Insurance and Indemnification Guidelines for State
of Arizona Contracts
Table of Contents
(Click link below to jump to Module – Use Ctrl/Home to Return)
Introduction ................................................................................................................................ 3
What is the Purpose of these Indemnification and Insurance Modules? .................................. 3
Transferring Risk through Contracts ....................................................................................... 3
Guide to Automobile Liability Exemption (Commuting) ............................................................ 4
Statewide Contracts ................................................................................................................ 4
Contact State Risk .................................................................................................................. 4
Professional Service Contracts .................................................................................................. 5
1. Standard Professional Service Contracts ........................................................................ 5
2. Standard Professional Service Contracts ($50,000 or under) .........................................10
3. Professional Service Contracts - Working With Children and/or Vulnerable Adults .........15
4. Professional Service Contracts - Working With Children and/or Vulnerable Adults (Under
$50,000) ................................................................................................................................20
Service Contracts (Other Than Professional Services) ..............................................................25
5. Standard Service Contracts Using Contractor Vehicles ..................................................25
6. Standard Service Contracts Using Contractor Vehicles ($50,000 or under) ....................30
7. Contractor Vehicles Limited to Commute ........................................................................35
8. Contractor Vehicles Limited to Commute ($50,000 or under) .........................................39
9. Service Contracts At a State Owned or Leased Airport ..................................................43
10. Janitorial / Building Maintenance / Caretaker Services ...................................................48
11. Janitorial / Building Maintenance / Caretaker Services ($50,000 or under) .....................53
12. Security Services Contracts - With Use of an Armored Car for Transport of Monies .......58
Updated: May 8, 2018 Page 2 of 183
13. Security Services Contracts - Without Use of an Armored Car .......................................64
14. Service Contracts - Handling Money ..............................................................................69
15. Service Contracts - Handling Money ($50,000 or under) ................................................74
16. Purchase and Installation of Equipment..........................................................................79
17. Purchase and Installation of Equipment ($50,000 or under) ...........................................84
18. Elevator Maintenance Contracts .....................................................................................89
19. Vehicle Transport / Storage / Repair ...............................................................................93
20. Special Events ................................................................................................................98
21. Commercial Lease / Rental Contracts .......................................................................... 104
22. Commercial Lease / Rental Agreements / With Pollution Requirement ......................... 110
23. Commodity Purchase Contracts ................................................................................... 116
24. Commodity Purchase Contracts ($50,000 or under) ..................................................... 121
Environmental Services and Consulting .................................................................................. 126
25. Remediation and Abatement Services .......................................................................... 127
26. Disposal / Recycling / Storage Facilities ....................................................................... 135
27. Environmental Consulting And Testing Services .......................................................... 141
28. Master Environmental Services .................................................................................... 146
29. Hazardous Material Hauling ......................................................................................... 152
Information Technology Contracts ........................................................................................... 158
30. Technology Errors & Omissions (Tech E&O) Insurance ............................................... 158
31. Media Liability Insurance .............................................................................................. 164
32. Network Security (Cyber) and Privacy Liability Insurance ............................................. 169
Other Contract Types .............................................................................................................. 175
33. Grants .......................................................................................................................... 175
34. Intern Work Service ...................................................................................................... 176
35. Intergovernmental Agreements (IGA) ........................................................................... 177
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Updated: May 8, 2018 Page 3 of 183
Introduction
What is the Purpose of these Indemnification and Insurance Modules?
The modules have been developed by the State of Arizona, Department of Administration, Risk
Management Division (State Risk) to assist State of Arizona staff in incorporating the State’s
insurance and indemnification requirements into written agreements (contracts), e.g. invitation for
bids (IFBs), leases, and requests for proposals (RFPs). Our goal is to provide easy-to-use
guidelines that can be cut and pasted into a contract document.
An Indemnification Clause is required in all State contracts so that the responsibility for claims
that may arise out of the course and scope of the contract shall be transferred to the Contractor.
The insurance requirements ensure that the Contractor has the financial resources to pay claims.
Transferring Risk through Contracts
The State of Arizona transfers the risk of accidental loss through contracts. This transfer of risk is
achieved by requiring the other party to the State of Arizona contract, e.g. the "contractor,”
"vendor,” “permittee,” or "lessee," to protect themselves and the State of Arizona and its
departments, agencies, boards, commissions, universities, officers, officials, agents, and
employees against claims or judgments arising from their products, services, operations, activities
or use of facilities. The best way to ensure that the transfer actually takes place, i.e. loss will be
paid by someone other than State Risk, is to require an Indemnification Clause and insurance.
Bid specifications, contracts, and permit requirements should contain a clear description of the
required insurance. In addition, they should contain a hold harmless and indemnification clause
that works in conjunction with the insurance requirements. Such a hold harmless and
indemnification clause is an agreement by which one contracting party assumes the liability of
another and agrees to defend them in the event of a claim. It is the legal provision that transfers
risk, while insurance provides the financial guarantee.
Insurance policies that financially support the hold harmless and indemnification clause may not
automatically become effective upon execution of the contract. Coverage may apply only when
the Contractor's insurance company issues the required insurance policies or endorses existing
policies to match the insurance requirements of the contract.
As proof of coverage, most insurance agents and brokers will provide a document called a
certificate of insurance. While a certificate is evidence that the Contractor has an insurance policy,
it does not guarantee that the required insurance provisions are in place. Even with this
shortcoming, the certificate of insurance, if completed correctly, is the only practical means of
confirming that coverage exists. In some situations, it may be necessary to obtain and review the
actual policy and specific endorsements.
The modules provide guidance on how to establish appropriate indemnification and insurance
requirements to meet the scope of work in your contract.
Disclaimer: Please note these insurance modules are not intended to be used with Construction Contracts.
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Updated: May 8, 2018 Page 4 of 183
Guide to Automobile Liability Exemption (Commuting)
Some contracts will not require the contractors to use their automobile at all. Others may require
vehicle use within a limited scope, i.e. a commute. “Commute” means a trip between the
Contractor’s home or principal place of business and one State agency location or destination. In
these cases, where all contractors under an agreement travel only within a “commute,” or do not
drive at all, the procurement officer may decide to delete the Automobile Liability insurance
Requirements from the module they have chosen.
For example, Service Contracts, where the intended automobile use is limited to a commute, have
been formatted to this situation. Other modules may be re-formatted by the Procurement Officer
to implement this variable, provided the Contractor’s automobile use is limited, based on the
above criteria.
It is crucial that the Procurement Officer know the likelihood of such limited use before deciding
to eliminate the Automobile Liability requirement. It is equally important that the Procurement
Officer know the automobile use under the contract before contacting State Risk for advice
regarding the Automobile Liability requirement.
Statewide Contracts
Please be aware that the indemnity and insurance provisions may apply to certain cooperative
parties when a statewide contract is used. State Risk recommends that the Contract Administrator
identify those cooperative parties in a section of the contract and state clearly, by reference to the
indemnity and insurance provisions, the applicability of such provisions to those parties.
Contact State Risk
The modules do not address all possible insurance questions that can arise, but are intended to
address the most common situations. If there are any questions about the information contained
in this guidance document, or need assistance in determining the appropriate insurance and/or
indemnification language, please contact State Risk:
Arizona Department of Administration - Risk Management Division
100 North 15th Avenue, Suite 301, Phoenix, AZ 85007
Phone: (602) 542-2180
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Professional Service Contracts
Updated: May 8, 2018 Page 5 of 183
Professional Service Contracts
1. Standard Professional Service Contracts
Professional Liability insurance is issued for a “professional” and covers the rendering of,
or failure to render, services of a professional nature. Professional Liability insurance is
usually written on a claims-made basis. Therefore, the Contractor needs to maintain
coverage during the contract period and for a specified period (typically two years) after
the project has been completed.
The types of losses that can occur as a result of professional rendering services are often
excluded under general liability insurance policies. Therefore, these losses need to be
covered through a separate professional liability insurance policy.
Professional liability insurance is needed when one of the following applies:
• If the professional is licensed, registered, or certified and expected to follow the
us
ual and customary standards of their profession. Professions in this category
include, but are not limited to, accountants, attorneys, engineers/architects,
construction management, technical consultant, surveyor (AF), and appraisers.
• If the information provided by the professional is to be used by the State of Arizona
in a decision-making process that may have an impact to life, health, safety, and/or
a significant financial impact to the State, its agencies, and the public.
If you have questions regarding the applicability of Professional Liability insurance, please
contact your assigned State Risk Insurance Analyst.
1.1 Indemnification Clause
To the fullest extent permitted by law, Contractor shall defend, indemnify, and hold
harmless the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees (hereinafter
referred to as “Indemnitee”) from and against any and all claims, actions, liabilities,
damages, losses, or expenses (including court costs, attorneys’ fees, and costs of
claim processing, investigation and litigation) (hereinafter referred to as “Claims”)
for bodily injury or personal injury (including death), or loss or damage to tangible
or intangible property caused, or alleged to be caused, in whole or in part, by the
negligent or willful acts or omissions of Contractor or any of its owners, officers,
directors, agents, employees or subcontractors. This indemnity includes any claim
or amount arising out of, or recovered under, the Workers’ Compensation Law or
arising out of the failure of such Contractor to conform to any federal, state, or local
law, statute, ordinance, rule, regulation, or court decree. It is the specific intention
of the parties that the Indemnitee shall, in all instances, except for Claims arising
solely from the negligent or willful acts or omissions of the Indemnitee, be
indemnified by Contractor from and against any and all claims. It is agreed that
Contractor will be responsible for primary loss investigation, defense, and
judgment costs where this indemnification is applicable. In consideration of the
award of this contract, the Contractor agrees to waive all rights of subrogation
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Professional Service Contracts
Updated: May 8, 2018 Page 6 of 183
against the State of Arizona, its officers, officials, agents, and employees for losses
arising from the work performed by the Contractor for the State of Arizona.
This indemnity shall not apply if the contractor or sub-contractor(s) is/are an
agency, board, commission or university of the State of Arizona.
1.2 Insurance Requirements
1.2.1 Contractor and subcontractors shall procure and maintain, until all of their
obligations have been discharged, including any warranty periods under
this Contract, insurance against claims for injury to persons or damage to
property arising from, or in connection with, the performance of the work
hereunder by the Contractor, its agents, representatives, employees or
subcontractors.
1.2.2 The Insurance Requirements herein are minimum requirements for this
Contract and in no way limit the indemnity covenants contained in this
Contract. The State of Arizona in no way warrants that the minimum limits
contained herein are sufficient to protect the Contractor from liabilities that
arise out of the performance of the work under this Contract by the
Contractor, its agents, representatives, employees or subcontractors, and
the Contractor is free to purchase additional insurance.
1.3 Minimum Scope and Limits of Insurance
Contractor shall provide coverage with limits of liability not less than those stated
below.
1.3.1 Commercial General Liability (CGL) – Occurrence Form
Policy shall include bodily injury, property damage, and broad form
contractual liability coverage.
• General Aggregate $2,000,000
• Products – Completed Operations Aggregate $1,000,000
• Personal and Advertising Injury $1,000,000
• Damage to Rented Premises $50,000
• Each Occurrence $1,000,000
a. The policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees as
additional insureds with respect to liability arising out of the activities
performed by or on behalf of the Contractor.
b. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work performed
by or on behalf of the Contractor.
1.3.2 Business Automobile Liability
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Professional Service Contracts
Updated: May 8, 2018 Page 7 of 183
Bodily Injury and Property Damage for any owned, hired, and/or non-
owned automobiles used in the performance of this Contract.
• Combined Single Limit (CSL) $1,000,000
a. Policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees
as additional insureds with respect to liability arising out of the
activities performed by, or on behalf of, the Contractor involving
automobiles owned, hired and/or non-owned by the Contractor.
b. Policy shall contain a waiver of subrogation endorsement as required
by this written agreement in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
1.3.3 Workers’ Compensation and Employers' Liability
• Workers' Compensation Statutory
• Employers' Liability
o Each Accident $1,000,000
o Disease – Each Employee $1,000,000
o Disease – Policy Limit $1,000,000
a. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
b. This requirement shall not apply to each Contractor or subcontractor
that is exempt under A.R.S. § 23-901, and when such Contractor or
subcontractor executes the appropriate waiver form (Sole Proprietor
or Independent Contractor).
1.3.4 Professional Liability (Errors and Omissions Liability)
• Each Claim $2,000,000
• Annual Aggregate $2,000,000
a. In the event that the Professional Liability insurance required by this
Contract is written on a claims-made basis, Contractor warrants that
any retroactive date under the policy shall precede the effective date
of this Contract and, either continuous coverage will be maintained, or
an extended discovery period will be exercised, for a period of two (2)
years beginning at the time work under this Contract is completed.
b. The policy shall cover professional misconduct or negligent acts for
those positions defined in the Scope of Work of this contract.
1.4 Additional Insurance Requirements
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Professional Service Contracts
Updated: May 8, 2018 Page 8 of 183
The policies shall include, or be endorsed to include, as required by this written
agreement, the following provisions:
1.4.1 The Contractor's policies, as applicable, shall stipulate that the insurance
afforded the Contractor shall be primary and that any insurance carried by
the Department, its agents, officials, employees or the State of Arizona
shall be excess and not contributory insurance, as provided by A.R.S. §
41-621 (E).
1.4.2 Insurance provided by the Contractor shall not limit the Contractor’s liability
assumed under the indemnification provisions of this Contract.
1.5 Notice of Cancellation
Applicable to all insurance policies required within the Insurance Requirements of
this Contract, Contractor’s insurance shall not be permitted to expire, be
suspended, be canceled, or be materially changed for any reason without thirty
(30) days prior written notice to the State of Arizona. Within two (2) business days
of receipt, Contractor must provide notice to the State of Arizona if they receive
notice of a policy that has been or will be suspended, canceled, materially changed
for any reason, has expired, or will be expiring. Such notice shall be sent directly
to the Department and shall be mailed, emailed, hand delivered or sent by
facsimile transmission to (State Representative’s Name, Address & Fax Number).
1.6 Acceptability of Insurers
Contractor’s insurance shall be placed with companies licensed in the State of
Arizona or hold approved non-admitted status on the Arizona Department of
Insurance List of Qualified Unauthorized Insurers. Insurers shall have an “A.M.
Best” rating of not less than A- VII. The State of Arizona in no way warrants that
the above-required minimum insurer rating is sufficient to protect the Contractor
from potential insurer insolvency.
1.7 Verification of Coverage
Contractor shall furnish the State of Arizona with certificates of insurance (valid
ACORD form or equivalent approved by the State of Arizona) evidencing that
Contractor has the insurance as required by this Contract. An authorized
representative of the insurer shall sign the certificates.
1.7.1 All such certificates of insurance and policy endorsements must be
received by the State before work commences. The State’s receipt of any
certificates of insurance or policy endorsements that do not comply with
this written agreement shall not waive or otherwise affect the requirements
of this agreement.
1.7.2 Each insurance policy required by this Contract must be in effect at, or prior
to, commencement of work under this Contract. Failure to maintain the
insurance policies as required by this Contract, or to provide evidence of
renewal, is a material breach of contract.
1.7.3 All certificates required by this Contract shall be sent directly to the
Department. The State of Arizona project/contract number and project
description shall be noted on the certificate of insurance. The State of
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Professional Service Contracts
Updated: May 8, 2018 Page 9 of 183
Arizona reserves the right to require complete copies of all insurance
policies required by this Contract at any time.
1.8 Subcontractors
Contractor’s certificate(s) shall include all subcontractors as insureds under its
policies or Contractor shall be responsible for ensuring and/or verifying that all
subcontractors have valid and collectable insurance as evidenced by the
certificates of insurance and endorsements for each subcontractor. All coverages
for subcontractors shall be subject to the minimum Insurance Requirements
identified above. The Department reserves the right to require, at any time
throughout the life of this contract, proof from the Contractor that its subcontractors
have the required coverage.
1.9 Approval and Modifications
The Contracting Agency, in consultation with State Risk, reserves the right to
review or make modifications to the insurance limits, required coverages, or
endorsements throughout the life of this contract, as deemed necessary. Such
action will not require a formal Contract amendment but may be made by
administrative action.
1.10 Exceptions
In the event the Contractor or subcontractor(s) is/are a public entity, then the
Insurance Requirements shall not apply. Such public entity shall provide a
certificate of self-insurance. If the Contractor or subcontractor(s) is/are a State of
Arizona agency, board, commission, or university, none of the above shall apply.
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Professional Service Contracts
Updated: May 8, 2018 Page 10 of 183
2. Standard Professional Service Contracts ($50,000 or under)
Professional Liability insurance is issued for a “professional” and covers the rendering of,
or failure to render, services of a professional nature. Professional Liability insurance is
usually written on a claims-made basis. Therefore, the Contractor needs to maintain
coverage during the contract period and for a specified period (typically two years) after
the project has been completed.
The types of losses that can occur as a result of professional rendering services are often
excluded under general liability insurance policies. Therefore, these losses need to be
covered through a separate professional liability insurance policy.
Professional liability insurance is needed when one of the following applies:
• If the professional is licensed, registered, or certified and expected to follow the
usual and customary standards of their profession. Professions in this category
include, but are not limited to, accountants, attorneys, engineers/architects,
construction management, technical consultant, surveyor (AF), and appraisers.
• If the information provided by the professional is to be used by the State of Arizona
in a decision-making process that may have an impact to life, health, safety, and/or
a significant financial impact to the State, its agencies, and the public.
If you have questions regarding the applicability of Professional Liability insurance, please
contact your assigned State Risk Insurance Analyst.
2.1 Indemnification Clause
To the fullest extent permitted by law, Contractor shall defend, indemnify, and hold
harmless the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees (hereinafter
referred to as “Indemnitee”) from and against any and all claims, actions, liabilities,
damages, losses, or expenses (including court costs, attorneys’ fees, and costs of
claim processing, investigation and litigation) (hereinafter referred to as “Claims”)
for bodily injury or personal injury (including death), or loss or damage to tangible
or intangible property caused, or alleged to be caused, in whole or in part, by the
negligent or willful acts or omissions of Contractor or any of its owners, officers,
directors, agents, employees or subcontractors. This indemnity includes any claim
or amount arising out of, or recovered under, the Workers’ Compensation Law or
arising out of the failure of such Contractor to conform to any federal, state, or local
law, statute, ordinance, rule, regulation, or court decree. It is the specific intention
of the parties that the Indemnitee shall, in all instances, except for Claims arising
solely from the negligent or willful acts or omissions of the Indemnitee, be
indemnified by Contractor from and against any and all claims. It is agreed that
Contractor will be responsible for primary loss investigation, defense, and
judgment costs where this indemnification is applicable. In consideration of the
award of this contract, the Contractor agrees to waive all rights of subrogation
against the State of Arizona, its officers, officials, agents, and employees for losses
arising from the work performed by the Contractor for the State of Arizona.
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Professional Service Contracts
Updated: May 8, 2018 Page 11 of 183
This indemnity shall not apply if the contractor or sub-contractor(s) is/are an
agency, board, commission or university of the State of Arizona.
2.2 Insurance Requirements
2.2.1 Contractor and subcontractors shall procure and maintain, until all of their
obligations have been discharged, including any warranty periods under
this Contract, insurance against claims for injury to persons or damage to
property arising from, or in connection with, the performance of the work
hereunder by the Contractor, its agents, representatives, employees or
subcontractors.
2.2.2 The Insurance Requirements herein are minimum requirements for this
Contract and in no way limit the indemnity covenants contained in this
Contract. The State of Arizona in no way warrants that the minimum limits
contained herein are sufficient to protect the Contractor from liabilities that
arise out of the performance of the work under this Contract by the
Contractor, its agents, representatives, employees or subcontractors, and
the Contractor is free to purchase additional insurance.
2.3 Minimum Scope and Limits of Insurance
Contractor shall provide coverage with limits of liability not less than those stated
below.
2.3.1 Commercial General Liability (CGL) – Occurrence Form
Policy shall include bodily injury, property damage, and broad form
contractual liability coverage.
• General Aggregate $1,000,000
• Products – Completed Operations Aggregate $500,000
• Personal and Advertising Injury $500,000
• Damage to Rented Premises $25,000
• Each Occurrence $500,000
The policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees as
additional insureds with respect to liability arising out of the activities
performed by or on behalf of the Contractor.
Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work performed
by or on behalf of the Contractor.
2.3.2 Business Automobile Liability
Bodily Injury and Property Damage for any owned, hired, and/or non-
owned automobiles used in the performance of this Contract.
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Professional Service Contracts
Updated: May 8, 2018 Page 12 of 183
• Combined Single Limit (CSL) $500,000
a. Policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees
as additional insureds with respect to liability arising out of the
activities performed by, or on behalf of, the Contractor involving
automobiles owned, hired and/or non-owned by the Contractor.
b. Policy shall contain a waiver of subrogation endorsement as required
by this written agreement in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
2.3.3 Workers’ Compensation and Employers' Liability
• Workers' Compensation Statutory
• Employers' Liability
o Each Accident $500,000
o Disease – Each Employee $500,000
o Disease – Policy Limit $500,000
a. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
b. This requirement shall not apply to each Contractor or subcontractor
that is exempt under A.R.S. § 23-901, and when such Contractor or
subcontractor executes the appropriate waiver form (Sole Proprietor
or Independent Contractor).
2.3.4 Professional Liability (Errors and Omissions Liability)
• Each Claim $1,000,000
• Annual Aggregate $1,000,000
a. In the event that the Professional Liability insurance required by this
Contract is written on a claims-made basis, Contractor warrants that
any retroactive date under the policy shall precede the effective date
of this Contract and, either continuous coverage will be maintained, or
an extended discovery period will be exercised, for a period of two (2)
years beginning at the time work under this Contract is completed.
b. The policy shall cover professional misconduct or negligent acts for
those positions defined in the Scope of Work of this contract.
2.4 Additional Insurance Requirements
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Professional Service Contracts
Updated: May 8, 2018 Page 13 of 183
The policies shall include, or be endorsed to include, as required by this written
agreement, the following provisions:
2.4.1 The Contractor's policies, as applicable, shall stipulate that the insurance
afforded the Contractor shall be primary and that any insurance carried by
the Department, its agents, officials, employees or the State of Arizona
shall be excess and not contributory insurance, as provided by A.R.S. §
41-621 (E).
2.4.2 Insurance provided by the Contractor shall not limit the Contractor’s liability
assumed under the indemnification provisions of this Contract.
2.5 Notice of Cancellation
Applicable to all insurance policies required within the Insurance Requirements of
this Contract, Contractor’s insurance shall not be permitted to expire, be
suspended, be canceled, or be materially changed for any reason without thirty
(30) days prior written notice to the State of Arizona. Within two (2) business days
of receipt, Contractor must provide notice to the State of Arizona if they receive
notice of a policy that has been or will be suspended, canceled, materially changed
for any reason, has expired, or will be expiring. Such notice shall be sent directly
to the Department and shall be mailed, emailed, hand delivered or sent by
facsimile transmission to (State Representative’s Name, Address & Fax Number).
2.6 Acceptability of Insurers
Contractor’s insurance shall be placed with companies licensed in the State of
Arizona or hold approved non-admitted status on the Arizona Department of
Insurance List of Qualified Unauthorized Insurers. Insurers shall have an “A.M.
Best” rating of not less than A- VII. The State of Arizona in no way warrants that
the above-required minimum insurer rating is sufficient to protect the Contractor
from potential insurer insolvency.
2.7 Verification of Coverage
Contractor shall furnish the State of Arizona with certificates of insurance (valid
ACORD form or equivalent approved by the State of Arizona) evidencing that
Contractor has the insurance as required by this Contract. An authorized
representative of the insurer shall sign the certificates.
2.7.1 All such certificates of insurance and policy endorsements must be
received by the State before work commences. The State’s receipt of any
certificates of insurance or policy endorsements that do not comply with
this written agreement shall not waive or otherwise affect the requirements
of this agreement.
