Medical
L Professional Liability
$1,000,000
Transit Management and Operational Services
S
Translation
Services
L
Transportation
S
Uniform &
Clothing
L
Upholstering
Services
S
Utility Locator Service
(Underground)
S
Valves
L
Vehicle - Cars, Trucks, Buses, Trailers/Motorcycles,
etc.
S
Vehicle (Automotive) Parts & Supplies (filters, oil, paint,
batteries)
S Pollution Liability
$1,000,000
Vendors- All other
Entertainment
S
Vendors- Amusement Park Ride
Equipment
H
Vendors- Food &
Drinks
S
Vendors-
Music
S
Video
Production
S
Wall and Ceiling Repair and
Replacement
S
Water and Sewer
Equipment
S
Water Purification/Softening
Services
S
Waterproofing Systems &
Repairs
S
Waterworks
Supplies
L
Weather and Waterproofing
S
Weed and Vegetation Control
H Pollution Liability
$2,000,000
Welding Services Volumes, Rebacking of Old Volumes,
etc.
S
Window and Door, Maintenance, Repair,
Install
S
Window Washing
Services
S
Wiring and Other Electrical
Services
S
Wood - Sale &
Removal
L
Zoning, Land Use
Studies
L Professional Liability
$1,000,000