2.7.2 Each insurance policy required by this Contract must be in effect at, or prior
to, commencement of work under this Contract. Failure to maintain the
insurance policies as required by this Contract, or to provide evidence of
renewal, is a material breach of contract.
2.7.3 All certificates required by this Contract shall be sent directly to the
Department. The State of Arizona project/contract number and project
description shall be noted on the certificate of insurance. The State of
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Professional Service Contracts
Updated: May 8, 2018 Page 14 of 183
Arizona reserves the right to require complete copies of all insurance
policies required by this Contract at any time.
2.8 Subcontractors
Contractor’s certificate(s) shall include all subcontractors as insureds under its
policies or Contractor shall be responsible for ensuring and/or verifying that all
subcontractors have valid and collectable insurance as evidenced by the
certificates of insurance and endorsements for each subcontractor. All coverages
for subcontractors shall be subject to the minimum Insurance Requirements
identified above. The Department reserves the right to require, at any time
throughout the life of this contract, proof from the Contractor that its subcontractors
have the required coverage.
2.9 Approval and Modifications
The Contracting Agency, in consultation with State Risk, reserves the right to
review or make modifications to the insurance limits, required coverages, or
endorsements throughout the life of this contract, as deemed necessary. Such
action will not require a formal Contract amendment but may be made by
administrative action.
2.10 Exceptions
In the event the Contractor or subcontractor(s) is/are a public entity, then the
Insurance Requirements shall not apply. Such public entity shall provide a
certificate of self-insurance. If the Contractor or subcontractor(s) is/are a State of
Arizona agency, board, commission, or university, none of the above shall apply.
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Professional Service Contracts
Updated: May 8, 2018 Page 15 of 183
3. Professional Service Contracts - Working With Children and/or Vulnerable Adults
Many professional services involve working with, or caring for, children and/or vulnerable
adults (physically and developmentally disabled adults or inmates that are in the care,
custody, and control of the State of Arizona). This activity creates an additional risk of
liability to the State of Arizona because of the severe and sensitive nature of the possible
allegations of wrongdoing.
When services involve working with these groups of individuals, the insurance
requirements in the contract need to be revised to include coverage for "Sexual Abuse
and Molestation (SAM)”. Coverage for this type of claim, or allegation, is typically excluded
from general liability policies, but some insurers offer a niche product with SAM coverage
in their liability policy for classes of business with this exposure, i.e. church organizations,
nonprofits, hospitals, children’s sports clubs, etc. Therefore, contractors whose services
include working with, and/or caring for children or vulnerable adults, should have their
policies specifically endorsed to include this coverage. Due to the often complex and
lengthy investigation and defense associated with the claims of abuse, defense cost
should not erode the policy limits. This is also known as “defense outside the limits”.
3.1 Indemnification Clause
To the fullest extent permitted by law, Contractor shall defend, indemnify, and hold
harmless the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees (hereinafter
referred to as “Indemnitee”) from and against any and all claims, actions, liabilities,
damages, losses, or expenses (including court costs, attorneys’ fees, and costs of
claim processing, investigation and litigation) (hereinafter referred to as “Claims”)
for bodily injury or personal injury (including death), or loss or damage to tangible
or intangible property caused, or alleged to be caused, in whole or in part, by the
negligent or willful acts or omissions of Contractor or any of its owners, officers,
directors, agents, employees or subcontractors. This indemnity includes any claim
or amount arising out of, or recovered under, the Workers’ Compensation Law or
arising out of the failure of such Contractor to conform to any federal, state, or local
law, statute, ordinance, rule, regulation, or court decree. It is the specific intention
of the parties that the Indemnitee shall, in all instances, except for Claims arising
solely from the negligent or willful acts or omissions of the Indemnitee, be
indemnified by Contractor from and against any and all claims. It is agreed that
Contractor will be responsible for primary loss investigation, defense, and
judgment costs where this indemnification is applicable. In consideration of the
award of this contract, the Contractor agrees to waive all rights of subrogation
against the State of Arizona, its officers, officials, agents, and employees for losses
arising from the work performed by the Contractor for the State of Arizona.
This indemnity shall not apply if the contractor or sub-contractor(s) is/are an
agency, board, commission or university of the State of Arizona.
3.2 Insurance Requirements
3.2.1 Contractor and subcontractors shall procure and maintain, until all of their
obligations have been discharged, including any warranty periods under
this Contract, insurance against claims for injury to persons or damage to
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Professional Service Contracts
Updated: May 8, 2018 Page 16 of 183
property arising from, or in connection with, the performance of the work
hereunder by the Contractor, its agents, representatives, employees or
subcontractors.
3.2.2 The Insurance Requirements herein are minimum requirements for this
Contract and in no way limit the indemnity covenants contained in this
Contract. The State of Arizona in no way warrants that the minimum limits
contained herein are sufficient to protect the Contractor from liabilities that
arise out of the performance of the work under this Contract by the
Contractor, its agents, representatives, employees or subcontractors, and
the Contractor is free to purchase additional insurance.
3.3 Minimum Scope and Limits of Insurance
Contractor shall provide coverage with limits of liability not less than those stated
below.
3.3.1 Commercial General Liability (CGL) – Occurrence Form
Policy shall include bodily injury, property damage, and broad form
contractual liability coverage.
• General Aggregate $2,000,000
• Products – Completed Operations Aggregate $1,000,000
• Personal and Advertising Injury $1,000,000
• Damage to Rented Premises $50,000
• Each Occurrence $1,000,000
a. The policy shall include coverage for Sexual Abuse and Molestation
(SAM). This coverage may be sub-limited to no less than $500,000.
The limits may be included within the General Liability limit or provided
by separate endorsement with its own limits. If you are unable to obtain
SAM coverage under your General Liability because the insurance
market will not support it, it should it be included with the Professional
Liability.
b. Contractor must provide the following statement on their Certificate(s)
of Insurance: “Sexual Abuse and Molestation coverage is included” or
“Sexual Abuse and Molestation coverage is not excluded.”
c. The policy shall be endorsed, as required by this written agreement,
to include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees
as additional insureds with respect to liability arising out of the
activities performed by or on behalf of the Contractor.
d. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
3.3.2 Business Automobile Liability
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Arizona Contracts
Professional Service Contracts
Updated: May 8, 2018 Page 17 of 183
Bodily Injury and Property Damage for any owned, hired, and/or non-
owned automobiles used in the performance of this Contract.
• Combined Single Limit (CSL) $1,000,000
a. Policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees
as additional insureds with respect to liability arising out of the
activities performed by, or on behalf of, the Contractor involving
automobiles owned, hired and/or non-owned by the Contractor.
b. Policy shall contain a waiver of subrogation endorsement as required
by this written agreement in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
3.3.3 Workers’ Compensation and Employers' Liability
• Workers' Compensation Statutory
• Employers' Liability
o Each Accident $1,000,000
o Disease – Each Employee $1,000,000
o Disease – Policy Limit $1,000,000
a. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
b. This requirement shall not apply to each Contractor or subcontractor
that is exempt under A.R.S. § 23-901, and when such Contractor or
subcontractor executes the appropriate waiver form (Sole Proprietor
or Independent Contractor).
3.3.4 Professional Liability (Errors and Omissions Liability)
• Each Claim $ 2,000,000
• Annual Aggregate $ 2,000,000
a. If SAM coverage is being provided under this policy then Contractor
must provide the following statement on their Certificate(s) of
Insurance: “Sexual Abuse and Molestation coverage is included” or
“Sexual Abuse and Molestation coverage is not excluded.” This
coverage may be sub-limited to no less than $500,000.
b. In the event that the professional liability insurance required by this
Contract is written on a claims-made basis, Contractor warrants that
any retroactive date under the policy shall precede the effective date
of this Contract; and that either continuous coverage will be
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Arizona Contracts
Professional Service Contracts
Updated: May 8, 2018 Page 18 of 183
maintained or an extended discovery period will be exercised for a
period of two (2) years beginning at the time work under this Contract
is completed.
c. Policy shall cover professional misconduct or wrongful acts for those
positions defined in the Scope of Work of this contract.
3.4 Additional Insurance Requirements
The policies shall include, or be endorsed to include, as required by this written
agreement, the following provisions:
3.4.1 The Contractor's policies, as applicable, shall stipulate that the insurance
afforded the Contractor shall be primary and that any insurance carried by
the Department, its agents, officials, employees or the State of Arizona
shall be excess and not contributory insurance, as provided by A.R.S. §
41-621 (E).
3.4.2 Insurance provided by the Contractor shall not limit the Contractor’s liability
assumed under the indemnification provisions of this Contract.
3.5 Notice of Cancellation
Applicable to all insurance policies required within the Insurance Requirements of
this Contract, Contractor’s insurance shall not be permitted to expire, be
suspended, be canceled, or be materially changed for any reason without thirty
(30) days prior written notice to the State of Arizona. Within two (2) business days
of receipt, Contractor must provide notice to the State of Arizona if they receive
notice of a policy that has been or will be suspended, canceled, materially changed
for any reason, has expired, or will be expiring. Such notice shall be sent directly
to the Department and shall be mailed, emailed, hand delivered or sent by
facsimile transmission to (State Representative’s Name, Address & Fax Number).
3.6 Acceptability of Insurers
Contractor’s insurance shall be placed with companies licensed in the State of
Arizona or hold approved non-admitted status on the Arizona Department of
Insurance List of Qualified Unauthorized Insurers. Insurers shall have an “A.M.
Best” rating of not less than A- VII. The State of Arizona in no way warrants that
the above-required minimum insurer rating is sufficient to protect the Contractor
from potential insurer insolvency.
3.7 Verification of Coverage
Contractor shall furnish the State of Arizona with certificates of insurance (valid
ACORD form or equivalent approved by the State of Arizona) evidencing that
Contractor has the insurance as required by this Contract. An authorized
representative of the insurer shall sign the certificates.
3.7.1 All such certificates of insurance and policy endorsements must be
received by the State before work commences. The State’s receipt of any
certificates of insurance or policy endorsements that do not comply with
this written agreement shall not waive or otherwise affect the requirements
of this agreement.
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Professional Service Contracts
Updated: May 8, 2018 Page 19 of 183
3.7.2 Each insurance policy required by this Contract must be in effect at, or prior
to, commencement of work under this Contract. Failure to maintain the
insurance policies as required by this Contract, or to provide evidence of
renewal, is a material breach of contract.
3.7.3 All certificates required by this Contract shall be sent directly to the
Department. The State of Arizona project/contract number and project
description shall be noted on the certificate of insurance. The State of
Arizona reserves the right to require complete copies of all insurance
policies required by this Contract at any time.
3.8 Subcontractors
Contractor’s certificate(s) shall include all subcontractors as insureds under its
policies or Contractor shall be responsible for ensuring and/or verifying that all
subcontractors have valid and collectable insurance as evidenced by the
certificates of insurance and endorsements for each subcontractor. All coverages
for subcontractors shall be subject to the minimum Insurance Requirements
identified above. The Department reserves the right to require, at any time
throughout the life of the Contract, proof from the Contractor that its subcontractors
have the required coverage.
3.9 Approval and Modifications
The Contracting Agency, in consultation with State Risk, reserves the right to
review or make modifications to the insurance limits, required coverages, or
endorsements throughout the life of this contract, as deemed necessary. Such
action will not require a formal Contract amendment but may be made by
administrative action.
3.10 Exceptions
In the event the Contractor or subcontractor(s) is/are a public entity, then the
Insurance Requirements shall not apply. Such public entity shall provide a
certificate of self-insurance. If the Contractor or subcontractor(s) is/are a State of
Arizona agency, board, commission, or university, none of the above shall apply.
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Professional Service Contracts
Updated: May 8, 2018 Page 20 of 183
4. Professional Service Contracts - Working With Children and/or Vulnerable Adults
(Under $50,000)
Many professional services involve working with, or caring for, children and/or vulnerable
adults (physically and developmentally disabled adults or inmates that are in the care,
custody, and control of the State of Arizona). This activity creates an additional risk of
liability to the State of Arizona because of the severe and sensitive nature of the possible
allegations of wrongdoing.
When services involve working with these groups of individuals, the insurance
requirements in the contract need to be revised to include coverage for "Sexual Abuse
and Molestation (SAM)”. Coverage for this type of claim, or allegation, is typically excluded
from general liability policies, but some insurers offer a niche product with SAM coverage
in their liability policy for classes of business with this exposure, i.e. church organizations,
nonprofits, hospitals, children’s sports clubs, etc. Therefore, contractors whose services
include working with, and/or caring for children or vulnerable adults, should have their
policies specifically endorsed to include this coverage. Due to the often complex and
lengthy investigation and defense associated with the claims of abuse, defense cost
should not erode the policy limits. This is also known as “defense outside the limits.”
4.1 Indemnification Clause
To the fullest extent permitted by law, Contractor shall defend, indemnify, and hold
harmless the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees (hereinafter
referred to as “Indemnitee”) from and against any and all claims, actions, liabilities,
damages, losses, or expenses (including court costs, attorneys’ fees, and costs of
claim processing, investigation and litigation) (hereinafter referred to as “Claims”)
for bodily injury or personal injury (including death), or loss or damage to tangible
or intangible property caused, or alleged to be caused, in whole or in part, by the
negligent or willful acts or omissions of Contractor or any of its owners, officers,
directors, agents, employees or subcontractors. This indemnity includes any claim
or amount arising out of, or recovered under, the Workers’ Compensation Law or
arising out of the failure of such Contractor to conform to any federal, state, or local
law, statute, ordinance, rule, regulation, or court decree. It is the specific intention
of the parties that the Indemnitee shall, in all instances, except for Claims arising
solely from the negligent or willful acts or omissions of the Indemnitee, be
indemnified by Contractor from and against any and all claims. It is agreed that
Contractor will be responsible for primary loss investigation, defense, and
judgment costs where this indemnification is applicable. In consideration of the
award of this contract, the Contractor agrees to waive all rights of subrogation
against the State of Arizona, its officers, officials, agents, and employees for losses
arising from the work performed by the Contractor for the State of Arizona.
This indemnity shall not apply if the contractor or sub-contractor(s) is/are an
agency, board, commission or university of the State of Arizona.
4.2 Insurance Requirements
4.2.1 Contractor and subcontractors shall procure and maintain, until all of their
obligations have been discharged, including any warranty periods under
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Professional Service Contracts
Updated: May 8, 2018 Page 21 of 183
this Contract, insurance against claims for injury to persons or damage to
property arising from, or in connection with, the performance of the work
hereunder by the Contractor, its agents, representatives, employees or
subcontractors.
4.2.2 The Insurance Requirements herein are minimum requirements for this
Contract and in no way limit the indemnity covenants contained in this
Contract. The State of Arizona in no way warrants that the minimum limits
contained herein are sufficient to protect the Contractor from liabilities that
arise out of the performance of the work under this Contract by the
Contractor, its agents, representatives, employees or subcontractors, and
the Contractor is free to purchase additional insurance.
4.3 Minimum Scope and Limits of Insurance
Contractor shall provide coverage with limits of liability not less than those stated
below.
4.3.1 Commercial General Liability (CGL) – Occurrence Form
Policy shall include bodily injury, property damage, and broad form
contractual liability coverage.
• General Aggregate $1,000,000
• Products – Completed Operations Aggregate $500,000
• Personal and Advertising Injury $500,000
• Damage to Rented Premises $25,000
• Each Occurrence $500,000
a. The policy shall include coverage for Sexual Abuse and Molestation
(SAM). This coverage may be sub-limited to no less than $250,000.
The limits may be included within the General Liability limit or provided
by separate endorsement with its own dedicated limits. If you are
unable to obtain SAM coverage under your General Liability because
the insurance market will not support it, it should it be included with the
Professional Liability.
b. Defense Costs should not erode the policy limits, also known as
“defense outside the limits.”
c. Contractor must provide the following statement on their Certificate(s)
of Insurance: “Sexual Abuse and Molestation coverage is included” or
“Sexual Abuse and Molestation coverage is not excluded.”
d. The policy shall be endorsed, as required by this written agreement,
to include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees
as additional insureds with respect to liability arising out of the
activities performed by or on behalf of the Contractor.
e. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Professional Service Contracts
Updated: May 8, 2018 Page 22 of 183
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
4.3.2 Business Automobile Liability
Bodily Injury and Property Damage for any owned, hired, and/or non-
owned automobiles used in the performance of this Contract.
• Combined Single Limit (CSL) $500,000
a. Policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees
as additional insureds with respect to liability arising out of the
activities performed by, or on behalf of, the Contractor involving
automobiles owned, hired and/or non-owned by the Contractor.
b. Policy shall contain a waiver of subrogation endorsement as required
by this written agreement in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
4.3.3 Workers’ Compensation and Employers' Liability
• Workers' Compensation Statutory
• Employers' Liability
o Each Accident $500,000
o Disease – Each Employee $500,000
o Disease – Policy Limit $500,000
a. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
b. This requirement shall not apply to each Contractor or subcontractor
that is exempt under A.R.S. § 23-901, and when such Contractor or
subcontractor executes the appropriate waiver form (Sole Proprietor
or Independent Contractor).
4.3.4 Professional Liability (Errors and Omissions Liability)
• Each Claim $ 1,000,000
• Annual Aggregate $ 1,000,000
a. If SAM coverage is being provided under this policy then Contractor
must provide the following statement on their Certificate(s) of
Insurance: “Sexual Abuse and Molestation coverage is included” or
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Professional Service Contracts
Updated: May 8, 2018 Page 23 of 183
“Sexual Abuse and Molestation coverage is not excluded.” This
coverage may be sub-limited to no less than $250,000.
b. In the event that the professional liability insurance required by this
Contract is written on a claims-made basis, Contractor warrants that
any retroactive date under the policy shall precede the effective date
of this Contract; and that either continuous coverage will be
maintained or an extended discovery period will be exercised for a
period of two (2) years beginning at the time work under this Contract
is completed.
c. Policy shall cover professional misconduct or wrongful acts for those
positions defined in the Scope of Work of this contract.
4.4 Additional Insurance Requirements
The policies shall include, or be endorsed to include, as required by this written
agreement, the following provisions:
4.4.1 The Contractor's policies, as applicable, shall stipulate that the insurance
afforded the Contractor shall be primary and that any insurance carried by
the Department, its agents, officials, employees or the State of Arizona
shall be excess and not contributory insurance, as provided by A.R.S. §
41-621 (E).
4.4.2 Insurance provided by the Contractor shall not limit the Contractor’s liability
assumed under the indemnification provisions of this Contract.
4.5 Notice of Cancellation
Applicable to all insurance policies required within the Insurance Requirements of
this Contract, Contractor’s insurance shall not be permitted to expire, be
suspended, be canceled, or be materially changed for any reason without thirty
(30) days prior written notice to the State of Arizona. Within two (2) business days
of receipt, Contractor must provide notice to the State of Arizona if they receive
notice of a policy that has been or will be suspended, canceled, materially changed
for any reason, has expired, or will be expiring. Such notice shall be sent directly
to the Department and shall be mailed, emailed, hand delivered or sent by
facsimile transmission to (State Representative’s Name, Address & Fax Number).
4.6 Acceptability of Insurers
Contractor’s insurance shall be placed with companies licensed in the State of
Arizona or hold approved non-admitted status on the Arizona Department of
Insurance List of Qualified Unauthorized Insurers. Insurers shall have an “A.M.
Best” rating of not less than A- VII. The State of Arizona in no way warrants that
the above-required minimum insurer rating is sufficient to protect the Contractor
from potential insurer insolvency.
4.7 Verification of Coverage
Contractor shall furnish the State of Arizona with certificates of insurance (valid
ACORD form or equivalent approved by the State of Arizona) evidencing that
Contractor has the insurance as required by this Contract. An authorized
representative of the insurer shall sign the certificates.
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Arizona Contracts
Professional Service Contracts
Updated: May 8, 2018 Page 24 of 183
4.7.1 All such certificates of insurance and policy endorsements must be
received by the State before work commences. The State’s receipt of any
certificates of insurance or policy endorsements that do not comply with
this written agreement shall not waive or otherwise affect the requirements
of this agreement.
4.7.2 Each insurance policy required by this Contract must be in effect at, or prior
to, commencement of work under this Contract. Failure to maintain the
insurance policies as required by this Contract, or to provide evidence of
renewal, is a material breach of contract.
4.7.3 All certificates required by this Contract shall be sent directly to the
Department. The State of Arizona project/contract number and project
description shall be noted on the certificate of insurance. The State of
Arizona reserves the right to require complete copies of all insurance
policies required by this Contract at any time.
4.8 Subcontractors
Contractor’s certificate(s) shall include all subcontractors as insureds under its
policies or Contractor shall be responsible for ensuring and/or verifying that all
subcontractors have valid and collectable insurance as evidenced by the
certificates of insurance and endorsements for each subcontractor. All coverages
for subcontractors shall be subject to the minimum Insurance Requirements
identified above. The Department reserves the right to require, at any time
throughout the life of the Contract, proof from the Contractor that its subcontractors
have the required coverage.
4.9 Approval and Modifications
The Contracting Agency, in consultation with State Risk, reserves the right to
review or make modifications to the insurance limits, required coverages, or
endorsements throughout the life of this contract, as deemed necessary. Such
action will not require a formal Contract amendment but may be made by
administrative action.
4.10 Exceptions
In the event the Contractor or subcontractor(s) is/are a public entity, then the
Insurance Requirements shall not apply. Such public entity shall provide a
certificate of self-insurance. If the Contractor or subcontractor(s) is/are a State of
Arizona agency, board, commission, or university, none of the above shall apply.
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Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 25 of 183
Service Contracts (Other Than Professional Services)
5. Standard Service Contracts Using Contractor Vehicles
"Standard Service" contracts do not present any unique exposures to the State of Arizona,
and are not considered "Professional Services" by insurance definitions. Therefore, the
State of Arizona's standard insurance requirements that follow would be appropriate for
use in most general service contracts. Depending on the nature of the services being
provided, it may be necessary to require certain supplemental insurance coverage in
addition to the State of Arizona's standard insurance requirements in order to address
specific risks. Some of the unique services that may require supplemental insurance
coverage have been addressed in this manual separately. Please refer to the Table of
Contents in this manual for a list of such specific service contracts that do require special
insurance language. This may include but not be limited to such activities as ticket
vendors, elevator maintenance services, equipment purchase and installation, vehicle
maintenance and repair, etc.
In addition, certain contracted services may or may not involve the use of contractor
vehicles in order to perform the scope of services. Automobile liability should be required
if the contract involves the contractor's use of a vehicle as part of the services being
provided. Such use means vehicle operation beyond a commute, i.e. a trip between the
contractor’s home or principal place of business and one State agency location. Examples
of such services include delivery services, transportation of persons or property, and
vehicles used to carry contractor equipment to State of Arizona departments, agencies,
boards, commissions, universities service site, etc. The insurance requirements in this
section assume the Contractor does use vehicle(s) in the delivery of services under
the contract and therefore includes the requirement for Automobile Liability
insurance.
If the contracted services do not present any unique risks and are not professional in
nature, use the following standard insurance requirements. If you are uncertain if a
contract presents unique exposures that may require additional insurance coverage,
contact State Risk for assistance in modifying the standard insurance requirements.
5.1 Indemnification:
To the fullest extent permitted by law, Contractor shall defend, indemnify, and hold
harmless the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees (hereinafter
referred to as “Indemnitee”) from and against any and all claims, actions, liabilities,
damages, losses, or expenses (including court costs, attorneys’ fees, and costs of
claim processing, investigation and litigation) (hereinafter referred to as “Claims”)
for bodily injury or personal injury (including death), or loss or damage to tangible
or intangible property caused, or alleged to be caused, in whole or in part, by the
negligent or willful acts or omissions of Contractor or any of its owners, officers,
directors, agents, employees or subcontractors. This indemnity includes any claim
or amount arising out of, or recovered under, the Workers’ Compensation Law or
arising out of the failure of such Contractor to conform to any federal, state, or local
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 26 of 183
law, statute, ordinance, rule, regulation, or court decree. It is the specific intention
of the parties that the Indemnitee shall, in all instances, except for Claims arising
solely from the negligent or willful acts or omissions of the Indemnitee, be
indemnified by Contractor from and against any and all claims. It is agreed that
Contractor will be responsible for primary loss investigation, defense, and
judgment costs where this indemnification is applicable. In consideration of the
award of this contract, the Contractor agrees to waive all rights of subrogation
against the State of Arizona, its officers, officials, agents, and employees for losses
arising from the work performed by the Contractor for the State of Arizona.
This indemnity shall not apply if the contractor or sub-contractor(s) is/are an
agency, board, commission or university of the State of Arizona.
5.2 Insurance Requirements
5.2.1 Contractor and subcontractors shall procure and maintain, until all of their
obligations have been discharged, including any warranty periods under
this Contract, insurance against claims for injury to persons or damage to
property arising from, or in connection with, the performance of the work
hereunder by the Contractor, its agents, representatives, employees or
subcontractors.
5.2.2 The Insurance Requirements herein are minimum requirements for this
Contract and in no way limit the indemnity covenants contained in this
Contract. The State of Arizona in no way warrants that the minimum limits
contained herein are sufficient to protect the Contractor from liabilities that
arise out of the performance of the work under this Contract by the
Contractor, its agents, representatives, employees or subcontractors, and
the Contractor is free to purchase additional insurance.
5.3 Minimum Scope and Limits of Insurance
Contractor shall provide coverage with limits of liability not less than those stated
below.
5.3.1 Commercial General Liability (CGL) – Occurrence Form
Policy shall include bodily injury, property damage, and broad form
contractual liability coverage.
• General Aggregate $2,000,000
• Products – Completed Operations Aggregate $1,000,000
• Personal and Advertising Injury $1,000,000
• Damage to Rented Premises $50,000
• Each Occurrence $1,000,000
a. The policy shall be endorsed, as required by this written agreement,
to include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees
as additional insureds with respect to liability arising out of the
activities performed by or on behalf of the Contractor.
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 27 of 183
b. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
5.3.2 Business Automobile Liability
Bodily Injury and Property Damage for any owned, hired, and/or non-
owned automobiles used in the performance of this Contract.
• Combined Single Limit (CSL) $1,000,000
a. Policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees
as additional insureds with respect to liability arising out of the
activities performed by, or on behalf of, the Contractor involving
automobiles owned, hired and/or non-owned by the Contractor.
b. Policy shall contain a waiver of subrogation endorsement as required
by this written agreement in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
5.3.3 Workers’ Compensation and Employers' Liability
• Workers' Compensation Statutory
• Employers' Liability
o Each Accident $1,000,000
o Disease – Each Employee $1,000,000
o Disease – Policy Limit $1,000,000
a. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
b. This requirement shall not apply to each Contractor or subcontractor
that is exempt under A.R.S. § 23-901, and when such Contractor or
subcontractor executes the appropriate waiver form (Sole Proprietor
or Independent Contractor).
5.4 Additional Insurance Requirements
The policies shall include, or be endorsed to include, as required by this written
agreement, the following provisions:
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 28 of 183
5.4.1 The Contractor's policies, as applicable, shall stipulate that the insurance
afforded the Contractor shall be primary and that any insurance carried by
the Department, its agents, officials, employees or the State of Arizona
shall be excess and not contributory insurance, as provided by A.R.S. §
41-621 (E).
5.4.2 Insurance provided by the Contractor shall not limit the Contractor’s liability
assumed under the indemnification provisions of this Contract.
5.5 Notice of Cancellation
Applicable to all insurance policies required within the Insurance Requirements of
this Contract, Contractor’s insurance shall not be permitted to expire, be
suspended, be canceled, or be materially changed for any reason without thirty
(30) days prior written notice to the State of Arizona. Within two (2) business days
of receipt, Contractor must provide notice to the State of Arizona if they receive
notice of a policy that has been or will be suspended, canceled, materially changed
for any reason, has expired, or will be expiring. Such notice shall be sent directly
to the Department and shall be mailed, emailed, hand delivered or sent by
facsimile transmission to (State Representative’s Name, Address & Fax Number).
5.6 Acceptability of Insurers
Contractor’s insurance shall be placed with companies licensed in the State of
Arizona or hold approved non-admitted status on the Arizona Department of
Insurance List of Qualified Unauthorized Insurers. Insurers shall have an “A.M.
Best” rating of not less than A- VII. The State of Arizona in no way warrants that
the above-required minimum insurer rating is sufficient to protect the Contractor
from potential insurer insolvency.
5.7 Verification of Coverage
Contractor shall furnish the State of Arizona with certificates of insurance (valid
ACORD form or equivalent approved by the State of Arizona) evidencing that
Contractor has the insurance as required by this Contract. An authorized
representative of the insurer shall sign the certificates.
5.7.1 All such certificates of insurance and policy endorsements must be
received by the State before work commences. The State’s receipt of any
certificates of insurance or policy endorsements that do not comply with
this written agreement shall not waive or otherwise affect the requirements
of this agreement.
5.7.2 Each insurance policy required by this Contract must be in effect at, or prior
to, commencement of work under this Contract. Failure to maintain the
insurance policies as required by this Contract, or to provide evidence of
renewal, is a material breach of contract.
5.7.3 All certificates required by this Contract shall be sent directly to the
Department. The State of Arizona project/contract number and project
description shall be noted on the certificate of insurance. The State of
Arizona reserves the right to require complete copies of all insurance
policies required by this Contract at any time.
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 29 of 183
5.8 Subcontractors
Contractor’s certificate(s) shall include all subcontractors as insureds under its
policies or Contractor shall be responsible for ensuring and/or verifying that all
subcontractors have valid and collectable insurance as evidenced by the
certificates of insurance and endorsements for each subcontractor. All coverages
for subcontractors shall be subject to the minimum Insurance Requirements
identified above. The Department reserves the right to require, at any time
throughout the life of the Contract, proof from the Contractor that its subcontractors
have the required coverage.
5.9 Approval and Modifications
The Contracting Agency, in consultation with State Risk, reserves the right to
review or make modifications to the insurance limits, required coverages, or
endorsements throughout the life of this contract, as deemed necessary. Such
action will not require a formal Contract amendment but may be made by
administrative action.
5.10 Exceptions
In the event the Contractor or subcontractor(s) is/are a public entity, then the
Insurance Requirements shall not apply. Such public entity shall provide a
certificate of self-insurance. If the Contractor or subcontractor(s) is/are a State of
Arizona agency, board, commission, or university, none of the above shall apply.
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 30 of 183
6. Standard Service Contracts Using Contractor Vehicles ($50,000 or under)
"Standard Service" contracts do not present any unique exposures to the State of Arizona,
and are not considered "Professional Services" by insurance definitions. Therefore, the
State of Arizona's standard insurance requirements that follow would be appropriate for
use in most general service contracts. Depending on the nature of the services being
provided, it may be necessary to require certain supplemental insurance coverage in
addition to the State of Arizona's standard insurance requirements in order to address
specific risks. Some of the unique services that may require supplemental insurance
coverage have been addressed in this manual separately. Please refer to the Table of
Contents in this manual for a list of such specific service contracts that do require special
insurance language. This may include but not be limited to such activities as ticket
vendors, elevator maintenance services, equipment purchase and installation, vehicle
maintenance and repair, etc.
In addition, certain contracted services may or may not involve the use of contractor
vehicles in order to perform the scope of services. Automobile liability should be required
if the contract involves the contractor's use of a vehicle as part of the services being
provided. Such use means vehicle operation beyond a commute, i.e. a trip between the
contractor’s home or principal place of business and one State agency location. Examples
of such services include delivery services, transportation of persons or property, and
vehicles used to carry contractor equipment to State of Arizona departments, agencies,
boards, commissions, universities service site, etc. The insurance requirements in this
section assume the Contractor does use vehicle(s) in the delivery of services under
the contract and therefore includes the requirement for Automobile Liability
insurance.
If the contracted services do not present any unique risks and are not professional in
nature, use the following standard insurance requirements. If you are uncertain if a
contract presents unique exposures that may require additional insurance coverage,
contact State Risk for assistance in modifying the standard insurance requirements.
6.1 Indemnification:
To the fullest extent permitted by law, Contractor shall defend, indemnify, and hold
harmless the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees (hereinafter
referred to as “Indemnitee”) from and against any and all claims, actions, liabilities,
damages, losses, or expenses (including court costs, attorneys’ fees, and costs of
claim processing, investigation and litigation) (hereinafter referred to as “Claims”)
for bodily injury or personal injury (including death), or loss or damage to tangible
or intangible property caused, or alleged to be caused, in whole or in part, by the
negligent or willful acts or omissions of Contractor or any of its owners, officers,
directors, agents, employees or subcontractors. This indemnity includes any claim
or amount arising out of, or recovered under, the Workers’ Compensation Law or
arising out of the failure of such Contractor to conform to any federal, state, or local
law, statute, ordinance, rule, regulation, or court decree. It is the specific intention
of the parties that the Indemnitee shall, in all instances, except for Claims arising
solely from the negligent or willful acts or omissions of the Indemnitee, be
indemnified by Contractor from and against any and all claims. It is agreed that
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 31 of 183
Contractor will be responsible for primary loss investigation, defense, and
judgment costs where this indemnification is applicable. In consideration of the
award of this contract, the Contractor agrees to waive all rights of subrogation
against the State of Arizona, its officers, officials, agents, and employees for losses
arising from the work performed by the Contractor for the State of Arizona.
This indemnity shall not apply if the contractor or sub-contractor(s) is/are an
agency, board, commission or university of the State of Arizona.
6.2 Insurance Requirements
6.2.1 Contractor and subcontractors shall procure and maintain, until all of their
obligations have been discharged, including any warranty periods under
this Contract, insurance against claims for injury to persons or damage to
property arising from, or in connection with, the performance of the work
hereunder by the Contractor, its agents, representatives, employees or
subcontractors.
6.2.2 The Insurance Requirements herein are minimum requirements for this
Contract and in no way limit the indemnity covenants contained in this
Contract. The State of Arizona in no way warrants that the minimum limits
contained herein are sufficient to protect the Contractor from liabilities that
arise out of the performance of the work under this Contract by the
Contractor, its agents, representatives, employees or subcontractors, and
the Contractor is free to purchase additional insurance.
6.3 Minimum Scope and Limits of Insurance
Contractor shall provide coverage with limits of liability not less than those stated
below.
6.3.1 Commercial General Liability (CGL) – Occurrence Form
Policy shall include bodily injury, property damage, and broad form
contractual liability coverage.
• General Aggregate $1,000,000
• Products – Completed Operations Aggregate $500,000
• Personal and Advertising Injury $500,000
• Damage to Rented Premises $25,000
• Each Occurrence $500,000
a. The policy shall be endorsed, as required by this written agreement,
to include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees
as additional insureds with respect to liability arising out of the
activities performed by or on behalf of the Contractor.
b. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 32 of 183
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
6.3.2 Business Automobile Liability
Bodily Injury and Property Damage for any owned, hired, and/or non-
owned automobiles used in the performance of this Contract.
• Combined Single Limit (CSL) $500,000
a. Policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees
as additional insureds with respect to liability arising out of the
activities performed by, or on behalf of, the Contractor involving
automobiles owned, hired and/or non-owned by the Contractor.
b. Policy shall contain a waiver of subrogation endorsement as required
by this written agreement in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
6.3.3 Workers’ Compensation and Employers' Liability
• Workers' Compensation Statutory
• Employers' Liability
o Each Accident $500,000
o Disease – Each Employee $500,000
o Disease – Policy Limit $500,000
a. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
b. This requirement shall not apply to each Contractor or subcontractor
that is exempt under A.R.S. § 23-901, and when such Contractor or
subcontractor executes the appropriate waiver form (Sole Proprietor
or Independent Contractor).
6.4 Additional Insurance Requirements
The policies shall include, or be endorsed to include, as required by this written
agreement, the following provisions:
6.4.1 The Contractor's policies, as applicable, shall stipulate that the insurance
afforded the Contractor shall be primary and that any insurance carried by
the Department, its agents, officials, employees or the State of Arizona
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 33 of 183
shall be excess and not contributory insurance, as provided by A.R.S. §
41-621 (E).
6.4.2 Insurance provided by the Contractor shall not limit the Contractor’s liability
assumed under the indemnification provisions of this Contract.
6.5 Notice of Cancellation
Applicable to all insurance policies required within the Insurance Requirements of
this Contract, Contractor’s insurance shall not be permitted to expire, be
suspended, be canceled, or be materially changed for any reason without thirty
(30) days prior written notice to the State of Arizona. Within two (2) business days
of receipt, Contractor must provide notice to the State of Arizona if they receive
notice of a policy that has been or will be suspended, canceled, materially changed
for any reason, has expired, or will be expiring. Such notice shall be sent directly
to the Department and shall be mailed, emailed, hand delivered or sent by
facsimile transmission to (State Representative’s Name, Address & Fax Number).
6.6 Acceptability of Insurers
Contractor’s insurance shall be placed with companies licensed in the State of
Arizona or hold approved non-admitted status on the Arizona Department of
Insurance List of Qualified Unauthorized Insurers. Insurers shall have an “A.M.
Best” rating of not less than A- VII. The State of Arizona in no way warrants that
the above-required minimum insurer rating is sufficient to protect the Contractor
from potential insurer insolvency.
6.7 Verification of Coverage
Contractor shall furnish the State of Arizona with certificates of insurance (valid
ACORD form or equivalent approved by the State of Arizona) evidencing that
Contractor has the insurance as required by this Contract. An authorized
representative of the insurer shall sign the certificates.
6.7.1 All such certificates of insurance and policy endorsements must be
received by the State before work commences. The State’s receipt of any
certificates of insurance or policy endorsements that do not comply with
this written agreement shall not waive or otherwise affect the requirements
of this agreement.
6.7.2 Each insurance policy required by this Contract must be in effect at, or prior
to, commencement of work under this Contract. Failure to maintain the
insurance policies as required by this Contract, or to provide evidence of
renewal, is a material breach of contract.
6.7.3 All certificates required by this Contract shall be sent directly to the
Department. The State of Arizona project/contract number and project
description shall be noted on the certificate of insurance. The State of
Arizona reserves the right to require complete copies of all insurance
policies required by this Contract at any time.
6.8 Subcontractors
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 34 of 183
Contractor’s certificate(s) shall include all subcontractors as insureds under its
policies or Contractor shall be responsible for ensuring and/or verifying that all
subcontractors have valid and collectable insurance as evidenced by the
certificates of insurance and endorsements for each subcontractor. All coverages
for subcontractors shall be subject to the minimum Insurance Requirements
identified above. The Department reserves the right to require, at any time
throughout the life of the Contract, proof from the Contractor that its subcontractors
have the required coverage.
6.9 Approval and Modifications
The Contracting Agency, in consultation with State Risk, reserves the right to
review or make modifications to the insurance limits, required coverages, or
endorsements throughout the life of this contract, as deemed necessary. Such
action will not require a formal Contract amendment but may be made by
administrative action.
6.10 Exceptions
In the event the Contractor or subcontractor(s) is/are a public entity, then the
Insurance Requirements shall not apply. Such public entity shall provide a
certificate of self-insurance. If the Contractor or subcontractor(s) is/are a State of
Arizona agency, board, commission, or university, none of the above shall apply.
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 35 of 183
7. Contractor Vehicles Limited to Commute
Certain contracted services will not involve the use of Contractor vehicles in order to
perform the scope of services. Automobile liability should be required if the contract
services involve the contractor's use of a vehicle as part of the services being provided.
Such use means vehicle operation beyond a commute, i.e. a trip between the contractor’s
home or principal place of business and one State agency location or destination.
If vehicles are not used to perform the scope of services outlined in the contract, the
requirement for automobile liability insurance should be omitted.
The sample requirements that follow do not include a requirement to provide automobile
liability coverage. These are used for contracts without Professional Services.
7.1 Indemnification Clause
To the fullest extent permitted by law, Contractor shall defend, indemnify, and hold
harmless the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees (hereinafter
referred to as “Indemnitee”) from and against any and all claims, actions, liabilities,
damages, losses, or expenses (including court costs, attorneys’ fees, and costs of
claim processing, investigation and litigation) (hereinafter referred to as “Claims”)
for bodily injury or personal injury (including death), or loss or damage to tangible
or intangible property caused, or alleged to be caused, in whole or in part, by the
negligent or willful acts or omissions of Contractor or any of its owners, officers,
directors, agents, employees or subcontractors. This indemnity includes any claim
or amount arising out of, or recovered under, the Workers’ Compensation Law or
arising out of the failure of such Contractor to conform to any federal, state, or local
law, statute, ordinance, rule, regulation, or court decree. It is the specific intention
of the parties that the Indemnitee shall, in all instances, except for Claims arising
solely from the negligent or willful acts or omissions of the Indemnitee, be
indemnified by Contractor from and against any and all claims. It is agreed that
Contractor will be responsible for primary loss investigation, defense, and
judgment costs where this indemnification is applicable. In consideration of the
award of this contract, the Contractor agrees to waive all rights of subrogation
against the State of Arizona, its officers, officials, agents, and employees for losses
arising from the work performed by the Contractor for the State of Arizona.
This indemnity shall not apply if the contractor or sub-contractor(s) is/are an
agency, board, commission or university of the State of Arizona.
7.2 Insurance Requirements
7.2.1 Contractor and subcontractors shall procure and maintain, until all of their
obligations have been discharged, including any warranty periods under
this Contract, insurance against claims for injury to persons or damage to
property arising from, or in connection with, the performance of the work
hereunder by the Contractor, its agents, representatives, employees or
subcontractors.
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 36 of 183
7.2.2 The Insurance Requirements herein are minimum requirements for this
Contract and in no way limit the indemnity covenants contained in this
Contract. The State of Arizona in no way warrants that the minimum limits
contained herein are sufficient to protect the Contractor from liabilities that
arise out of the performance of the work under this Contract by the
Contractor, its agents, representatives, employees or subcontractors, and
the Contractor is free to purchase additional insurance.
7.3 Minimum Scope and Limits of Insurance
Contractor shall provide coverage with limits of liability not less than those stated
below.
7.3.1 Commercial General Liability (CGL) – Occurrence Form
Policy shall include bodily injury, property damage, and broad form
contractual liability coverage.
• General Aggregate $2,000,000
• Products – Completed Operations Aggregate $1,000,000
• Personal and Advertising Injury $1,000,000
• Damage to Rented Premises $50,000
• Each Occurrence $1,000,000
a. The policy shall be endorsed, as required by this written agreement,
to include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees
as additional insureds with respect to liability arising out of the
activities performed by or on behalf of the Contractor.
b. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
7.3.2 Workers’ Compensation and Employers' Liability
• Workers' Compensation Statutory
• Employers' Liability
o Each Accident $1,000,000
o Disease – Each Employee $1,000,000
o Disease – Policy Limit $1,000,000
a. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 37 of 183
b. This requirement shall not apply to each Contractor or subcontractor
that is exempt under A.R.S. § 23-901, and when such Contractor or
subcontractor executes the appropriate waiver form (Sole Proprietor
or Independent Contractor).
7.4 Additional Insurance Requirements
The policies shall include, or be endorsed to include, as required by this written
agreement, the following provisions:
7.4.1 The Contractor's policies, as applicable, shall stipulate that the insurance
afforded the Contractor shall be primary and that any insurance carried by
the Department, its agents, officials, employees or the State of Arizona
shall be excess and not contributory insurance, as provided by A.R.S. §
41-621 (E).
7.4.2 Insurance provided by the Contractor shall not limit the Contractor’s liability
assumed under the indemnification provisions of this Contract.
7.5 Notice of Cancellation
Applicable to all insurance policies required within the Insurance Requirements of
this Contract, Contractor’s insurance shall not be permitted to expire, be
suspended, be canceled, or be materially changed for any reason without thirty
(30) days prior written notice to the State of Arizona. Within two (2) business days
of receipt, Contractor must provide notice to the State of Arizona if they receive
notice of a policy that has been or will be suspended, canceled, materially changed
for any reason, has expired, or will be expiring. Such notice shall be sent directly
to the Department and shall be mailed, emailed, hand delivered or sent by
facsimile transmission to (State Representative’s Name, Address & Fax Number).
7.6 Acceptability of Insurers
Contractor’s insurance shall be placed with companies licensed in the State of
Arizona or hold approved non-admitted status on the Arizona Department of
Insurance List of Qualified Unauthorized Insurers. Insurers shall have an “A.M.
Best” rating of not less than A- VII. The State of Arizona in no way warrants that
the above-required minimum insurer rating is sufficient to protect the Contractor
from potential insurer insolvency.
7.7 Verification of Coverage
Contractor shall furnish the State of Arizona with certificates of insurance (valid
ACORD form or equivalent approved by the State of Arizona) evidencing that
Contractor has the insurance as required by this Contract. An authorized
representative of the insurer shall sign the certificates.
7.7.1 All such certificates of insurance and policy endorsements must be
received by the State before work commences. The State’s receipt of any
certificates of insurance or policy endorsements that do not comply with
this written agreement shall not waive or otherwise affect the requirements
of this agreement.
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 38 of 183
7.7.2 Each insurance policy required by this Contract must be in effect at, or prior
to, commencement of work under this Contract. Failure to maintain the
insurance policies as required by this Contract, or to provide evidence of
renewal, is a material breach of contract.
7.7.3 All certificates required by this Contract shall be sent directly to the
Department. The State of Arizona project/contract number and project
description shall be noted on the certificate of insurance. The State of
Arizona reserves the right to require complete copies of all insurance
policies required by this Contract at any time.
7.8 Subcontractors
Contractor’s certificate(s) shall include all subcontractors as insureds under its
policies or Contractor shall be responsible for ensuring and/or verifying that all
subcontractors have valid and collectable insurance as evidenced by the
certificates of insurance and endorsements for each subcontractor. All coverages
for subcontractors shall be subject to the minimum Insurance Requirements
identified above. The Department reserves the right to require, at any time
throughout the life of the Contract, proof from the Contractor that its subcontractors
have the required coverage.
7.9 Approval and Modifications
The Contracting Agency, in consultation with State Risk, reserves the right to
review or make modifications to the insurance limits, required coverages, or
endorsements throughout the life of this contract, as deemed necessary. Such
action will not require a formal Contract amendment but may be made by
administrative action.
7.10 Exceptions
In the event the Contractor or subcontractor(s) is/are a public entity, then the
Insurance Requirements shall not apply. Such public entity shall provide a
certificate of self-insurance. If the Contractor or subcontractor(s) is/are a State of
Arizona agency, board, commission, or university, none of the above shall apply.
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 39 of 183
8. Contractor Vehicles Limited to Commute ($50,000 or under)
Certain contracted services will not involve the use of Contractor vehicles in order to
perform the scope of services. Automobile liability should be required if the contract
services involve the contractor's use of a vehicle as part of the services being provided.
Such use means vehicle operation beyond a commute, i.e. a trip between the contractor’s
home or principal place of business and one State agency location or destination.
If vehicles are not used to perform the scope of services outlined in the contract, the
requirement for automobile liability insurance should be omitted.
The sample requirements that follow do not include a requirement to provide automobile
liability coverage. These are used for contracts without Professional Services.
8.1 Indemnification Clause
To the fullest extent permitted by law, Contractor shall defend, indemnify, and hold
harmless the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees (hereinafter
referred to as “Indemnitee”) from and against any and all claims, actions, liabilities,
damages, losses, or expenses (including court costs, attorneys’ fees, and costs of
claim processing, investigation and litigation) (hereinafter referred to as “Claims”)
for bodily injury or personal injury (including death), or loss or damage to tangible
or intangible property caused, or alleged to be caused, in whole or in part, by the
negligent or willful acts or omissions of Contractor or any of its owners, officers,
directors, agents, employees or subcontractors. This indemnity includes any claim
or amount arising out of, or recovered under, the Workers’ Compensation Law or
arising out of the failure of such Contractor to conform to any federal, state, or local
law, statute, ordinance, rule, regulation, or court decree. It is the specific intention
of the parties that the Indemnitee shall, in all instances, except for Claims arising
solely from the negligent or willful acts or omissions of the Indemnitee, be
indemnified by Contractor from and against any and all claims. It is agreed that
Contractor will be responsible for primary loss investigation, defense, and
judgment costs where this indemnification is applicable. In consideration of the
award of this contract, the Contractor agrees to waive all rights of subrogation
against the State of Arizona, its officers, officials, agents, and employees for losses
arising from the work performed by the Contractor for the State of Arizona.
This indemnity shall not apply if the contractor or sub-contractor(s) is/are an
agency, board, commission or university of the State of Arizona.
8.2 Insurance Requirements
8.2.1 Contractor and subcontractors shall procure and maintain, until all of their
obligations have been discharged, including any warranty periods under
this Contract, insurance against claims for injury to persons or damage to
property arising from, or in connection with, the performance of the work
hereunder by the Contractor, its agents, representatives, employees or
subcontractors.
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 40 of 183
8.2.2 The Insurance Requirements herein are minimum requirements for this
Contract and in no way limit the indemnity covenants contained in this
Contract. The State of Arizona in no way warrants that the minimum limits
contained herein are sufficient to protect the Contractor from liabilities that
arise out of the performance of the work under this Contract by the
Contractor, its agents, representatives, employees or subcontractors, and
the Contractor is free to purchase additional insurance.
8.3 Minimum Scope and Limits of Insurance
Contractor shall provide coverage with limits of liability not less than those stated
below.
8.3.1 Commercial General Liability (CGL) – Occurrence Form
Policy shall include bodily injury, property damage, and broad form
contractual liability coverage.
• General Aggregate $1,000,000
• Products – Completed Operations Aggregate $500,000
• Personal and Advertising Injury $500,000
• Damage to Rented Premises $25,000
• Each Occurrence $500,000
a. The policy shall be endorsed, as required by this written agreement,
to include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees
as additional insureds with respect to liability arising out of the
activities performed by or on behalf of the Contractor.
b. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
8.3.2 Workers’ Compensation and Employers' Liability
• Workers' Compensation Statutory
• Employers' Liability
o Each Accident $500,000
o Disease – Each Employee $500,000
o Disease – Policy Limit $500,000
a. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 41 of 183
b. This requirement shall not apply to each Contractor or subcontractor
that is exempt under A.R.S. § 23-901, and when such Contractor or
subcontractor executes the appropriate waiver form (Sole Proprietor
or Independent Contractor).
8.4 Additional Insurance Requirements
The policies shall include, or be endorsed to include, as required by this written
agreement, the following provisions:
8.4.1 The Contractor's policies, as applicable, shall stipulate that the insurance
afforded the Contractor shall be primary and that any insurance carried by
the Department, its agents, officials, employees or the State of Arizona
shall be excess and not contributory insurance, as provided by A.R.S. §
41-621 (E).
8.4.2 Insurance provided by the Contractor shall not limit the Contractor’s liability
assumed under the indemnification provisions of this Contract.
8.5 Notice of Cancellation
Applicable to all insurance policies required within the Insurance Requirements of
this Contract, Contractor’s insurance shall not be permitted to expire, be
suspended, be canceled, or be materially changed for any reason without thirty
(30) days prior written notice to the State of Arizona. Within two (2) business days
of receipt, Contractor must provide notice to the State of Arizona if they receive
notice of a policy that has been or will be suspended, canceled, materially changed
for any reason, has expired, or will be expiring. Such notice shall be sent directly
to the Department and shall be mailed, emailed, hand delivered or sent by
facsimile transmission to (State Representative’s Name, Address & Fax Number).
8.6 Acceptability of Insurers
Contractor’s insurance shall be placed with companies licensed in the State of
Arizona or hold approved non-admitted status on the Arizona Department of
Insurance List of Qualified Unauthorized Insurers. Insurers shall have an “A.M.
Best” rating of not less than A- VII. The State of Arizona in no way warrants that
the above-required minimum insurer rating is sufficient to protect the Contractor
from potential insurer insolvency.
8.7 Verification of Coverage
Contractor shall furnish the State of Arizona with certificates of insurance (valid
ACORD form or equivalent approved by the State of Arizona) evidencing that
Contractor has the insurance as required by this Contract. An authorized
representative of the insurer shall sign the certificates.
8.7.1 All such certificates of insurance and policy endorsements must be
received by the State before work commences. The State’s receipt of any
certificates of insurance or policy endorsements that do not comply with
this written agreement shall not waive or otherwise affect the requirements
of this agreement.
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 42 of 183
8.7.2 Each insurance policy required by this Contract must be in effect at, or prior
to, commencement of work under this Contract. Failure to maintain the
insurance policies as required by this Contract, or to provide evidence of
renewal, is a material breach of contract.
8.7.3 All certificates required by this Contract shall be sent directly to the
Department. The State of Arizona project/contract number and project
description shall be noted on the certificate of insurance. The State of
Arizona reserves the right to require complete copies of all insurance
policies required by this Contract at any time.
8.8 Subcontractors
Contractor’s certificate(s) shall include all subcontractors as insureds under its
policies or Contractor shall be responsible for ensuring and/or verifying that all
subcontractors have valid and collectable insurance as evidenced by the
certificates of insurance and endorsements for each subcontractor. All coverages
for subcontractors shall be subject to the minimum Insurance Requirements
identified above. The Department reserves the right to require, at any time
throughout the life of the Contract, proof from the Contractor that its subcontractors
have the required coverage.
8.9 Approval and Modifications
The Contracting Agency, in consultation with State Risk, reserves the right to
review or make modifications to the insurance limits, required coverages, or
endorsements throughout the life of this contract, as deemed necessary. Such
action will not require a formal Contract amendment but may be made by
administrative action.
8.10 Exceptions
In the event the Contractor or subcontractor(s) is/are a public entity, then the
Insurance Requirements shall not apply. Such public entity shall provide a
certificate of self-insurance. If the Contractor or subcontractor(s) is/are a State of
Arizona agency, board, commission, or university, none of the above shall apply.
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 43 of 183
9. Service Contracts At a State Owned or Leased Airport
Contractors providing services at an airport on the airside (inside the fence) have a much
higher risk of loss due to their physical relationship with the flow of air traffic. For this
reason, we require that these contractors provide higher liability limits.
The Insurance Requirements section should be amended to require the Contractor
provide both general liability (to include airports) and auto liability (to include airports) with
minimum limits of $5,000,000 per occurrence and $5,000,000 in the aggregate.
Note: This can be accomplished by providing the full $5,000,000 under each primary
general and auto liability policy or as a combination of primary general and auto liability
insurance and excess/umbrella liability insurance should follow form.
Please contact State Risk for appropriate requirements for all other aviation related
activities, i.e. aircraft storage, fixed based operators, and tenants.
9.1 Indemnification Clause
To the fullest extent permitted by law, Contractor shall defend, indemnify, and hold
harmless the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees (hereinafter
referred to as “Indemnitee”) from and against any and all claims, actions, liabilities,
damages, losses, or expenses (including court costs, attorneys’ fees, and costs of
claim processing, investigation and litigation) (hereinafter referred to as “Claims”)
for bodily injury or personal injury (including death), or loss or damage to tangible
or intangible property caused, or alleged to be caused, in whole or in part, by the
negligent or willful acts or omissions of Contractor or any of its owners, officers,
directors, agents, employees or subcontractors. This indemnity includes any claim
or amount arising out of, or recovered under, the Workers’ Compensation Law or
arising out of the failure of such Contractor to conform to any federal, state, or local
law, statute, ordinance, rule, regulation, or court decree. It is the specific intention
of the parties that the Indemnitee shall, in all instances, except for Claims arising
solely from the negligent or willful acts or omissions of the Indemnitee, be
indemnified by Contractor from and against any and all claims. It is agreed that
Contractor will be responsible for primary loss investigation, defense, and
judgment costs where this indemnification is applicable. In consideration of the
award of this contract, the Contractor agrees to waive all rights of subrogation
against the State of Arizona, its officers, officials, agents, and employees for losses
arising from the work performed by the Contractor for the State of Arizona.
This indemnity shall not apply if the contractor or sub-contractor(s) is/are an
agency, board, commission or university of the State of Arizona.
9.2 Insurance Requirements
9.2.1 Contractor and subcontractors shall procure and maintain, until all of their
obligations have been discharged, including any warranty periods under
this Contract, insurance against claims for injury to persons or damage to
property arising from, or in connection with, the performance of the work
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 44 of 183
hereunder by the Contractor, its agents, representatives, employees or
subcontractors.
9.2.2 The Insurance Requirements herein are minimum requirements for this
Contract and in no way limit the indemnity covenants contained in this
Contract. The State of Arizona in no way warrants that the minimum limits
contained herein are sufficient to protect the Contractor from liabilities that
arise out of the performance of the work under this Contract by the
Contractor, its agents, representatives, employees or subcontractors, and
the Contractor is free to purchase additional insurance.
9.3 Minimum Scope and Limits of Insurance
Contractor shall provide coverage with limits of liability not less than those stated
below.
9.3.1 Commercial General Liability (CGL) – Occurrence Form
Policy shall include bodily injury, property damage, and broad form
contractual liability coverage. Policy shall be endorsed to include airports.
• General Aggregate $5,000,000
• Products – Completed Operations Aggregate $5,000,000
• Personal and Advertising Injury $5,000,000
• Damage to Rented Premises $50,000
• Each Occurrence $5,000,000
a. The policy shall be endorsed, as required by this written agreement,
to include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees
as additional insureds with respect to liability arising out of the
activities performed by or on behalf of the Contractor.
b. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
9.3.2 Business Automobile Liability
Bodily Injury and Property Damage for any owned, hired, and/or non-
owned automobiles used in the performance of this Contract. Policy shall
be endorsed to include airports.
• Combined Single Limit (CSL) $5,000,000
a. Policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees
as additional insureds with respect to liability arising out of the
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 45 of 183
activities performed by, or on behalf of, the Contractor involving
automobiles owned, hired and/or non-owned by the Contractor.
b. Policy shall contain a waiver of subrogation endorsement as required
by this written agreement in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
9.3.3 Workers’ Compensation and Employers' Liability
• Workers' Compensation Statutory
• Employers' Liability
o Each Accident $1,000,000
o Disease – Each Employee $1,000,000
o Disease – Policy Limit $1,000,000
a. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
b. This requirement shall not apply to each Contractor or subcontractor
that is exempt under A.R.S. § 23-901, and when such Contractor or
subcontractor executes the appropriate waiver form (Sole Proprietor
or Independent Contractor).
9.4 Additional Insurance Requirements
The policies shall include, or be endorsed to include, as required by this written
agreement, the following provisions:
9.4.1 The Contractor's policies, as applicable, shall stipulate that the insurance
afforded the Contractor shall be primary and that any insurance carried by
the Department, its agents, officials, employees or the State of Arizona
shall be excess and not contributory insurance, as provided by A.R.S. §
41-621 (E).
9.4.2 Insurance provided by the Contractor shall not limit the Contractor’s liability
assumed under the indemnification provisions of this Contract.
9.5 Notice of Cancellation
Applicable to all insurance policies required within the Insurance Requirements of
this Contract, Contractor’s insurance shall not be permitted to expire, be
suspended, be canceled, or be materially changed for any reason without thirty
(30) days prior written notice to the State of Arizona. Within two (2) business days
of receipt, Contractor must provide notice to the State of Arizona if they receive
notice of a policy that has been or will be suspended, canceled, materially changed
for any reason, has expired, or will be expiring. Such notice shall be sent directly
to the Department and shall be mailed, emailed, hand delivered or sent by
facsimile transmission to (State Representative’s Name, Address & Fax Number).
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 46 of 183
9.6 Acceptability of Insurers
Contractor’s insurance shall be placed with companies licensed in the State of
Arizona or hold approved non-admitted status on the Arizona Department of
Insurance List of Qualified Unauthorized Insurers. Insurers shall have an “A.M.
Best” rating of not less than A- VII. The State of Arizona in no way warrants that
the above-required minimum insurer rating is sufficient to protect the Contractor
from potential insurer insolvency.
9.7 Verification of Coverage
Contractor shall furnish the State of Arizona with certificates of insurance (valid
ACORD form or equivalent approved by the State of Arizona) evidencing that
Contractor has the insurance as required by this Contract. An authorized
representative of the insurer shall sign the certificates.
9.7.1 All such certificates of insurance and policy endorsements must be
received by the State before work commences. The State’s receipt of any
certificates of insurance or policy endorsements that do not comply with
this written agreement shall not waive or otherwise affect the requirements
of this agreement.
9.7.2 Each insurance policy required by this Contract must be in effect at, or prior
to, commencement of work under this Contract. Failure to maintain the
insurance policies as required by this Contract, or to provide evidence of
renewal, is a material breach of contract.
9.7.3 All certificates required by this Contract shall be sent directly to the
Department. The State of Arizona project/contract number and project
description shall be noted on the certificate of insurance. The State of
Arizona reserves the right to require complete copies of all insurance
policies required by this Contract at any time.
9.8 Subcontractors
Contractor’s certificate(s) shall include all subcontractors as insureds under its
policies or Contractor shall be responsible for ensuring and/or verifying that all
subcontractors have valid and collectable insurance as evidenced by the
certificates of insurance and endorsements for each subcontractor. All coverages
for subcontractors shall be subject to the minimum Insurance Requirements
identified above. The Department reserves the right to require, at any time
throughout the life of the Contract, proof from the Contractor that its subcontractors
have the required coverage.
9.9 Approval and Modifications
The Contracting Agency, in consultation with State Risk, reserves the right to
review or make modifications to the insurance limits, required coverages, or
endorsements throughout the life of this contract, as deemed necessary. Such
action will not require a formal Contract amendment but may be made by
administrative action.
9.10 Exceptions
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 47 of 183
In the event the Contractor or subcontractor(s) is/are a public entity, then the
Insurance Requirements shall not apply. Such public entity shall provide a
certificate of self-insurance. If the Contractor or subcontractor(s) is/are a State of
Arizona agency, board, commission, or university, none of the above shall apply.
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 48 of 183
10. Janitorial / Building Maintenance / Caretaker Services
In contracts where the Contractor is providing janitorial, building maintenance or caretaker
services to the State of Arizona, they may be responsible for keeping a "master key" to
the property. In the event that the Contractor loses the master key, this coverage will pay
the expense to have the building "re-keyed.”
This supplemental coverage should be added to the standard insurance requirements.
The following sample requirement includes the addition of this supplemental insurance
requirement.
10.1 Indemnification Clause
To the fullest extent permitted by law, Contractor shall defend, indemnify, and hold
harmless the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees (hereinafter
referred to as “Indemnitee”) from and against any and all claims, actions, liabilities,
damages, losses, or expenses (including court costs, attorneys’ fees, and costs of
claim processing, investigation and litigation) (hereinafter referred to as “Claims”)
for bodily injury or personal injury (including death), or loss or damage to tangible
or intangible property caused, or alleged to be caused, in whole or in part, by the
negligent or willful acts or omissions of Contractor or any of its owners, officers,
directors, agents, employees or subcontractors. This indemnity includes any claim
or amount arising out of, or recovered under, the Workers’ Compensation Law or
arising out of the failure of such Contractor to conform to any federal, state, or local
law, statute, ordinance, rule, regulation, or court decree. It is the specific intention
of the parties that the Indemnitee shall, in all instances, except for Claims arising
solely from the negligent or willful acts or omissions of the Indemnitee, be
indemnified by Contractor from and against any and all claims. It is agreed that
Contractor will be responsible for primary loss investigation, defense, and
judgment costs where this indemnification is applicable. In consideration of the
award of this contract, the Contractor agrees to waive all rights of subrogation
against the State of Arizona, its officers, officials, agents, and employees for losses
arising from the work performed by the Contractor for the State of Arizona.
This indemnity shall not apply if the contractor or sub-contractor(s) is/are an
agency, board, commission or university of the State of Arizona.
10.2 Insurance Requirements
10.2.1 Contractor and subcontractors shall procure and maintain, until all of their
obligations have been discharged, including any warranty periods under
this Contract, insurance against claims for injury to persons or damage to
property arising from, or in connection with, the performance of the work
hereunder by the Contractor, its agents, representatives, employees or
subcontractors.
10.2.2 The Insurance Requirements herein are minimum requirements for this
Contract and in no way limit the indemnity covenants contained in this
Contract. The State of Arizona in no way warrants that the minimum limits
contained herein are sufficient to protect the Contractor from liabilities that
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 49 of 183
arise out of the performance of the work under this Contract by the
Contractor, its agents, representatives, employees or subcontractors, and
the Contractor is free to purchase additional insurance.
10.3 Minimum Scope and Limits of Insurance
Contractor shall provide coverage with limits of liability not less than those stated
below.
10.3.1 Commercial General Liability (CGL) – Occurrence Form
Policy shall include bodily injury, property damage, and broad form
contractual liability coverage.
• General Aggregate $2,000,000
• Products – Completed Operations Aggregate $1,000,000
• Personal and Advertising Injury $1,000,000
• Damage to Rented Premises $50,000
• Each Occurrence $1,000,000
The policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees as
additional insureds with respect to liability arising out of the activities
performed by or on behalf of the Contractor.
Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work performed
by or on behalf of the Contractor.
The Policy shall be endorsed to include master key coverage.
Policy shall be endorsed to include coverage for Broad Form Property
Damage.
10.3.2 Business Automobile Liability
Bodily Injury and Property Damage for any owned, hired, and/or non-
owned automobiles used in the performance of this Contract.
• Combined Single Limit (CSL) $1,000,000
a. Policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees
as additional insureds with respect to liability arising out of the
activities performed by, or on behalf of, the Contractor involving
automobiles owned, hired and/or non-owned by the Contractor.
b. Policy shall contain a waiver of subrogation endorsement as required
by this written agreement in favor of the State of Arizona, and its
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 50 of 183
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
10.3.3 Workers’ Compensation and Employers' Liability
• Workers' Compensation Statutory
• Employers' Liability
o Each Accident $1,000,000
o Disease – Each Employee $1,000,000
o Disease – Policy Limit $1,000,000
a. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
b. This requirement shall not apply to each Contractor or subcontractor
that is exempt under A.R.S. § 23-901, and when such Contractor or
subcontractor executes the appropriate waiver form (Sole Proprietor
or Independent Contractor).
10.4 Additional Insurance Requirements
The policies shall include, or be endorsed to include, as required by this written
agreement, the following provisions:
10.4.1 The Contractor's policies, as applicable, shall stipulate that the insurance
afforded the Contractor shall be primary and that any insurance carried by
the Department, its agents, officials, employees or the State of Arizona
shall be excess and not contributory insurance, as provided by A.R.S. §
41-621 (E).
10.4.2 Insurance provided by the Contractor shall not limit the Contractor’s liability
assumed under the indemnification provisions of this Contract.
10.5 Notice of Cancellation
Applicable to all insurance policies required within the Insurance Requirements of
this Contract, Contractor’s insurance shall not be permitted to expire, be
suspended, be canceled, or be materially changed for any reason without thirty
(30) days prior written notice to the State of Arizona. Within two (2) business days
of receipt, Contractor must provide notice to the State of Arizona if they receive
notice of a policy that has been or will be suspended, canceled, materially changed
for any reason, has expired, or will be expiring. Such notice shall be sent directly
to the Department and shall be mailed, emailed, hand delivered or sent by
facsimile transmission to (State Representative’s Name, Address & Fax Number).
10.6 Acceptability of Insurers
Contractor’s insurance shall be placed with companies licensed in the State of
Arizona or hold approved non-admitted status on the Arizona Department of
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 51 of 183
Insurance List of Qualified Unauthorized Insurers. Insurers shall have an “A.M.
Best” rating of not less than A- VII. The State of Arizona in no way warrants that
the above-required minimum insurer rating is sufficient to protect the Contractor
from potential insurer insolvency.
10.7 Verification of Coverage
Contractor shall furnish the State of Arizona with certificates of insurance (valid
ACORD form or equivalent approved by the State of Arizona) evidencing that
Contractor has the insurance as required by this Contract. An authorized
representative of the insurer shall sign the certificates.
10.7.1 All such certificates of insurance and policy endorsements must be
received by the State before work commences. The State’s receipt of any
certificates of insurance or policy endorsements that do not comply with
this written agreement shall not waive or otherwise affect the requirements
of this agreement.
10.7.2 Each insurance policy required by this Contract must be in effect at, or prior
to, commencement of work under this Contract. Failure to maintain the
insurance policies as required by this Contract, or to provide evidence of
renewal, is a material breach of contract.
10.7.3 All certificates required by this Contract shall be sent directly to the
Department. The State of Arizona project/contract number and project
description shall be noted on the certificate of insurance. The State of
Arizona reserves the right to require complete copies of all insurance
policies required by this Contract at any time.
10.8 Subcontractors
Contractor’s certificate(s) shall include all subcontractors as insureds under its
policies or Contractor shall be responsible for ensuring and/or verifying that all
subcontractors have valid and collectable insurance as evidenced by the
certificates of insurance and endorsements for each subcontractor. All coverages
for subcontractors shall be subject to the minimum Insurance Requirements
identified above. The Department reserves the right to require, at any time
throughout the life of the Contract, proof from the Contractor that its subcontractors
have the required coverage.
10.9 Approval and Modifications
The Contracting Agency, in consultation with State Risk, reserves the right to
review or make modifications to the insurance limits, required coverages, or
endorsements throughout the life of this contract, as deemed necessary. Such
action will not require a formal Contract amendment but may be made by
administrative action.
10.10 Exceptions
In the event the Contractor or subcontractor(s) is/are a public entity, then the
Insurance Requirements shall not apply. Such public entity shall provide a
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 52 of 183
certificate of self-insurance. If the Contractor or subcontractor(s) is/are a State of
Arizona agency, board, commission, or university, none of the above shall apply.
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 53 of 183
11. Janitorial / Building Maintenance / Caretaker Services ($50,000 or under)
In contracts where the Contractor is providing janitorial, building maintenance or caretaker
services to the State of Arizona, they may be responsible for keeping a "master key" to
the property. In the event that the Contractor loses the master key, this coverage will pay
the expense to have the building "re-keyed.”
This supplemental coverage should be added to the standard insurance requirements.
The following sample requirement includes the addition of this supplemental insurance
requirement.
11.1 Indemnification Clause
To the fullest extent permitted by law, Contractor shall defend, indemnify, and hold
harmless the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees (hereinafter
referred to as “Indemnitee”) from and against any and all claims, actions, liabilities,
damages, losses, or expenses (including court costs, attorneys’ fees, and costs of
claim processing, investigation and litigation) (hereinafter referred to as “Claims”)
for bodily injury or personal injury (including death), or loss or damage to tangible
or intangible property caused, or alleged to be caused, in whole or in part, by the
negligent or willful acts or omissions of Contractor or any of its owners, officers,
directors, agents, employees or subcontractors. This indemnity includes any claim
or amount arising out of, or recovered under, the Workers’ Compensation Law or
arising out of the failure of such Contractor to conform to any federal, state, or local
law, statute, ordinance, rule, regulation, or court decree. It is the specific intention
of the parties that the Indemnitee shall, in all instances, except for Claims arising
solely from the negligent or willful acts or omissions of the Indemnitee, be
indemnified by Contractor from and against any and all claims. It is agreed that
Contractor will be responsible for primary loss investigation, defense, and
judgment costs where this indemnification is applicable. In consideration of the
award of this contract, the Contractor agrees to waive all rights of subrogation
against the State of Arizona, its officers, officials, agents, and employees for losses
arising from the work performed by the Contractor for the State of Arizona.
This indemnity shall not apply if the contractor or sub-contractor(s) is/are an
agency, board, commission or university of the State of Arizona.
11.2 Insurance Requirements
11.2.1 Contractor and subcontractors shall procure and maintain, until all of their
obligations have been discharged, including any warranty periods under
this Contract, insurance against claims for injury to persons or damage to
property arising from, or in connection with, the performance of the work
hereunder by the Contractor, its agents, representatives, employees or
subcontractors.
11.2.2 The Insurance Requirements herein are minimum requirements for this
Contract and in no way limit the indemnity covenants contained in this
Contract. The State of Arizona in no way warrants that the minimum limits
contained herein are sufficient to protect the Contractor from liabilities that
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 54 of 183
arise out of the performance of the work under this Contract by the
Contractor, its agents, representatives, employees or subcontractors, and
the Contractor is free to purchase additional insurance.
11.3 Minimum Scope and Limits of Insurance
Contractor shall provide coverage with limits of liability not less than those stated
below.
11.3.1 Commercial General Liability (CGL) – Occurrence Form
Policy shall include bodily injury, property damage, and broad form
contractual liability coverage.
• General Aggregate $1,000,000
• Products – Completed Operations Aggregate $500,000
• Personal and Advertising Injury $500,000
• Damage to Rented Premises $25,000
• Each Occurrence $500,000
The policy shall be endorsed, as required by this written agreement,
to include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees
as additional insureds with respect to liability arising out of the
activities performed by or on behalf of the Contractor.
Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
The Policy shall be endorsed to include master key coverage.
Policy shall be endorsed to include coverage for Broad Form Property
Damage.
11.3.2 Business Automobile Liability
Bodily Injury and Property Damage for any owned, hired, and/or non-
owned automobiles used in the performance of this Contract.
• Combined Single Limit (CSL) $500,000
a. Policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees
as additional insureds with respect to liability arising out of the
activities performed by, or on behalf of, the Contractor involving
automobiles owned, hired and/or non-owned by the Contractor.
b. Policy shall contain a waiver of subrogation endorsement as required
by this written agreement in favor of the State of Arizona, and its
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 55 of 183
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
11.3.3 Workers’ Compensation and Employers' Liability
• Workers' Compensation Statutory
• Employers' Liability
o Each Accident $500,000
o Disease – Each Employee $500,000
o Disease – Policy Limit $500,000
a. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
b. This requirement shall not apply to each Contractor or subcontractor
that is exempt under A.R.S. § 23-901, and when such Contractor or
subcontractor executes the appropriate waiver form (Sole Proprietor
or Independent Contractor).
11.4 Additional Insurance Requirements
The policies shall include, or be endorsed to include, as required by this written
agreement, the following provisions:
11.4.1 The Contractor's policies, as applicable, shall stipulate that the insurance
afforded the Contractor shall be primary and that any insurance carried by
the Department, its agents, officials, employees or the State of Arizona
shall be excess and not contributory insurance, as provided by A.R.S. §
41-621 (E).
11.4.2 Insurance provided by the Contractor shall not limit the Contractor’s liability
assumed under the indemnification provisions of this Contract.
11.5 Notice of Cancellation
Applicable to all insurance policies required within the Insurance Requirements of
this Contract, Contractor’s insurance shall not be permitted to expire, be
suspended, be canceled, or be materially changed for any reason without thirty
(30) days prior written notice to the State of Arizona. Within two (2) business days
of receipt, Contractor must provide notice to the State of Arizona if they receive
notice of a policy that has been or will be suspended, canceled, materially changed
for any reason, has expired, or will be expiring. Such notice shall be sent directly
to the Department and shall be mailed, emailed, hand delivered or sent by
facsimile transmission to (State Representative’s Name, Address & Fax Number).
11.6 Acceptability of Insurers
Contractor’s insurance shall be placed with companies licensed in the State of
Arizona or hold approved non-admitted status on the Arizona Department of
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 56 of 183
Insurance List of Qualified Unauthorized Insurers. Insurers shall have an “A.M.
Best” rating of not less than A- VII. The State of Arizona in no way warrants that
the above-required minimum insurer rating is sufficient to protect the Contractor
from potential insurer insolvency.
11.7 Verification of Coverage
Contractor shall furnish the State of Arizona with certificates of insurance (valid
ACORD form or equivalent approved by the State of Arizona) evidencing that
Contractor has the insurance as required by this Contract. An authorized
representative of the insurer shall sign the certificates.
11.7.1 All such certificates of insurance and policy endorsements must be
received by the State before work commences. The State’s receipt of any
certificates of insurance or policy endorsements that do not comply with
this written agreement shall not waive or otherwise affect the requirements
of this agreement.
11.7.2 Each insurance policy required by this Contract must be in effect at, or prior
to, commencement of work under this Contract. Failure to maintain the
insurance policies as required by this Contract, or to provide evidence of
renewal, is a material breach of contract.
11.7.3 All certificates required by this Contract shall be sent directly to the
Department. The State of Arizona project/contract number and project
description shall be noted on the certificate of insurance. The State of
Arizona reserves the right to require complete copies of all insurance
policies required by this Contract at any time.
11.8 Subcontractors
Contractor’s certificate(s) shall include all subcontractors as insureds under its
policies or Contractor shall be responsible for ensuring and/or verifying that all
subcontractors have valid and collectable insurance as evidenced by the
certificates of insurance and endorsements for each subcontractor. All coverages
for subcontractors shall be subject to the minimum Insurance Requirements
identified above. The Department reserves the right to require, at any time
throughout the life of the Contract, proof from the Contractor that its subcontractors
have the required coverage.
11.9 Approval and Modifications
The Contracting Agency, in consultation with State Risk, reserves the right to
review or make modifications to the insurance limits, required coverages, or
endorsements throughout the life of this contract, as deemed necessary. Such
action will not require a formal Contract amendment but may be made by
administrative action.
11.10 Exceptions
In the event the Contractor or subcontractor(s) is/are a public entity, then the
Insurance Requirements shall not apply. Such public entity shall provide a
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 57 of 183
certificate of self-insurance. If the Contractor or subcontractor(s) is/are a State of
Arizona agency, board, commission, or university, none of the above shall apply.
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 58 of 183
12. Security Services Contracts - With Use of an Armored Car for Transport of Monies
In contracts where the Contractor is providing security or armored car services to transport
monies and/or securities to the State of Arizona, the insurance requirements should
include some very specialized insurance coverage that are specific to this industry.
General liability policies typically exclude many activities performed by security services.
Therefore, either the contractor’s policy must be endorsed to cover certain security
service risks, or separate policies may need to be purchased. For example:
• Security may be responsible for keeping a "master key" to the property. In the
event that the contracted security staff loses the master key, this coverage will pay
the expense to have the building "re-keyed.”
• Coverage for bodily injury and property damage, resulting from the use of
reasonable force for the purpose of protecting persons or property, should be
included.
• Special errors and omissions coverage for companies providing security services
should be included.
• The contractor's policy should include coverage for property in the care, custody,
and control of the contractor.
• If the security service is handling State of Arizona money, securities, or other
valuable property, third-party fidelity insurance shall be provided, including
coverage for theft and mysterious disappearance.
Note: Because the duties and responsibilities of security personnel pose a higher risk
to the State of Arizona, State Risk recommends that higher limits of liability are
required. The Contractor can accomplish this by providing the full-required limits under
the primary general liability policy or a combination of a primary general liability
insurance and excess/umbrella liability insurance in order to attain the total required
limits of liability. In contracts in which the Contractor or employees of the Contractor
handle money on behalf of the State of Arizona, a Commercial Crime Policy or Blanket
Fidelity Bond should be required that includes third party fidelity coverage. The
Commercial Crime Policy or Blanket Fidelity Bond shall provide coverage for all
officers, directors, employees, and agents of the Contractor who are responsible for
receiving, depositing, or transferring funds into program accounts, or issuing financial
documents, checks or other instruments of payment for program costs. Generally,
companies having more than just a few employees will need to purchase a
Commercial Crime Policy or a Blanket Fidelity Bond that covers all employees.
(The limit required should be adjusted based on the amount of cash or securities
being handled by the Contractor subject to a minimum of $25,000.)
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 59 of 183
12.1 Indemnification Clause
To the fullest extent permitted by law, Contractor shall defend, indemnify, and hold
harmless the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees (hereinafter
referred to as “Indemnitee”) from and against any and all claims, actions, liabilities,
damages, losses, or expenses (including court costs, attorneys’ fees, and costs of
claim processing, investigation and litigation) (hereinafter referred to as “Claims”)
for bodily injury or personal injury (including death), or loss or damage to tangible
or intangible property caused, or alleged to be caused, in whole or in part, by the
negligent or willful acts or omissions of Contractor or any of its owners, officers,
directors, agents, employees or subcontractors. This indemnity includes any claim
or amount arising out of, or recovered under, the Workers’ Compensation Law or
arising out of the failure of such Contractor to conform to any federal, state, or local
law, statute, ordinance, rule, regulation, or court decree. It is the specific intention
of the parties that the Indemnitee shall, in all instances, except for Claims arising
solely from the negligent or willful acts or omissions of the Indemnitee, be
indemnified by Contractor from and against any and all claims. It is agreed that
Contractor will be responsible for primary loss investigation, defense, and
judgment costs where this indemnification is applicable. In consideration of the
award of this contract, the Contractor agrees to waive all rights of subrogation
against the State of Arizona, its officers, officials, agents, and employees for losses
arising from the work performed by the Contractor for the State of Arizona.
This indemnity shall not apply if the contractor or sub-contractor(s) is/are an
agency, board, commission or university of the State of Arizona.
12.2 Insurance Requirements
12.2.1 Contractor and subcontractors shall procure and maintain, until all of their
obligations have been discharged, including any warranty periods under
this Contract, insurance against claims for injury to persons or damage to
property arising from, or in connection with, the performance of the work
hereunder by the Contractor, its agents, representatives, employees or
subcontractors.
12.2.2 The Insurance Requirements herein are minimum requirements for this
Contract and in no way limit the indemnity covenants contained in this
Contract. The State of Arizona in no way warrants that the minimum limits
contained herein are sufficient to protect the Contractor from liabilities that
arise out of the performance of the work under this Contract by the
Contractor, its agents, representatives, employees or subcontractors, and
the Contractor is free to purchase additional insurance.
12.3 Minimum Scope and Limits of Insurance
Contractor shall provide coverage with limits of liability not less than those stated
below.
12.3.1 Commercial General Liability (CGL) – Occurrence Form
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 60 of 183
Policy shall include bodily injury, property damage, and broad form
contractual liability coverage.
• General Aggregate $2,000,000
• Products – Completed Operations Aggregate $1,000,000
• Personal and Advertising Injury $1,000,000
• Damage to Rented Premises $50,000
• Each Occurrence $1,000,000
The policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees as
additional insureds with respect to liability arising out of the activities
performed by or on behalf of the Contractor.
Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work performed
by or on behalf of the Contractor.
The policy shall be endorsed to include Errors and Omissions
coverage.
Policy shall be endorsed to include Master Key coverage (if required as
part of the Scope of Services).
Policy shall be endorsed to include coverage for Broad Form Property
Damage of property of others.
Policy shall include coverage for the Operation of Mobile Equipment
owned or leased by the State of Arizona (if required as part of the Scope
of Services).
The policy shall be endorsed to include coverage for Use of
Reasonable Force to Protect Persons or Property.
12.3.2 Business Automobile Liability
Bodily Injury and Property Damage for any owned, hired, and/or non-
owned automobiles used in the performance of this Contract.
• Combined Single Limit (CSL) $5,000,000
a. Policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees
as additional insureds with respect to liability arising out of the
activities performed by, or on behalf of, the Contractor involving
automobiles owned, hired and/or non-owned by the Contractor.
b. Policy shall contain a waiver of subrogation endorsement as required
by this written agreement in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 61 of 183
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
12.3.3 Workers’ Compensation and Employers' Liability
• Workers' Compensation Statutory
• Employers' Liability
o Each Accident $1,000,000
o Disease – Each Employee $1,000,000
o Disease – Policy Limit $1,000,000
a. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
b. This requirement shall not apply to each Contractor or subcontractor
that is exempt under A.R.S. § 23-901, and when such Contractor or
subcontractor executes the appropriate waiver form (Sole Proprietor
or Independent Contractor).
12.3.4 Commercial Crime Policy or Blanket Fidelity Bond
• Coverage amount is $___________
Coverage should include but is not limited to:
a. Employee Dishonesty (to include coverage for theft and mysterious
disappearance and inventory shortage)
b. Money & Securities Inside/Outside
c. Computer Fraud
d. Funds Transferred (if applicable)
e. Forgery or Alteration
f. The policy shall be endorsed to include the State of Arizona (and the
respective agency) as Loss Payee
g. The policy shall not contain a condition requiring a conviction or arrest
in order to file a claim
h. Coverage shall be extended to 3
rd
parties
12.4 Additional Insurance Requirements
The policies shall include, or be endorsed to include, as required by this written
agreement, the following provisions:
12.4.1 The Contractor's policies, as applicable, shall stipulate that the insurance
afforded the Contractor shall be primary and that any insurance carried by
the Department, its agents, officials, employees or the State of Arizona
shall be excess and not contributory insurance, as provided by A.R.S. §
41-621 (E).
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 62 of 183
12.4.2 Insurance provided by the Contractor shall not limit the Contractor’s liability
assumed under the indemnification provisions of this Contract.
12.5 Notice of Cancellation
Applicable to all insurance policies required within the Insurance Requirements of
this Contract, Contractor’s insurance shall not be permitted to expire, be
suspended, be canceled, or be materially changed for any reason without thirty
(30) days prior written notice to the State of Arizona. Within two (2) business days
of receipt, Contractor must provide notice to the State of Arizona if they receive
notice of a policy that has been or will be suspended, canceled, materially changed
for any reason, has expired, or will be expiring. Such notice shall be sent directly
to the Department and shall be mailed, emailed, hand delivered or sent by
facsimile transmission to (State Representative’s Name, Address & Fax Number).
12.6 Acceptability of Insurers
Contractor’s insurance shall be placed with companies licensed in the State of
Arizona or hold approved non-admitted status on the Arizona Department of
Insurance List of Qualified Unauthorized Insurers. Insurers shall have an “A.M.
Best” rating of not less than A- VII. The State of Arizona in no way warrants that
the above-required minimum insurer rating is sufficient to protect the Contractor
from potential insurer insolvency.
12.7 Verification of Coverage
Contractor shall furnish the State of Arizona with certificates of insurance (valid
ACORD form or equivalent approved by the State of Arizona) evidencing that
Contractor has the insurance as required by this Contract. An authorized
representative of the insurer shall sign the certificates.
12.7.1 All such certificates of insurance and policy endorsements must be
received by the State before work commences. The State’s receipt of any
certificates of insurance or policy endorsements that do not comply with
this written agreement shall not waive or otherwise affect the requirements
of this agreement.
12.7.2 Each insurance policy required by this Contract must be in effect at, or prior
to, commencement of work under this Contract. Failure to maintain the
insurance policies as required by this Contract, or to provide evidence of
renewal, is a material breach of contract.
12.7.3 All certificates required by this Contract shall be sent directly to the
Department. The State of Arizona project/contract number and project
description shall be noted on the certificate of insurance. The State of
Arizona reserves the right to require complete copies of all insurance
policies required by this Contract at any time.
12.8 Subcontractors
Contractor’s certificate(s) shall include all subcontractors as insureds under its
policies or Contractor shall be responsible for ensuring and/or verifying that all
subcontractors have valid and collectable insurance as evidenced by the
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 63 of 183
certificates of insurance and endorsements for each subcontractor. All coverages
for subcontractors shall be subject to the minimum Insurance Requirements
identified above. The Department reserves the right to require, at any time
throughout the life of the Contract, proof from the Contractor that its subcontractors
have the required coverage.
12.9 Approval and Modifications
The Contracting Agency, in consultation with State Risk, reserves the right to
review or make modifications to the insurance limits, required coverages, or
endorsements throughout the life of this contract, as deemed necessary. Such
action will not require a formal Contract amendment but may be made by
administrative action.
12.10 Exceptions
In the event the Contractor or subcontractor(s) is/are a public entity, then the
Insurance Requirements shall not apply. Such public entity shall provide a
certificate of self-insurance. If the Contractor or subcontractor(s) is/are a State of
Arizona agency, board, commission, or university, none of the above shall apply.
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 64 of 183
13. Security Services Contracts - Without Use of an Armored Car
13.1 Indemnification Clause
To the fullest extent permitted by law, Contractor shall defend, indemnify, and hold
harmless the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees (hereinafter
referred to as “Indemnitee”) from and against any and all claims, actions, liabilities,
damages, losses, or expenses (including court costs, attorneys’ fees, and costs of
claim processing, investigation and litigation) (hereinafter referred to as “Claims”)
for bodily injury or personal injury (including death), or loss or damage to tangible
or intangible property caused, or alleged to be caused, in whole or in part, by the
negligent or willful acts or omissions of Contractor or any of its owners, officers,
directors, agents, employees or subcontractors. This indemnity includes any claim
or amount arising out of, or recovered under, the Workers’ Compensation Law or
arising out of the failure of such Contractor to conform to any federal, state, or local
law, statute, ordinance, rule, regulation, or court decree. It is the specific intention
of the parties that the Indemnitee shall, in all instances, except for Claims arising
solely from the negligent or willful acts or omissions of the Indemnitee, be
indemnified by Contractor from and against any and all claims. It is agreed that
Contractor will be responsible for primary loss investigation, defense, and
judgment costs where this indemnification is applicable. In consideration of the
award of this contract, the Contractor agrees to waive all rights of subrogation
against the State of Arizona, its officers, officials, agents, and employees for losses
arising from the work performed by the Contractor for the State of Arizona.
This indemnity shall not apply if the contractor or sub-contractor(s) is/are an
agency, board, commission or university of the State of Arizona.
13.2 Insurance Requirements
13.2.1 Contractor and subcontractors shall procure and maintain, until all of their
obligations have been discharged, including any warranty periods under
this Contract, insurance against claims for injury to persons or damage to
property arising from, or in connection with, the performance of the work
hereunder by the Contractor, its agents, representatives, employees or
subcontractors.
13.2.2 The Insurance Requirements herein are minimum requirements for this
Contract and in no way limit the indemnity covenants contained in this
Contract. The State of Arizona in no way warrants that the minimum limits
contained herein are sufficient to protect the Contractor from liabilities that
arise out of the performance of the work under this Contract by the
Contractor, its agents, representatives, employees or subcontractors, and
the Contractor is free to purchase additional insurance.
13.3 Minimum Scope and Limits of Insurance
Contractor shall provide coverage with limits of liability not less than those stated
below.
13.3.1 Commercial General Liability (CGL) – Occurrence Form
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 65 of 183
Policy shall include bodily injury, property damage, and broad form
contractual liability coverage.
• General Aggregate $2,000,000
• Products – Completed Operations Aggregate $1,000,000
• Personal and Advertising Injury $1,000,000
• Damage to Rented Premises $50,000
• Each Occurrence $1,000,000
The policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees as
additional insureds with respect to liability arising out of the activities
performed by or on behalf of the Contractor.
Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work performed
by or on behalf of the Contractor.
13.3.2 Business Automobile Liability
Bodily Injury and Property Damage for any owned, hired, and/or non-
owned automobiles used in the performance of this Contract.
• Combined Single Limit (CSL) $1,000,000
a. Policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees
as additional insureds with respect to liability arising out of the
activities performed by, or on behalf of, the Contractor involving
automobiles owned, hired and/or non-owned by the Contractor.
b. Policy shall contain a waiver of subrogation endorsement as required
by this written agreement in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
13.3.3 Workers’ Compensation and Employers' Liability
• Workers' Compensation Statutory
• Employers' Liability
o Each Accident $1,000,000
o Disease – Each Employee $1,000,000
o Disease – Policy Limit $1,000,000
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 66 of 183
a. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
b. This requirement shall not apply to each Contractor or subcontractor
that is exempt under A.R.S. § 23-901, and when such Contractor or
subcontractor executes the appropriate waiver form (Sole Proprietor
or Independent Contractor).
13.3.4 Commercial Crime Policy or Blanket Fidelity Bond
• Coverage amount is $___________
Coverage should include but is not limited to:
a. Employee Dishonesty (to include coverage for theft and mysterious
disappearance and inventory shortage)
b. Money & Securities Inside/Outside
c. Computer Fraud
d. Funds Transferred (if applicable)
e. Forgery or Alteration
f. The policy shall be endorsed to include the State of Arizona (and the
respective agency) as Loss Payee
g. The policy shall not contain a condition requiring a conviction or arrest
in order to file a claim
h. Coverage shall be extended to 3
rd
parties
13.4 Additional Insurance Requirements
The policies shall include, or be endorsed to include, as required by this written
agreement, the following provisions:
13.4.1 The Contractor's policies, as applicable, shall stipulate that the insurance
afforded the Contractor shall be primary and that any insurance carried by
the Department, its agents, officials, employees or the State of Arizona
shall be excess and not contributory insurance, as provided by A.R.S. §
41-621 (E).
13.4.2 Insurance provided by the Contractor shall not limit the Contractor’s liability
assumed under the indemnification provisions of this Contract.
13.5 Notice of Cancellation
Applicable to all insurance policies required within the Insurance Requirements of
this Contract, Contractor’s insurance shall not be permitted to expire, be
suspended, be canceled, or be materially changed for any reason without thirty
(30) days prior written notice to the State of Arizona. Within two (2) business days
of receipt, Contractor must provide notice to the State of Arizona if they receive
notice of a policy that has been or will be suspended, canceled, materially changed
for any reason, has expired, or will be expiring. Such notice shall be sent directly
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 67 of 183
to the Department and shall be mailed, emailed, hand delivered or sent by
facsimile transmission to (State Representative’s Name, Address & Fax Number).
13.6 Acceptability of Insurers
Contractor’s insurance shall be placed with companies licensed in the State of
Arizona or hold approved non-admitted status on the Arizona Department of
Insurance List of Qualified Unauthorized Insurers. Insurers shall have an “A.M.
Best” rating of not less than A- VII. The State of Arizona in no way warrants that
the above-required minimum insurer rating is sufficient to protect the Contractor
from potential insurer insolvency.
13.7 Verification of Coverage
Contractor shall furnish the State of Arizona with certificates of insurance (valid
ACORD form or equivalent approved by the State of Arizona) evidencing that
Contractor has the insurance as required by this Contract. An authorized
representative of the insurer shall sign the certificates.
13.7.1 All such certificates of insurance and policy endorsements must be
received by the State before work commences. The State’s receipt of any
certificates of insurance or policy endorsements that do not comply with
this written agreement shall not waive or otherwise affect the requirements
of this agreement.
13.7.2 Each insurance policy required by this Contract must be in effect at, or prior
to, commencement of work under this Contract. Failure to maintain the
insurance policies as required by this Contract, or to provide evidence of
renewal, is a material breach of contract.
13.7.3 All certificates required by this Contract shall be sent directly to the
Department. The State of Arizona project/contract number and project
description shall be noted on the certificate of insurance. The State of
Arizona reserves the right to require complete copies of all insurance
policies required by this Contract at any time.
13.8 Subcontractors
Contractor’s certificate(s) shall include all subcontractors as insureds under its
policies or Contractor shall be responsible for ensuring and/or verifying that all
subcontractors have valid and collectable insurance as evidenced by the
certificates of insurance and endorsements for each subcontractor. All coverages
for subcontractors shall be subject to the minimum Insurance Requirements
identified above. The Department reserves the right to require, at any time
throughout the life of the Contract, proof from the Contractor that its subcontractors
have the required coverage.
13.9 Approval and Modifications
The Contracting Agency, in consultation with State Risk, reserves the right to
review or make modifications to the insurance limits, required coverages, or
endorsements throughout the life of this contract, as deemed necessary. Such
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 68 of 183
action will not require a formal Contract amendment but may be made by
administrative action.
13.10 Exceptions
In the event the Contractor or subcontractor(s) is/are a public entity, then the
Insurance Requirements shall not apply. Such public entity shall provide a
certificate of self-insurance. If the Contractor or subcontractor(s) is/are a State of
Arizona agency, board, commission, or university, none of the above shall apply.
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 69 of 183
14. Service Contracts - Handling Money
In addition to the standard insurance requirements of General Liability, Automobile
Liability, and Workers' Compensation insurance, additional insurance coverages may be
required to address specific exposures not otherwise covered.
In contracts in which the Contractor or employees of the Contractor handle money on
behalf of the State of Arizona, a commercial crime policy or blanket fidelity bond should
be required that includes third party fidelity coverage.
The commercial crime policy or blanket fidelity bond shall provide coverage for all officers,
directors, employees and agents of the Contractor who are responsible for receiving,
depositing, or transferring funds into program accounts, or issuing financial documents,
checks or other instruments of payment for program costs. Generally, companies having
more than just a few employees will need to purchase a commercial crime policy or blanket
fidelity bond that covers all employees.
In contracts in which the Contractor or employees of the Contractor handle money on
behalf of the State of Arizona, a Commercial Crime Policy or Blanket Fidelity Bond should
be required that includes third party fidelity coverage. The Commercial Crime Policy or
Blanket Fidelity Bond shall provide coverage for all officers, directors, employees, and
agents of the Contractor who are responsible for receiving, depositing, or transferring
funds into program accounts, or issuing financial documents, checks or other instruments
of payment for program costs. Generally, companies having more than just a few
employees will need to purchase a Commercial Crime Policy or a Blanket Fidelity Bond
that covers all employees. If the amount of funds being held is unknown, it is permissible
to change the limit requirement to “100% of the value of funds held.” Calculate based on
the maximum period in which the funds are held – up to 1 year.
(The limit required shall be adjusted based on the amount of cash or securities
being handled by the Contractor subject to a minimum of $25,000.)
14.1 Indemnification Clause
To the fullest extent permitted by law, Contractor shall defend, indemnify, and hold
harmless the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees (hereinafter
referred to as “Indemnitee”) from and against any and all claims, actions, liabilities,
damages, losses, or expenses (including court costs, attorneys’ fees, and costs of
claim processing, investigation and litigation) (hereinafter referred to as “Claims”)
for bodily injury or personal injury (including death), or loss or damage to tangible
or intangible property caused, or alleged to be caused, in whole or in part, by the
negligent or willful acts or omissions of Contractor or any of its owners, officers,
directors, agents, employees or subcontractors. This indemnity includes any claim
or amount arising out of, or recovered under, the Workers’ Compensation Law or
arising out of the failure of such Contractor to conform to any federal, state, or local
law, statute, ordinance, rule, regulation, or court decree. It is the specific intention
of the parties that the Indemnitee shall, in all instances, except for Claims arising
solely from the negligent or willful acts or omissions of the Indemnitee, be
indemnified by Contractor from and against any and all claims. It is agreed that
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Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 70 of 183
Contractor will be responsible for primary loss investigation, defense, and
judgment costs where this indemnification is applicable. In consideration of the
award of this contract, the Contractor agrees to waive all rights of subrogation
against the State of Arizona, its officers, officials, agents, and employees for losses
arising from the work performed by the Contractor for the State of Arizona.
This indemnity shall not apply if the contractor or sub-contractor(s) is/are an
agency, board, commission or university of the State of Arizona.
14.2 Insurance Requirements
14.2.1 Contractor and subcontractors shall procure and maintain, until all of their
obligations have been discharged, including any warranty periods under
this Contract, insurance against claims for injury to persons or damage to
property arising from, or in connection with, the performance of the work
hereunder by the Contractor, its agents, representatives, employees or
subcontractors.
14.2.2 The Insurance Requirements herein are minimum requirements for this
Contract and in no way limit the indemnity covenants contained in this
Contract. The State of Arizona in no way warrants that the minimum limits
contained herein are sufficient to protect the Contractor from liabilities that
arise out of the performance of the work under this Contract by the
Contractor, its agents, representatives, employees or subcontractors, and
the Contractor is free to purchase additional insurance.
14.3 Minimum Scope and Limits of Insurance
Contractor shall provide coverage with limits of liability not less than those stated
below.
14.3.1 Commercial General Liability (CGL) – Occurrence Form
Policy shall include bodily injury, property damage, and broad form
contractual liability coverage.
• General Aggregate $2,000,000
• Products – Completed Operations Aggregate $1,000,000
• Personal and Advertising Injury $1,000,000
• Damage to Rented Premises $50,000
• Each Occurrence $1,000,000
The policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees as
additional insureds with respect to liability arising out of the activities
performed by or on behalf of the Contractor.
Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
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Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 71 of 183
officials, agents, and employees for losses arising from work performed
by or on behalf of the Contractor.
14.3.2 Business Automobile Liability
Bodily Injury and Property Damage for any owned, hired, and/or non-
owned automobiles used in the performance of this Contract.
• Combined Single Limit (CSL) $1,000,000
a. Policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees
as additional insureds with respect to liability arising out of the
activities performed by, or on behalf of, the Contractor involving
automobiles owned, hired and/or non-owned by the Contractor.
b. Policy shall contain a waiver of subrogation endorsement as required
by this written agreement in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
14.3.3 Workers’ Compensation and Employers' Liability
• Workers' Compensation Statutory
• Employers' Liability
o Each Accident $1,000,000
o Disease – Each Employee $1,000,000
o Disease – Policy Limit $1,000,000
a. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
b. This requirement shall not apply to each Contractor or subcontractor
that is exempt under A.R.S. § 23-901, and when such Contractor or
subcontractor executes the appropriate waiver form (Sole Proprietor
or Independent Contractor).
14.3.4 Commercial Crime Policy or Blanket Fidelity Bond
• Coverage amount is $___________
Coverage should include but is not limited to:
a. Employee Dishonesty (to include coverage for theft and mysterious
disappearance and inventory shortage)
b. Money & Securities Inside/Outside
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 72 of 183
c. Computer Fraud
d. Funds Transferred (if applicable)
e. Forgery or Alteration
f. The policy shall be endorsed to include the State of Arizona (and the
respective agency) as Loss Payee
g. The policy shall not contain a condition requiring a conviction or arrest
in order to file a claim
h. Coverage shall be extended to 3
rd
parties
14.4 Additional Insurance Requirements
The policies shall include, or be endorsed to include, as required by this written
agreement, the following provisions:
14.4.1 The Contractor's policies, as applicable, shall stipulate that the insurance
afforded the Contractor shall be primary and that any insurance carried by
the Department, its agents, officials, employees or the State of Arizona
shall be excess and not contributory insurance, as provided by A.R.S. §
41-621 (E).
14.4.2 Insurance provided by the Contractor shall not limit the Contractor’s liability
assumed under the indemnification provisions of this Contract.
14.5 Notice of Cancellation
Applicable to all insurance policies required within the Insurance Requirements of
this Contract, Contractor’s insurance shall not be permitted to expire, be
suspended, be canceled, or be materially changed for any reason without thirty
(30) days prior written notice to the State of Arizona. Within two (2) business days
of receipt, Contractor must provide notice to the State of Arizona if they receive
notice of a policy that has been or will be suspended, canceled, materially changed
for any reason, has expired, or will be expiring. Such notice shall be sent directly
to the Department and shall be mailed, emailed, hand delivered or sent by
facsimile transmission to (State Representative’s Name, Address & Fax Number).
14.6 Acceptability of Insurers
Contractor’s insurance shall be placed with companies licensed in the State of
Arizona or hold approved non-admitted status on the Arizona Department of
Insurance List of Qualified Unauthorized Insurers. Insurers shall have an “A.M.
Best” rating of not less than A- VII. The State of Arizona in no way warrants that
the above-required minimum insurer rating is sufficient to protect the Contractor
from potential insurer insolvency.
14.7 Verification of Coverage
Contractor shall furnish the State of Arizona with certificates of insurance (valid
ACORD form or equivalent approved by the State of Arizona) evidencing that
Contractor has the insurance as required by this Contract. An authorized
representative of the insurer shall sign the certificates.
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Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 73 of 183
14.7.1 All such certificates of insurance and policy endorsements must be
received by the State before work commences. The State’s receipt of any
certificates of insurance or policy endorsements that do not comply with
this written agreement shall not waive or otherwise affect the requirements
of this agreement.
14.7.2 Each insurance policy required by this Contract must be in effect at, or prior
to, commencement of work under this Contract. Failure to maintain the
insurance policies as required by this Contract, or to provide evidence of
renewal, is a material breach of contract.
14.7.3 All certificates required by this Contract shall be sent directly to the
Department. The State of Arizona project/contract number and project
description shall be noted on the certificate of insurance. The State of
Arizona reserves the right to require complete copies of all insurance
policies required by this Contract at any time.
14.8 Subcontractors
Contractor’s certificate(s) shall include all subcontractors as insureds under its
policies or Contractor shall be responsible for ensuring and/or verifying that all
subcontractors have valid and collectable insurance as evidenced by the
certificates of insurance and endorsements for each subcontractor. All coverages
for subcontractors shall be subject to the minimum Insurance Requirements
identified above. The Department reserves the right to require, at any time
throughout the life of the Contract, proof from the Contractor that its subcontractors
have the required coverage.
14.9 Approval and Modifications
The Contracting Agency, in consultation with State Risk, reserves the right to
review or make modifications to the insurance limits, required coverages, or
endorsements throughout the life of this contract, as deemed necessary. Such
action will not require a formal Contract amendment but may be made by
administrative action.
14.10 Exceptions
In the event the Contractor or subcontractor(s) is/are a public entity, then the
Insurance Requirements shall not apply. Such public entity shall provide a
certificate of self-insurance. If the Contractor or subcontractor(s) is/are a State of
Arizona agency, board, commission, or university, none of the above shall apply.
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 74 of 183
15. Service Contracts - Handling Money ($50,000 or under)
In addition to the standard insurance requirements of General Liability, Automobile
Liability, and Workers' Compensation insurance, additional insurance coverages may be
required to address specific exposures not otherwise covered.
In contracts in which the Contractor or employees of the Contractor handle money on
behalf of the State of Arizona, a commercial crime policy or blanket fidelity bond should
be required that includes third party fidelity coverage.
The commercial crime policy or blanket fidelity bond shall provide coverage for all officers,
directors, employees and agents of the Contractor who are responsible for receiving,
depositing, or transferring funds into program accounts, or issuing financial documents,
checks or other instruments of payment for program costs. Generally, companies having
more than just a few employees will need to purchase a commercial crime policy or blanket
fidelity bond that covers all employees.
In contracts in which the Contractor or employees of the Contractor handle money on
behalf of the State of Arizona, a Commercial Crime Policy or Blanket Fidelity Bond should
be required that includes third party fidelity coverage. The Commercial Crime Policy or
Blanket Fidelity Bond shall provide coverage for all officers, directors, employees, and
agents of the Contractor who are responsible for receiving, depositing, or transferring
funds into program accounts, or issuing financial documents, checks or other instruments
of payment for program costs. Generally, companies having more than just a few
employees will need to purchase a Commercial Crime Policy or a Blanket Fidelity Bond
that covers all employees.
(The limit required shall be adjusted based on the amount of cash or securities
being handled by the Contractor subject to a minimum of $25,000.)
15.1 Indemnification Clause
To the fullest extent permitted by law, Contractor shall defend, indemnify, and hold
harmless the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees (hereinafter
referred to as “Indemnitee”) from and against any and all claims, actions, liabilities,
damages, losses, or expenses (including court costs, attorneys’ fees, and costs of
claim processing, investigation and litigation) (hereinafter referred to as “Claims”)
for bodily injury or personal injury (including death), or loss or damage to tangible
or intangible property caused, or alleged to be caused, in whole or in part, by the
negligent or willful acts or omissions of Contractor or any of its owners, officers,
directors, agents, employees or subcontractors. This indemnity includes any claim
or amount arising out of, or recovered under, the Workers’ Compensation Law or
arising out of the failure of such Contractor to conform to any federal, state, or local
law, statute, ordinance, rule, regulation, or court decree. It is the specific intention
of the parties that the Indemnitee shall, in all instances, except for Claims arising
solely from the negligent or willful acts or omissions of the Indemnitee, be
indemnified by Contractor from and against any and all claims. It is agreed that
Contractor will be responsible for primary loss investigation, defense, and
judgment costs where this indemnification is applicable. In consideration of the
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 75 of 183
award of this contract, the Contractor agrees to waive all rights of subrogation
against the State of Arizona, its officers, officials, agents, and employees for losses
arising from the work performed by the Contractor for the State of Arizona.
This indemnity shall not apply if the contractor or sub-contractor(s) is/are an
agency, board, commission or university of the State of Arizona.
15.2 Insurance Requirements
15.2.1 Contractor and subcontractors shall procure and maintain, until all of their
obligations have been discharged, including any warranty periods under
this Contract, insurance against claims for injury to persons or damage to
property arising from, or in connection with, the performance of the work
hereunder by the Contractor, its agents, representatives, employees or
subcontractors.
15.2.2 The Insurance Requirements herein are minimum requirements for this
Contract and in no way limit the indemnity covenants contained in this
Contract. The State of Arizona in no way warrants that the minimum limits
contained herein are sufficient to protect the Contractor from liabilities that
arise out of the performance of the work under this Contract by the
Contractor, its agents, representatives, employees or subcontractors, and
the Contractor is free to purchase additional insurance.
15.3 Minimum Scope and Limits of Insurance
Contractor shall provide coverage with limits of liability not less than those stated
below.
15.3.1 Commercial General Liability (CGL) – Occurrence Form
Policy shall include bodily injury, property damage, and broad form
contractual liability coverage.
• General Aggregate $1,000,000
• Products – Completed Operations Aggregate $500,000
• Personal and Advertising Injury $500,000
• Damage to Rented Premises $25,000
• Each Occurrence $500,000
The policy shall be endorsed, as required by this written agreement,
to include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees
as additional insureds with respect to liability arising out of the
activities performed by or on behalf of the Contractor.
Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 76 of 183
15.3.2 Business Automobile Liability
Bodily Injury and Property Damage for any owned, hired, and/or non-
owned automobiles used in the performance of this Contract.
• Combined Single Limit (CSL) $500,000
a. Policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees
as additional insureds with respect to liability arising out of the
activities performed by, or on behalf of, the Contractor involving
automobiles owned, hired and/or non-owned by the Contractor.
b. Policy shall contain a waiver of subrogation endorsement as required
by this written agreement in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
15.3.3 Workers’ Compensation and Employers' Liability
• Workers' Compensation Statutory
• Employers' Liability
o Each Accident $500,000
o Disease – Each Employee $500,000
o Disease – Policy Limit $500,000
a. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
b. This requirement shall not apply to each Contractor or subcontractor
that is exempt under A.R.S. § 23-901, and when such Contractor or
subcontractor executes the appropriate waiver form (Sole Proprietor
or Independent Contractor).
15.3.4 Commercial Crime Policy or Blanket Fidelity Bond
• Coverage amount is $___________
Coverage should include but is not limited to:
a. Employee Dishonesty (to include coverage for theft and mysterious
disappearance and inventory shortage)
b. Money & Securities Inside/Outside
c. Computer Fraud
d. Funds Transferred (if applicable)
e. Forgery or Alteration
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Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 77 of 183
f. The policy shall be endorsed to include the State of Arizona (and the
respective agency) as Loss Payee
g. The policy shall not contain a condition requiring a conviction or arrest
in order to file a claim
h. Coverage shall be extended to 3
rd
parties
15.4 Additional Insurance Requirements
The policies shall include, or be endorsed to include, as required by this written
agreement, the following provisions:
15.4.1 The Contractor's policies, as applicable, shall stipulate that the insurance
afforded the Contractor shall be primary and that any insurance carried by
the Department, its agents, officials, employees or the State of Arizona
shall be excess and not contributory insurance, as provided by A.R.S. §
41-621 (E).
15.4.2 Insurance provided by the Contractor shall not limit the Contractor’s liability
assumed under the indemnification provisions of this Contract.
15.5 Notice of Cancellation
Applicable to all insurance policies required within the Insurance Requirements of
this Contract, Contractor’s insurance shall not be permitted to expire, be
suspended, be canceled, or be materially changed for any reason without thirty
(30) days prior written notice to the State of Arizona. Within two (2) business days
of receipt, Contractor must provide notice to the State of Arizona if they receive
notice of a policy that has been or will be suspended, canceled, materially changed
for any reason, has expired, or will be expiring. Such notice shall be sent directly
to the Department and shall be mailed, emailed, hand delivered or sent by
facsimile transmission to (State Representative’s Name, Address & Fax Number).
15.6 Acceptability of Insurers
Contractor’s insurance shall be placed with companies licensed in the State of
Arizona or hold approved non-admitted status on the Arizona Department of
Insurance List of Qualified Unauthorized Insurers. Insurers shall have an “A.M.
Best” rating of not less than A- VII. The State of Arizona in no way warrants that
the above-required minimum insurer rating is sufficient to protect the Contractor
from potential insurer insolvency.
15.7 Verification of Coverage
Contractor shall furnish the State of Arizona with certificates of insurance (valid
ACORD form or equivalent approved by the State of Arizona) evidencing that
Contractor has the insurance as required by this Contract. An authorized
representative of the insurer shall sign the certificates.
15.7.1 All such certificates of insurance and policy endorsements must be
received by the State before work commences. The State’s receipt of any
certificates of insurance or policy endorsements that do not comply with
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 78 of 183
this written agreement shall not waive or otherwise affect the requirements
of this agreement.
15.7.2 Each insurance policy required by this Contract must be in effect at, or prior
to, commencement of work under this Contract. Failure to maintain the
insurance policies as required by this Contract, or to provide evidence of
renewal, is a material breach of contract.
15.7.3 All certificates required by this Contract shall be sent directly to the
Department. The State of Arizona project/contract number and project
description shall be noted on the certificate of insurance. The State of
Arizona reserves the right to require complete copies of all insurance
policies required by this Contract at any time.
15.8 Subcontractors
Contractor’s certificate(s) shall include all subcontractors as insureds under its
policies or Contractor shall be responsible for ensuring and/or verifying that all
subcontractors have valid and collectable insurance as evidenced by the
certificates of insurance and endorsements for each subcontractor. All coverages
for subcontractors shall be subject to the minimum Insurance Requirements
identified above. The Department reserves the right to require, at any time
throughout the life of the Contract, proof from the Contractor that its subcontractors
have the required coverage.
15.9 Approval and Modifications
The Contracting Agency, in consultation with State Risk, reserves the right to
review or make modifications to the insurance limits, required coverages, or
endorsements throughout the life of this contract, as deemed necessary. Such
action will not require a formal Contract amendment but may be made by
administrative action.
15.10 Exceptions
In the event the Contractor or subcontractor(s) is/are a public entity, then the
Insurance Requirements shall not apply. Such public entity shall provide a
certificate of self-insurance. If the Contractor or subcontractor(s) is/are a State of
Arizona agency, board, commission, or university, none of the above shall apply.
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 79 of 183
16. Purchase and Installation of Equipment
In contracts where the State of Arizona is purchasing highly valued equipment or
machinery (i.e. compressors, air conditioning units, generators, etc.) the scope of services
will generally include the installation of the equipment. The contract has now become more
than just a standard commodity purchase agreement and falls under the category of a
'service contract.'
In addition to the standard general liability, automobile liability and workers' compensation
insurance requirements contained in most service agreements, purchase and installation
of equipment contracts should also require the vendor to carry an "installation floater."
Installation floaters are similar to builders' risk policies and are used by contractors
performing a specialized job on an existing building, or installing equipment or materials
that are not included in a construction project contract.
(The limit required shall be based on an amount equal to the initial contract amount plus
additional coverage equal to contract amount for all subsequent change orders.)
16.1 Indemnification Clause
To the fullest extent permitted by law, Contractor shall defend, indemnify, and hold
harmless the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees (hereinafter
referred to as “Indemnitee”) from and against any and all claims, actions, liabilities,
damages, losses, or expenses (including court costs, attorneys’ fees, and costs of
claim processing, investigation and litigation) (hereinafter referred to as “Claims”)
for bodily injury or personal injury (including death), or loss or damage to tangible
or intangible property caused, or alleged to be caused, in whole or in part, by the
negligent or willful acts or omissions of Contractor or any of its owners, officers,
directors, agents, employees or subcontractors. This indemnity includes any claim
or amount arising out of, or recovered under, the Workers’ Compensation Law or
arising out of the failure of such Contractor to conform to any federal, state, or local
law, statute, ordinance, rule, regulation, or court decree. It is the specific intention
of the parties that the Indemnitee shall, in all instances, except for Claims arising
solely from the negligent or willful acts or omissions of the Indemnitee, be
indemnified by Contractor from and against any and all claims. It is agreed that
Contractor will be responsible for primary loss investigation, defense, and
judgment costs where this indemnification is applicable. In consideration of the
award of this contract, the Contractor agrees to waive all rights of subrogation
against the State of Arizona, its officers, officials, agents, and employees for losses
arising from the work performed by the Contractor for the State of Arizona.
This indemnity shall not apply if the contractor or sub-contractor(s) is/are an
agency, board, commission or university of the State of Arizona.
16.2 Insurance Requirements
16.2.1 Contractor and subcontractors shall procure and maintain, until all of their
obligations have been discharged, including any warranty periods under
this Contract, insurance against claims for injury to persons or damage to
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 80 of 183
property arising from, or in connection with, the performance of the work
hereunder by the Contractor, its agents, representatives, employees or
subcontractors.
16.2.2 The Insurance Requirements herein are minimum requirements for this
Contract and in no way limit the indemnity covenants contained in this
Contract. The State of Arizona in no way warrants that the minimum limits
contained herein are sufficient to protect the Contractor from liabilities that
arise out of the performance of the work under this Contract by the
Contractor, its agents, representatives, employees or subcontractors, and
the Contractor is free to purchase additional insurance.
16.3 Minimum Scope and Limits of Insurance
Contractor shall provide coverage with limits of liability not less than those stated
below.
16.3.1 Commercial General Liability (CGL) – Occurrence Form
Policy shall include bodily injury, property damage, and broad form
contractual liability coverage.
• General Aggregate $2,000,000
• Products – Completed Operations Aggregate $1,000,000
• Personal and Advertising Injury $1,000,000
• Damage to Rented Premises $50,000
• Each Occurrence $1,000,000
The policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees as
additional insureds with respect to liability arising out of the activities
performed by or on behalf of the Contractor.
Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work performed
by or on behalf of the Contractor.
16.3.2 Business Automobile Liability
Bodily Injury and Property Damage for any owned, hired, and/or non-
owned automobiles used in the performance of this Contract.
• Combined Single Limit (CSL) $1,000,000
a. Policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees
as additional insureds with respect to liability arising out of the
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 81 of 183
activities performed by, or on behalf of, the Contractor involving
automobiles owned, hired and/or non-owned by the Contractor.
b. Policy shall contain a waiver of subrogation endorsement as required
by this written agreement in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
16.3.3 Workers’ Compensation and Employers' Liability
• Workers' Compensation Statutory
• Employers' Liability
o Each Accident $1,000,000
o Disease – Each Employee $1,000,000
o Disease – Policy Limit $1,000,000
a. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
b. This requirement shall not apply to each Contractor or subcontractor
that is exempt under A.R.S. § 23-901, and when such Contractor or
subcontractor executes the appropriate waiver form (Sole Proprietor
or Independent Contractor).
16.3.4 Installation Floater
• Coverage amount is $__________
a. Policy shall contain an Additional Insured endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees.
b. The State of Arizona and the Department shall be named as loss
payee as its interest may appear.
c. Coverage shall be written on an all risk, replacement cost basis and
shall include coverage for flood and earth movement as well as
coverage for losses that may occur during equipment
testing/commissioning.
d. Policy shall be maintained until whichever of the following shall first
occur: (1) final payment has been made; or, (2) until no person or
entity, other than the State of Arizona, has an insurable interest in the
property required to be covered.
e. Policy shall be endorsed such that the insurance shall not be canceled
or lapse because of any partial use or occupancy by the State of
Arizona.
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 82 of 183
f. The Installation Floater must provide coverage from the time the
equipment/material becomes the responsibility of the Contractor and
shall continue without interruption during the installation, testing and
commissioning, including any time during which the
equipment/material is being transported to the installation site, or
awaiting installation, whether on or off site.
g. Policy shall contain a Waiver of Subrogation endorsement, as required
by written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by the Contractor for the State of Arizona.
h. Contractor is responsible for the payment of all deductibles under the
Installation Floater.
16.4 Additional Insurance Requirements
The policies shall include, or be endorsed to include, as required by this written
agreement, the following provisions:
16.4.1 The Contractor's policies, as applicable, shall stipulate that the insurance
afforded the Contractor shall be primary and that any insurance carried by
the Department, its agents, officials, employees or the State of Arizona
shall be excess and not contributory insurance, as provided by A.R.S. §
41-621 (E).
16.4.2 Insurance provided by the Contractor shall not limit the Contractor’s liability
assumed under the indemnification provisions of this Contract.
16.5 Notice of Cancellation
Applicable to all insurance policies required within the Insurance Requirements of
this Contract, Contractor’s insurance shall not be permitted to expire, be
suspended, be canceled, or be materially changed for any reason without thirty
(30) days prior written notice to the State of Arizona. Within two (2) business days
of receipt, Contractor must provide notice to the State of Arizona if they receive
notice of a policy that has been or will be suspended, canceled, materially changed
for any reason, has expired, or will be expiring. Such notice shall be sent directly
to the Department and shall be mailed, emailed, hand delivered or sent by
facsimile transmission to (State Representative’s Name, Address & Fax Number).
16.6 Acceptability of Insurers
Contractor’s insurance shall be placed with companies licensed in the State of
Arizona or hold approved non-admitted status on the Arizona Department of
Insurance List of Qualified Unauthorized Insurers. Insurers shall have an “A.M.
Best” rating of not less than A- VII. The State of Arizona in no way warrants that
the above-required minimum insurer rating is sufficient to protect the Contractor
from potential insurer insolvency.
16.7 Verification of Coverage
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 83 of 183
Contractor shall furnish the State of Arizona with certificates of insurance (valid
ACORD form or equivalent approved by the State of Arizona) evidencing that
Contractor has the insurance as required by this Contract. An authorized
representative of the insurer shall sign the certificates.
16.7.1 All such certificates of insurance and policy endorsements must be
received by the State before work commences. The State’s receipt of any
certificates of insurance or policy endorsements that do not comply with
this written agreement shall not waive or otherwise affect the requirements
of this agreement.
16.7.2 Each insurance policy required by this Contract must be in effect at, or prior
to, commencement of work under this Contract. Failure to maintain the
insurance policies as required by this Contract, or to provide evidence of
renewal, is a material breach of contract.
16.7.3 All certificates required by this Contract shall be sent directly to the
Department. The State of Arizona project/contract number and project
description shall be noted on the certificate of insurance. The State of
Arizona reserves the right to require complete copies of all insurance
policies required by this Contract at any time.
16.8 Subcontractors
Contractor’s certificate(s) shall include all subcontractors as insureds under its
policies or Contractor shall be responsible for ensuring and/or verifying that all
subcontractors have valid and collectable insurance as evidenced by the
certificates of insurance and endorsements for each subcontractor. All coverages
for subcontractors shall be subject to the minimum Insurance Requirements
identified above. The Department reserves the right to require, at any time
throughout the life of the Contract, proof from the Contractor that its subcontractors
have the required coverage.
16.9 Approval and Modifications
The Contracting Agency, in consultation with State Risk, reserves the right to
review or make modifications to the insurance limits, required coverages, or
endorsements throughout the life of this contract, as deemed necessary. Such
action will not require a formal Contract amendment but may be made by
administrative action.
16.10 Exceptions
In the event the Contractor or subcontractor(s) is/are a public entity, then the
Insurance Requirements shall not apply. Such public entity shall provide a
certificate of self-insurance. If the Contractor or subcontractor(s) is/are a State of
Arizona agency, board, commission, or university, none of the above shall apply.
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 84 of 183
17. Purchase and Installation of Equipment ($50,000 or under)
In contracts where the State of Arizona is purchasing highly valued equipment or
machinery (i.e. compressors, air conditioning units, generators, etc.) the scope of services
will generally include the installation of the equipment. The contract has now become more
than just a standard commodity purchase agreement and falls under the category of a
'service contract.'
In addition to the standard general liability, automobile liability and workers' compensation
insurance requirements contained in most service agreements, purchase and installation
of equipment contracts should also require the vendor to carry an "installation floater."
Installation floaters are similar to builders' risk policies and are used by contractors
performing a specialized job on an existing building, or installing equipment or materials
that are not included in a construction project contract.
(The limit required shall be based on an amount equal to the initial contract amount plus
additional coverage equal to contract amount for all subsequent change orders.)
17.1 Indemnification Clause
To the fullest extent permitted by law, Contractor shall defend, indemnify, and hold
harmless the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees (hereinafter
referred to as “Indemnitee”) from and against any and all claims, actions, liabilities,
damages, losses, or expenses (including court costs, attorneys’ fees, and costs of
claim processing, investigation and litigation) (hereinafter referred to as “Claims”)
for bodily injury or personal injury (including death), or loss or damage to tangible
or intangible property caused, or alleged to be caused, in whole or in part, by the
negligent or willful acts or omissions of Contractor or any of its owners, officers,
directors, agents, employees or subcontractors. This indemnity includes any claim
or amount arising out of, or recovered under, the Workers’ Compensation Law or
arising out of the failure of such Contractor to conform to any federal, state, or local
law, statute, ordinance, rule, regulation, or court decree. It is the specific intention
of the parties that the Indemnitee shall, in all instances, except for Claims arising
solely from the negligent or willful acts or omissions of the Indemnitee, be
indemnified by Contractor from and against any and all claims. It is agreed that
Contractor will be responsible for primary loss investigation, defense, and
judgment costs where this indemnification is applicable. In consideration of the
award of this contract, the Contractor agrees to waive all rights of subrogation
against the State of Arizona, its officers, officials, agents, and employees for losses
arising from the work performed by the Contractor for the State of Arizona.
This indemnity shall not apply if the contractor or sub-contractor(s) is/are an
agency, board, commission or university of the State of Arizona.
17.2 Insurance Requirements
17.2.1 Contractor and subcontractors shall procure and maintain, until all of their
obligations have been discharged, including any warranty periods under
this Contract, insurance against claims for injury to persons or damage to
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 85 of 183
property arising from, or in connection with, the performance of the work
hereunder by the Contractor, its agents, representatives, employees or
subcontractors.
17.2.2 The Insurance Requirements herein are minimum requirements for this
Contract and in no way limit the indemnity covenants contained in this
Contract. The State of Arizona in no way warrants that the minimum limits
contained herein are sufficient to protect the Contractor from liabilities that
arise out of the performance of the work under this Contract by the
Contractor, its agents, representatives, employees or subcontractors, and
the Contractor is free to purchase additional insurance.
17.3 Minimum Scope and Limits of Insurance
Contractor shall provide coverage with limits of liability not less than those stated
below.
17.3.1 Commercial General Liability (CGL) – Occurrence Form
Policy shall include bodily injury, property damage, and broad form
contractual liability coverage.
• General Aggregate $1,000,000
• Products – Completed Operations Aggregate $500,000
• Personal and Advertising Injury $500,000
• Damage to Rented Premises $25,000
• Each Occurrence $500,000
The policy shall be endorsed, as required by this written agreement,
to include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees
as additional insureds with respect to liability arising out of the
activities performed by or on behalf of the Contractor.
Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
17.3.2 Business Automobile Liability
Bodily Injury and Property Damage for any owned, hired, and/or non-
owned automobiles used in the performance of this Contract.
• Combined Single Limit (CSL) $500,000
a. Policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees
as additional insureds with respect to liability arising out of the
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 86 of 183
activities performed by, or on behalf of, the Contractor involving
automobiles owned, hired and/or non-owned by the Contractor.
b. Policy shall contain a waiver of subrogation endorsement as required
by this written agreement in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
17.3.3 Workers’ Compensation and Employers' Liability
• Workers' Compensation Statutory
• Employers' Liability
o Each Accident $500,000
o Disease – Each Employee $500,000
o Disease – Policy Limit $500,000
a. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
b. This requirement shall not apply to each Contractor or subcontractor
that is exempt under A.R.S. § 23-901, and when such Contractor or
subcontractor executes the appropriate waiver form (Sole Proprietor
or Independent Contractor).
17.3.4 Installation Floater
• Coverage amount is $__________
a. Policy shall contain an Additional Insured endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees.
b. The State of Arizona and the Department shall be named as loss
payee as its interest may appear.
c. Coverage shall be written on an all risk, replacement cost basis and
shall include coverage for flood and earth movement as well as
coverage for losses that may occur during equipment
testing/commissioning.
d. Policy shall be maintained until whichever of the following shall first
occur: (1) final payment has been made; or, (2) until no person or
entity, other than the State of Arizona, has an insurable interest in the
property required to be covered.
e. Policy shall be endorsed such that the insurance shall not be canceled
or lapse because of any partial use or occupancy by the State of
Arizona.
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 87 of 183
f. The Installation Floater must provide coverage from the time the
equipment/material becomes the responsibility of the Contractor and
shall continue without interruption during the installation, testing and
commissioning, including any time during which the
equipment/material is being transported to the installation site, or
awaiting installation, whether on or off site.
g. Policy shall contain a Waiver of Subrogation endorsement, as required
by written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by the Contractor for the State of Arizona.
h. Contractor is responsible for the payment of all deductibles under the
Installation Floater.
17.4 Additional Insurance Requirements
The policies shall include, or be endorsed to include, as required by this written
agreement, the following provisions:
17.4.1 The Contractor's policies, as applicable, shall stipulate that the insurance
afforded the Contractor shall be primary and that any insurance carried by
the Department, its agents, officials, employees or the State of Arizona
shall be excess and not contributory insurance, as provided by A.R.S. §
41-621 (E).
17.4.2 Insurance provided by the Contractor shall not limit the Contractor’s liability
assumed under the indemnification provisions of this Contract.
17.5 Notice of Cancellation
Applicable to all insurance policies required within the Insurance Requirements of
this Contract, Contractor’s insurance shall not be permitted to expire, be
suspended, be canceled, or be materially changed for any reason without thirty
(30) days prior written notice to the State of Arizona. Within two (2) business days
of receipt, Contractor must provide notice to the State of Arizona if they receive
notice of a policy that has been or will be suspended, canceled, materially changed
for any reason, has expired, or will be expiring. Such notice shall be sent directly
to the Department and shall be mailed, emailed, hand delivered or sent by
facsimile transmission to (State Representative’s Name, Address & Fax Number).
17.6 Acceptability of Insurers
Contractor’s insurance shall be placed with companies licensed in the State of
Arizona or hold approved non-admitted status on the Arizona Department of
Insurance List of Qualified Unauthorized Insurers. Insurers shall have an “A.M.
Best” rating of not less than A- VII. The State of Arizona in no way warrants that
the above-required minimum insurer rating is sufficient to protect the Contractor
from potential insurer insolvency.
17.7 Verification of Coverage
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 88 of 183
Contractor shall furnish the State of Arizona with certificates of insurance (valid
ACORD form or equivalent approved by the State of Arizona) evidencing that
Contractor has the insurance as required by this Contract. An authorized
representative of the insurer shall sign the certificates.
17.7.1 All such certificates of insurance and policy endorsements must be
received by the State before work commences. The State’s receipt of any
certificates of insurance or policy endorsements that do not comply with
this written agreement shall not waive or otherwise affect the requirements
of this agreement.
17.7.2 Each insurance policy required by this Contract must be in effect at, or prior
to, commencement of work under this Contract. Failure to maintain the
insurance policies as required by this Contract, or to provide evidence of
renewal, is a material breach of contract.
17.7.3 All certificates required by this Contract shall be sent directly to the
Department. The State of Arizona project/contract number and project
description shall be noted on the certificate of insurance. The State of
Arizona reserves the right to require complete copies of all insurance
policies required by this Contract at any time.
17.8 Subcontractors
Contractor’s certificate(s) shall include all subcontractors as insureds under its
policies or Contractor shall be responsible for ensuring and/or verifying that all
subcontractors have valid and collectable insurance as evidenced by the
certificates of insurance and endorsements for each subcontractor. All coverages
for subcontractors shall be subject to the minimum Insurance Requirements
identified above. The Department reserves the right to require, at any time
throughout the life of the Contract, proof from the Contractor that its subcontractors
have the required coverage.
17.9 Approval and Modifications
The Contracting Agency, in consultation with State Risk, reserves the right to
review or make modifications to the insurance limits, required coverages, or
endorsements throughout the life of this contract, as deemed necessary. Such
action will not require a formal Contract amendment but may be made by
administrative action.
17.10 Exceptions
In the event the Contractor or subcontractor(s) is/are a public entity, then the
Insurance Requirements shall not apply. Such public entity shall provide a
certificate of self-insurance. If the Contractor or subcontractor(s) is/are a State of
Arizona agency, board, commission, or university, none of the above shall apply.
Insurance and Indemnification Guidelines for State of Arizona
Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 89 of 183
18. Elevator Maintenance Contracts
Contracts involving elevator maintenance services present a higher risk to the State of
Arizona. Therefore, the State of Arizona requires higher limits of liability from these
contractors due to the serious nature of claims that could result from the negligence of the
Contractor.
18.1 Indemnification Clause
To the fullest extent permitted by law, Contractor shall defend, indemnify, and hold
harmless the State of Arizona, and its departments, agencies, boards, commissions,
universities, officers, officials, agents, and employees (hereinafter referred to as
“Indemnitee”) from and against any and all claims, actions, liabilities, damages,
losses, or expenses (including court costs, attorneys’ fees, and costs of claim
processing, investigation and litigation) (hereinafter referred to as “Claims”) for bodily
injury or personal injury (including death), or loss or damage to tangible or intangible
property caused, or alleged to be caused, in whole or in part, by the negligent or willful
acts or omissions of Contractor or any of its owners, officers, directors, agents,
employees or subcontractors. This indemnity includes any claim or amount arising
out of, or recovered under, the Workers’ Compensation Law or arising out of the
failure of such Contractor to conform to any federal, state, or local law, statute,
ordinance, rule, regulation, or court decree. It is the specific intention of the parties
that the Indemnitee shall, in all instances, except for Claims arising solely from the
negligent or willful acts or omissions of the Indemnitee, be indemnified by Contractor
from and against any and all claims. It is agreed that Contractor will be responsible
for primary loss investigation, defense, and judgment costs where this indemnification
is applicable. In consideration of the award of this contract, the Contractor agrees to
waive all rights of subrogation against the State of Arizona, its officers, officials,
agents, and employees for losses arising from the work performed by the Contractor
for the State of Arizona.
This indemnity shall not apply if the contractor or sub-contractor(s) is/are an agency,
board, commission or university of the State of Arizona.
18.2 Insurance Requirements
18.2.1 Contractor and subcontractors shall procure and maintain, until all of their
obligations have been discharged, including any warranty periods under this
Contract, insurance against claims for injury to persons or damage to property
arising from, or in connection with, the performance of the work hereunder by
the Contractor, its agents, representatives, employees or subcontractors.
18.2.2 The Insurance Requirements herein are minimum requirements for this
Contract and in no way limit the indemnity covenants contained in this
Contract. The State of Arizona in no way warrants that the minimum limits
contained herein are sufficient to protect the Contractor from liabilities that
arise out of the performance of the work under this Contract by the Contractor,
its agents, representatives, employees or subcontractors, and the Contractor
is free to purchase additional insurance.
18.3 Minimum Scope and Limits of Insurance
Insurance and Indemnification Guidelines for State of Arizona
Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 90 of 183
Contractor shall provide coverage with limits of liability not less than those stated
below.
18.3.1 Commercial General Liability (CGL) – Occurrence Form
Policy shall include bodily injury, property damage, and broad form contractual
liability coverage. Policy shall be endorsed to include XCU (Explosion,
Collapse, Underground) coverage.
• General Aggregate $10,000,000
• Products – Completed Operations Aggregate $10,000,000
• Personal and Advertising Injury $10,000,000
• Damage to Rented Premises $50,000
• Each Occurrence $10,000,000
a. The policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees as
additional insureds with respect to liability arising out of the activities
performed by or on behalf of the Contractor.
b. Policy shall contain a waiver of subrogation endorsement, as required by
this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work performed
by or on behalf of the Contractor.
18.3.2 Business Automobile Liability
Bodily Injury and Property Damage for any owned, hired, and/or non-owned
automobiles used in the performance of this Contract.
• Combined Single Limit (CSL) $1,000,000
a. Policy shall be endorsed, as required by this written agreement, to include
the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees as
additional insureds with respect to liability arising out of the activities
performed by, or on behalf of, the Contractor involving automobiles
owned, hired and/or non-owned by the Contractor.
b. Policy shall contain a waiver of subrogation endorsement as required by
this written agreement in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work performed
by or on behalf of the Contractor.
18.3.3 Workers’ Compensation and Employers' Liability
• Workers' Compensation Statutory
Insurance and Indemnification Guidelines for State of Arizona
Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 91 of 183
• Employers' Liability
o Each Accident $1,000,000
o Disease – Each Employee $1,000,000
o Disease – Policy Limit $1,000,000
a. Policy shall contain a waiver of subrogation endorsement, as required by
this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work performed
by or on behalf of the Contractor.
b. This requirement shall not apply to each Contractor or subcontractor that
is exempt under A.R.S. § 23-901, and when such Contractor or
subcontractor executes the appropriate waiver form (Sole Proprietor or
Independent Contractor).
18.4 Additional Insurance Requirements
The policies shall include, or be endorsed to include, as required by this written
agreement, the following provisions:
18.4.1 The Contractor's policies, as applicable, shall stipulate that the insurance
afforded the Contractor shall be primary and that any insurance carried by the
Department, its agents, officials, employees or the State of Arizona shall be
excess and not contributory insurance, as provided by A.R.S. § 41-621 (E).
18.4.2 Insurance provided by the Contractor shall not limit the Contractor’s liability
assumed under the indemnification provisions of this Contract.
18.5 Notice of Cancellation
Applicable to all insurance policies required within the Insurance Requirements of this
Contract, Contractor’s insurance shall not be permitted to expire, be suspended, be
canceled, or be materially changed for any reason without thirty (30) days prior written
notice to the State of Arizona. Within two (2) business days of receipt, Contractor
must provide notice to the State of Arizona if they receive notice of a policy that has
been or will be suspended, canceled, materially changed for any reason, has expired,
or will be expiring. Such notice shall be sent directly to the Department and shall be
mailed, emailed, hand delivered or sent by facsimile transmission to (State
Representative’s Name, Address & Fax Number).
18.6 Acceptability of Insurers
Contractor’s insurance shall be placed with companies licensed in the State of
Arizona or hold approved non-admitted status on the Arizona Department of
Insurance List of Qualified Unauthorized Insurers. Insurers shall have an “A.M. Best”
rating of not less than A- VII. The State of Arizona in no way warrants that the above-
required minimum insurer rating is sufficient to protect the Contractor from potential
insurer insolvency.
18.7 Verification of Coverage
Insurance and Indemnification Guidelines for State of Arizona
Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 92 of 183
Contractor shall furnish the State of Arizona with certificates of insurance (valid
ACORD form or equivalent approved by the State of Arizona) evidencing that
Contractor has the insurance as required by this Contract. An authorized
representative of the insurer shall sign the certificates.
18.7.1 All such certificates of insurance and policy endorsements must be received
by the State before work commences. The State’s receipt of any certificates
of insurance or policy endorsements that do not comply with this written
agreement shall not waive or otherwise affect the requirements of this
agreement.
18.7.2 Each insurance policy required by this Contract must be in effect at, or prior
to, commencement of work under this Contract. Failure to maintain the
insurance policies as required by this Contract, or to provide evidence of
renewal, is a material breach of contract.
18.7.3 All certificates required by this Contract shall be sent directly to the
Department. The State of Arizona project/contract number and project
description shall be noted on the certificate of insurance. The State of Arizona
reserves the right to require complete copies of all insurance policies required
by this Contract at any time.
18.8 Subcontractors
Contractor’s certificate(s) shall include all subcontractors as insureds under its
policies or Contractor shall be responsible for ensuring and/or verifying that all
subcontractors have valid and collectable insurance as evidenced by the certificates
of insurance and endorsements for each subcontractor. All coverages for
subcontractors shall be subject to the minimum Insurance Requirements identified
above. The Department reserves the right to require, at any time throughout the life
of the Contract, proof from the Contractor that its subcontractors have the required
coverage.
18.9 Approval and Modifications
The Contracting Agency, in consultation with State Risk, reserves the right to review
or make modifications to the insurance limits, required coverages, or endorsements
throughout the life of this contract, as deemed necessary. Such action will not require
a formal Contract amendment but may be made by administrative action.
18.10 Exceptions
In the event the Contractor or subcontractor(s) is/are a public entity, then the
Insurance Requirements shall not apply. Such public entity shall provide a certificate
of self-insurance. If the Contractor or subcontractor(s) is/are a State of Arizona
agency, board, commission, or university, none of the above shall apply.
Insurance and Indemnification Guidelines for State of Arizona
Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 93 of 183
19. Vehicle Transport / Storage / Repair
Contracts that provide vehicle storage, transport, or repair/maintenance services to the State
of Arizona may require specialized liability insurance when the Contractor transports and/or
stores or repairs the vehicle at their shop or garage. Two types of liability insurance should
be required:
• Garage Liability, and
• Garagekeepers Legal Liability
Garage Liability vs. Garagekeepers Legal Liability (GKLL)
The Garage Liability policy is equivalent to a general liability policy for garage operations.
This policy provides coverage for losses resulting on the garage premises or due to the
operations of the garage, repair shop, service station, towing company, etc. This policy
generally excludes damage to cars being repaired, stored, or transported by the Contractor.
Therefore, it is necessary to add, or endorse, Garagekeepers Legal Liability coverage to
this policy.
Garagekeepers Legal Liability (GKLL) on the other hand, provides protection to the
Contractor for loss or damage to cars belonging to others that are in the care, custody and
control of the Contractor. It is important to note that garagekeepers legal liability coverage
only responds to legal liability of the Contractor. For example, if we take a watch to a repair
shop and it is lost or damaged there, the loss is usually made good. If we take a car to the
shop and it is damaged, we have the same expectation. Unfortunately, garagekeepers legal
liability coverage will only respond for legally determined liability. In other words, the
Contractor must be found negligent. It is therefore necessary to specify that coverage should
be "direct primary coverage" in order to cover damage to vehicles belonging to others
regardless of negligence.
In summary, the garage liability policy shall be substituted in place of the commercial
general liability policy requirement. An additional requirement should be included for
"garagekeepers legal liability - direct primary coverage" to be endorsed onto the garage
liability policy so that vehicles belonging to the State of Arizona or the general public will be
covered while in the Contractor's care.
19.1 Indemnification Clause
To the fullest extent permitted by law, Contractor shall defend, indemnify, and hold
harmless the State of Arizona, and its departments, agencies, boards, commissions,
universities, officers, officials, agents, and employees (hereinafter referred to as
“Indemnitee”) from and against any and all claims, actions, liabilities, damages,
losses, or expenses (including court costs, attorneys’ fees, and costs of claim
processing, investigation and litigation) (hereinafter referred to as “Claims”) for bodily
injury or personal injury (including death), or loss or damage to tangible or intangible
property caused, or alleged to be caused, in whole or in part, by the negligent or willful
acts or omissions of Contractor or any of its owners, officers, directors, agents,
employees or subcontractors. This indemnity includes any claim or amount arising
out of, or recovered under, the Workers’ Compensation Law or arising out of the
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failure of such Contractor to conform to any federal, state, or local law, statute,
ordinance, rule, regulation, or court decree. It is the specific intention of the parties
that the Indemnitee shall, in all instances, except for Claims arising solely from the
negligent or willful acts or omissions of the Indemnitee, be indemnified by Contractor
from and against any and all claims. It is agreed that Contractor will be responsible
for primary loss investigation, defense, and judgment costs where this indemnification
is applicable. In consideration of the award of this contract, the Contractor agrees to
waive all rights of subrogation against the State of Arizona, its officers, officials,
agents, and employees for losses arising from the work performed by the Contractor
for the State of Arizona.
This indemnity shall not apply if the contractor or sub-contractor(s) is/are an agency,
board, commission or university of the State of Arizona.
19.2 Insurance Requirements
19.2.1 Contractor and subcontractors shall procure and maintain, until all of their
obligations have been discharged, including any warranty periods under this
Contract, insurance against claims for injury to persons or damage to property
arising from, or in connection with, the performance of the work hereunder by
the Contractor, its agents, representatives, employees or subcontractors.
19.2.2 The Insurance Requirements herein are minimum requirements for this
Contract and in no way limit the indemnity covenants contained in this
Contract. The State of Arizona in no way warrants that the minimum limits
contained herein are sufficient to protect the Contractor from liabilities that
arise out of the performance of the work under this Contract by the Contractor,
its agents, representatives, employees or subcontractors, and the Contractor
is free to purchase additional insurance.
19.3 Minimum Scope and Limits of Insurance
Contractor shall provide coverage with limits of liability not less than those stated
below.
19.3.1 Commercial General Liability (CGL) – Occurrence Form
Policy shall include bodily injury, property damage, and broad form contractual
liability coverage.
• General Aggregate $2,000,000
• Products – Completed Operations Aggregate $1,000,000
• Personal and Advertising Injury $1,000,000
• Damage to Rented Premises $50,000
• Each Occurrence $1,000,000
• Garage Liability (Premises and Operations) $1,000,000
• Garagekeepers Legal Liability - Direct Primary Coverage:
o Per Auto $ 500,000
o Comprehensive - aggregate $1,000,000
o Collision $ 500,000
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a. The policy shall be endorsed to include direct primary Garagekeepers
Legal Liability coverage.
b. Policy shall be endorsed, per this written agreement, to include Products
Liability.
c. The policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees as
additional insureds with respect to liability arising out of the activities
performed by or on behalf of the Contractor.
d. Policy shall contain a waiver of subrogation endorsement, as required by
this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work performed by
or on behalf of the Contractor.
19.3.2 Business Automobile Liability
Bodily Injury and Property Damage for any owned, hired, and/or non-owned
automobiles used in the performance of this Contract.
• Combined Single Limit (CSL) $1,000,000
Policy shall be endorsed to include coverage for towing (if towing services
are included in the scope of services in the Contract or part of the normal
operations of the Contractor).
Policy shall be endorsed to include Garagekeepers Coverage on a direct
primary basis with the following limits and deductibles:
• Per Auto $500,000
• Comprehensive - aggregate $1,000,000
• Collision $500,000
c. Policy shall be endorsed, as required by this written agreement, to include
the State of Arizona, and its departments, agencies, boards, commissions,
universities, officers, officials, agents, and employees as additional
insureds with respect to liability arising out of the activities performed by,
or on behalf of, the Contractor involving automobiles owned, hired and/or
non-owned by the Contractor.
d. Policy shall contain a waiver of subrogation endorsement as required by
this written agreement in favor of the State of Arizona, and its departments,
agencies, boards, commissions, universities, officers, officials, agents,
and employees for losses arising from work performed by or on behalf of
the Contractor.
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Service Contracts (Other Than Professional Services)
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19.3.3 Workers’ Compensation and Employers' Liability
• Workers' Compensation Statutory
• Employers' Liability
o Each Accident $1,000,000
o Disease – Each Employee $1,000,000
o Disease – Policy Limit $1,000,000
a. Policy shall contain a waiver of subrogation endorsement, as required by
this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work performed
by or on behalf of the Contractor.
b. This requirement shall not apply to each Contractor or subcontractor that
is exempt under A.R.S. § 23-901, and when such Contractor or
subcontractor executes the appropriate waiver form (Sole Proprietor or
Independent Contractor).
19.4 Additional Insurance Requirements
The policies shall include, or be endorsed to include, as required by this written
agreement, the following provisions:
19.4.1 The Contractor's policies, as applicable, shall stipulate that the insurance
afforded the Contractor shall be primary and that any insurance carried by the
Department, its agents, officials, employees or the State of Arizona shall be
excess and not contributory insurance, as provided by A.R.S. § 41-621 (E).
19.4.2 Insurance provided by the Contractor shall not limit the Contractor’s liability
assumed under the indemnification provisions of this Contract.
19.5 Notice of Cancellation
Applicable to all insurance policies required within the Insurance Requirements of this
Contract, Contractor’s insurance shall not be permitted to expire, be suspended, be
canceled, or be materially changed for any reason without thirty (30) days prior written
notice to the State of Arizona. Within two (2) business days of receipt, Contractor
must provide notice to the State of Arizona if they receive notice of a policy that has
been or will be suspended, canceled, materially changed for any reason, has expired,
or will be expiring. Such notice shall be sent directly to the Department and shall be
mailed, emailed, hand delivered or sent by facsimile transmission to (State
Representative’s Name, Address & Fax Number).
19.6 Acceptability of Insurers
Contractor’s insurance shall be placed with companies licensed in the State of
Arizona or hold approved non-admitted status on the Arizona Department of
Insurance List of Qualified Unauthorized Insurers. Insurers shall have an “A.M. Best”
rating of not less than A- VII. The State of Arizona in no way warrants that the above-
required minimum insurer rating is sufficient to protect the Contractor from potential
insurer insolvency.
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19.7 Verification of Coverage
Contractor shall furnish the State of Arizona with certificates of insurance (valid
ACORD form or equivalent approved by the State of Arizona) evidencing that
Contractor has the insurance as required by this Contract. An authorized
representative of the insurer shall sign the certificates.
19.7.1 All such certificates of insurance and policy endorsements must be received
by the State before work commences. The State’s receipt of any certificates
of insurance or policy endorsements that do not comply with this written
agreement shall not waive or otherwise affect the requirements of this
agreement.
19.7.2 Each insurance policy required by this Contract must be in effect at, or prior
to, commencement of work under this Contract. Failure to maintain the
insurance policies as required by this Contract, or to provide evidence of
renewal, is a material breach of contract.
19.7.3 All certificates required by this Contract shall be sent directly to the
Department. The State of Arizona project/contract number and project
description shall be noted on the certificate of insurance. The State of Arizona
reserves the right to require complete copies of all insurance policies required
by this Contract at any time.
19.8 Subcontractors
Contractor’s certificate(s) shall include all subcontractors as insureds under its
policies or Contractor shall be responsible for ensuring and/or verifying that all
subcontractors have valid and collectable insurance as evidenced by the certificates
of insurance and endorsements for each subcontractor. All coverages for
subcontractors shall be subject to the minimum Insurance Requirements identified
above. The Department reserves the right to require, at any time throughout the life
of the Contract, proof from the Contractor that its subcontractors have the required
coverage.
19.9 Approval and Modifications
The Contracting Agency, in consultation with State Risk, reserves the right to review
or make modifications to the insurance limits, required coverages, or endorsements
throughout the life of this contract, as deemed necessary. Such action will not require
a formal Contract amendment but may be made by administrative action.
19.10 Exceptions
In the event the Contractor or subcontractor(s) is/are a public entity, then the
Insurance Requirements shall not apply. Such public entity shall provide a certificate
of self-insurance. If the Contractor or subcontractor(s) is/are a State of Arizona
agency, board, commission, or university, none of the above shall apply.
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20. Special Events
All Special Event Permits’ agreements/contracts must contain indemnification and insurance
requirements.
• The Special Events Insurance Module is to be used for the agreement between
Agency and Permittee.
o The Special Events Insurance Module will cover most scenarios when having
a special event.
o Determine the potential exposures in order to choose the correct types of
insurance to insert into the agreement/contract.
• Permittee is responsible for entering into a written agreement/ contract with any
vendors, suppliers, and contractors (Subcontractors). These agreements/ contracts
must “follow form” and contain the same minimum insurance requirements.
• Permittee shall be responsible for either insuring all Subcontractors under its policies
or shall require their Subcontractors to provide insurance as stated in the agreement.
Note: If an Agency is the Permittee then all Subcontractors shall meet insurance
requirements as applicable. The Agency shall not insure nor indemnify the general contractor,
design professional, vendors, suppliers, and/or subcontractors.
If the Agency is using an existing State Contractor, performing services provided under that
contract, a separate Certificate of Insurance (COI) is not necessary, as the COI should be on
file with SPO.
• Permittee is only required to provide their COIs for the Special Event; however, they
are responsible for collecting and maintaining all COIs of their Subcontractors. In the
case of specialty insurance, or at the discretion of Agency, the Permittee may be
requested to provide the written agreements/contracts and COIs from any of its
subcontractors.
• If the Special Event Permittee is a State Agency, the Agency is responsible for
collecting all of the Subcontractors’ written agreements and COIs and provide them
to Agency for review.
Special Note for State Agencies:
If the special event is for another State Agency, ADOA will provide to the State Agency an
agreement that will need to be completed by the Agency’s co-sponsors, vendors, and
contractors that will include indemnification and insurance requirements.
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20.1 Indemnification Hold Harmless Clause
If You Are:
Profit / Non-Profit
To the fullest extent permitted by law, Permittee shall defend, indemnify, and hold harmless the State
of Arizona, and its departments, agencies, boards, commissions, universities, officers, officials,
agents, and employees (hereinafter referred to as “Indemnitee”) from and against any and all claims,
actions, liabilities, damages, losses, or expenses (including court costs, attorneys’ fees, and costs of
claim processing, investigation and litigation) (hereinafter referred to as “Claims”) for bodily injury or
personal injury (including death), or loss or damage to tangible or intangible property caused, or
alleged to be caused, in whole or in part, by the negligent or willful acts or omissions of Permittee or
any of its owners, officers, directors, agents, employees or vendors. This indemnity includes any
claim or amount arising out of or recovered under the Workers’ Compensation Law or arising out of
the failure of such Permittee to conform to any federal, state, or local law, statute, ordinance, rule,
regulation, or court decree. It is the specific intention of the parties that the Indemnitee shall, in all
instances, except for Claims arising solely from the negligent or willful acts or omissions of the
Indemnitee, be indemnified by Permittee from and against any and all claims. It is agreed that
Permittee will be responsible for primary loss investigation, defense, and judgment costs where this
indemnification is applicable. In consideration of the award of this Permit, the Permittee agrees to
waive all rights of subrogation against the State of Arizona, its officers, officials, agents, and
employees for losses arising from the work performed by the Permittee for the State of Arizona.
Permittee(s) / Vendor is a public/non-profit
Signature of Authorized Representative/Title Date
OR
Public Entity
Each party (as “indemnitor”) agrees to defend, indemnify, and hold harmless the other party (as
“Indemnitee”) from and against any and all claims, losses, liability, costs, or expenses (including
reasonable attorney’s fees) (hereinafter collectively referred to as “claims”) arising out of bodily injury
of any person (including death) or property damage but only to the extent that such claims which
result in vicarious/derivative liability to the indemnitee, are caused by the act, omission, negligence,
misconduct, or other fault of the indemnitor, its officer, officials, agents, employees, or volunteers.”
Permittee / Vendor is a Public Entity
Signature of Authorized Representative/Title Date
OR
State Of Arizona
There are no indemnification/hold harmless requirements for the State of Arizona Department’s,
Agencies, Boards, Commissions, or Universities.
20.2 Permittee Insurance Requirements
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Service Contracts (Other Than Professional Services)
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20.2.1 To the extent allowed by law, Permittee and vendors/contractor shall procure
and maintain, until all of their obligations, including any warranty periods under
this Permit, are satisfied, insurance against claims for injury to persons or
damage to property which may arise from or in connection with the Special
Event by the Permittee, his agents, representatives, employees or vendors.
20.2.2 The insurance requirements herein are minimum requirements for this Permit
and in no way limit the indemnity covenants contained in this Permit. The
State of Arizona in no way warrants that the minimum limits contained herein
are sufficient to protect the Permittee from liabilities that might arise out of the
Special Event under this Permit by the Permittee, its agents, representatives,
employees or vendors, and Permittee is free to purchase additional insurance.
Special Events Office reserves the right to increase limits based on the type
of event and/or the number of participants.
20.3 Minimum Scope and Limits of Insurance
Permittee shall provide coverage with limits of liability not less than those stated
below.
20.3.1 Commercial General Liability (CGL) – Occurrence Form
Policy shall include bodily injury, property damage, and broad form contractual
liability coverage.
• General Aggregate $2,000,000
• Products – Completed Operations Aggregate $1,000,000
• Personal and Advertising Injury $1,000,000
• Damage to Rented Premises $50,000
• Each Occurrence $1,000,000
a. The policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees as
additional insureds with respect to liability arising out of the activities
performed by or on behalf of the Permittee.
b. Policy shall contain a waiver of subrogation endorsement, as required by
this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work performed
by or on behalf of the Permittee.
20.3.2 Business Automobile Liability
Bodily Injury and Property Damage for any owned, hired, and/or non-owned
automobiles used in the performance of this Permit.
• Combined Single Limit (CSL) $1,000,000
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Updated: May 8, 2018 Page 101 of 183
a. Policy shall be endorsed, as required by this written agreement, to include
the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees as
additional insureds with respect to liability arising out of the activities
performed by, or on behalf of, the Permittee involving automobiles owned,
hired and/or non-owned by the Permittee.
b. Policy shall contain a waiver of subrogation endorsement as required by
this written agreement in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work performed
by or on behalf of the Permittee.
20.3.3 Workers’ Compensation and Employers' Liability
• Workers' Compensation Statutory
• Employers' Liability
o Each Accident $1,000,000
o Disease – Each Employee $1,000,000
o Disease – Policy Limit $1,000,000
a. Policy shall contain a waiver of subrogation endorsement, as required by
this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work performed
by or on behalf of the Permittee.
b. This requirement shall not apply to each Permittee or subcontractor that
is exempt under A.R.S. § 23-901, and when such Permittee or
subcontractor executes the appropriate waiver form (Sole Proprietor or
Independent Contractor).
20.3.4 Professional Liability (Errors and Omissions Liability)
• Each Claim $2,000,000
• Annual Aggregate $2,000,000
a. In the event that the Professional Liability insurance required by this
Permit is written on a claims-made basis, Contractor warrants that any
retroactive date under the policy shall precede the effective date of this
Permit and, either continuous coverage will be maintained, or an
extended discovery period will be exercised, for a period of two (2) years
beginning at the time work under this Permit is completed.
b. The policy shall cover professional misconduct or negligent acts for those
positions defined in the Scope of Work of this Permit.
20.4 Additional Insurance:
If Permittee is having any of the following types of events, certificate of insurance will
need to be provided to ADOA:
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20.4.1 Firework Production – Minimum of $10,000,000 Liability coverage for the
firework vendor. Vendor is required to provide all insurance coverage’s as
stated in 20.3.1 through 20.3.4 above.
20.4.2 Carnival/Amusement Rides – Minimum of $5,000,000 Ride Liability
coverage. Vendor is required to provide all insurance coverage’s as stated in
20.3.1 through 20.3.4 above.
20.4.3 Races or Events – More than 1,000 participants and spectators will require a
minimum of $5,000,000 General Liability coverage in addition to the stated
requirements in 20.3.1 through 20.3.4 above.
20.4.4 Aviation – If aircraft are being used during the event, GSD will contact Risk
Management for guidance for insurance requirements to include in such an
event.
20.4.5 Medical Vendors – If Permittee is required to have EMT’s or medical
professionals at the event Permittee will be required to have Permittee’s
vendor provide Medical Malpractice coverage. GSD will contact State Risk for
insurance requirements to include in such an event.
20.5 Additional Insurance Requirements
The policies shall include, or be endorsed to include, as required by this written
agreement, the following provisions:
20.5.1 The Contractor's policies, as applicable, shall stipulate that the insurance
afforded the Contractor shall be primary and that any insurance carried by the
Department, its agents, officials, employees or the State of Arizona shall be
excess and not contributory insurance, as provided by A.R.S. § 41-621 (E).
20.5.2 Insurance provided by the Contractor shall not limit the Contractor’s liability
assumed under the indemnification provisions of this Contract.
20.6 Notice of Cancellation
Applicable to all insurance policies required within the Insurance Requirements of this
Contract, Contractor’s insurance shall not be permitted to expire, be suspended, be
canceled, or be materially changed for any reason without thirty (30) days prior written
notice to the State of Arizona. Within two (2) business days of receipt, Contractor
must provide notice to the State of Arizona if they receive notice of a policy that has
been or will be suspended, canceled, materially changed for any reason, has expired,
or will be expiring. Such notice shall be sent directly to the Department and shall be
mailed, emailed, hand delivered or sent by facsimile transmission to (State
Representative’s Name, Address & Fax Number).
20.7 Acceptability of Insurers
Contractor’s insurance shall be placed with companies licensed in the State of
Arizona or hold approved non-admitted status on the Arizona Department of
Insurance List of Qualified Unauthorized Insurers. Insurers shall have an “A.M. Best”
rating of not less than A- VII. The State of Arizona in no way warrants that the above-
required minimum insurer rating is sufficient to protect the Contractor from potential
insurer insolvency.
20.8 Verification of Coverage
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Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 103 of 183
Contractor shall furnish the State of Arizona with certificates of insurance (valid
ACORD form or equivalent approved by the State of Arizona) evidencing that
Contractor has the insurance as required by this Contract. An authorized
representative of the insurer shall sign the certificates.
20.8.1 All such certificates of insurance and policy endorsements must be received
by the State before work commences. The State’s receipt of any certificates
of insurance or policy endorsements that do not comply with this written
agreement shall not waive or otherwise affect the requirements of this
agreement.
20.8.2 Each insurance policy required by this Contract must be in effect at, or prior
to, commencement of work under this Contract. Failure to maintain the
insurance policies as required by this Contract, or to provide evidence of
renewal, is a material breach of contract.
20.8.3 All certificates required by this Contract shall be sent directly to the
Department. The State of Arizona project/contract number and project
description shall be noted on the certificate of insurance. The State of Arizona
reserves the right to require complete copies of all insurance policies required
by this Contract at any time.
20.9 Subcontractors
Contractor’s certificate(s) shall include all subcontractors as insureds under its
policies or Contractor shall be responsible for ensuring and/or verifying that all
subcontractors have valid and collectable insurance as evidenced by the certificates
of insurance and endorsements for each subcontractor. All coverages for
subcontractors shall be subject to the minimum Insurance Requirements identified
above. The Department reserves the right to require, at any time throughout the life
of the Contract, proof from the Contractor that its subcontractors have the required
coverage.
20.10 Approval and Modifications
The Contracting Agency, in consultation with State Risk, reserves the right to review
or make modifications to the insurance limits, required coverages, or endorsements
throughout the life of this contract, as deemed necessary. Such action will not require
a formal Contract amendment but may be made by administrative action.
20.11 Exceptions
In the event the Contractor or subcontractor(s) is/are a public entity, then the
Insurance Requirements shall not apply. Such public entity shall provide a certificate
of self-insurance. If the Contractor or subcontractor(s) is/are a State of Arizona
agency, board, commission, or university, none of the above shall apply.
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Service Contracts (Other Than Professional Services)
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21. Commercial Lease / Rental Contracts
This type of insurance is to be used in commercial leases with non-state Tenant/Lessee in
State owned buildings.
This Section does not apply to the following:
• State of Arizona agencies paying rent to the Department of Administration or any
other State Agency as Lessor
• Short-term agreements or permits for outside entities to use State properties (see
also “Special Events”)
• Leases in which the State agency is a Lessee in a non-state building.
Fire Exposures
Damage to Rented Premises, a.k.a. Fire Legal Liability coverage, provides protection for
negligent acts of the Lessee which result in fire damage to the State of Arizona property
that is under the Lessee's care, custody, and control. The Commercial General Liability
policy typically has a sub limit of liability for fire damage of $100,000 to the maximum of
the “each occurrence” limit of liability.
Consideration should be given to requiring a higher Damage to Rented Premises sub
limit on the Commercial General Liability policy if the Lessee operates a business that
presents a significant risk of fire (i.e. food preparation operations, laboratory chemicals,
etc.). The minimum limit requirement should be no less that the rebuilding value of the
premises or space being leased, including the contemplation of, but not limited to, all fixed
equipment, betterments, improvements, etc. To determine the amount of limits
necessary, you need to consider the dollar amount per square foot based on occupancy
type, multiplied by the number of square feet being leased.
Supplemental Insurance Coverages
There are additional insurance coverages that may need to be required under certain
circumstances and should be included in the insurance requirements when appropriate.
Examples of Supplemental Insurance Coverages:
• Builder’s risk insurance - for those situations involving a ground lease, where the
Lessee will construct a building or other tenant improvements.
• All risk property insurance - This insurance will be required on the building and
the lessee's contents if the Lessee is leasing an existing State of Arizona facility
where they are the sole occupant.
• Lease of property with Underground Storage Tanks, Aboveground Storage
Tanks, or Dry Wells – If the Lessee is a gas station, or agricultural lease with
storage tanks, then pollution coverage should be required along with the lessee
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Service Contracts (Other Than Professional Services)
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providing copies of all permits with the Arizona Department of Environmental
Quality.
• If supplementary insurance coverage is required, contact State Risk for
assistance, as the insurance language will need to be modified in two sections.
21.1 Indemnification Clause
To the fullest extent permitted by law, Lessee shall defend, indemnify, and hold
harmless the State of Arizona, and its departments, agencies, boards, commissions,
universities, officers, officials, agents, and employees (hereinafter referred to as
“Indemnitee”) from and against any and all claims, actions, liabilities, damages,
losses, or expenses (including court costs, attorneys’ fees, and costs of claim
processing, investigation and litigation) (hereinafter referred to as “Claims”) for bodily
injury or personal injury (including death), or loss or damage to tangible or intangible
property caused, or alleged to be caused, in whole or in part, by the negligent or willful
acts or omissions of Lessee or any of its owners, officers, directors, agents,
employees or subcontractors. This indemnity includes any claim or amount arising
out of, or recovered under, the Workers’ Compensation Law or arising out of the
failure of such Lessee to conform to any federal, state, or local law, statute, ordinance,
rule, regulation, or court decree. It is the specific intention of the parties that the
Indemnitee shall, in all instances, except for Claims arising solely from the negligent
or willful acts or omissions of the Indemnitee, be indemnified by Lessee from and
against any and all claims. It is agreed that Lessee will be responsible for primary loss
investigation, defense, and judgment costs where this indemnification is applicable.
In consideration of the award of this Lease, the Lessee agrees to waive all rights of
subrogation against the State of Arizona, its officers, officials, agents, and employees
for losses arising from the work performed by the Lessee for the State of Arizona.
This indemnity shall not apply if the Lessee or sub-contractor(s) is/are an agency,
board, commission or university of the State of Arizona.
21.2 Insurance Requirements
21.2.1 Lessee and subcontractors shall procure and maintain, until all of their
obligations have been discharged, including any warranty periods under this
Lease, insurance against claims for injury to persons or damage to property
arising from, or in connection with, the performance of the work hereunder by
the Lessee, its agents, representatives, employees or subcontractors.
21.2.2 The Insurance Requirements herein are minimum requirements for this Lease
and in no way limit the indemnity covenants contained in this Lease. The State
of Arizona in no way warrants that the minimum limits contained herein are
sufficient to protect the Lessee from liabilities that arise out of the performance
of the work under this Lease by the Lessee, its agents, representatives,
employees or subcontractors, and the Lessee is free to purchase additional
insurance.
21.3 Minimum Scope and Limits of Insurance
Lessee shall provide coverage with limits of liability not less than those stated below.
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Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 106 of 183
21.3.1 Commercial General Liability (CGL) – Occurrence Form
Policy shall include bodily injury, property damage, and broad form contractual
liability coverage.
• General Aggregate $2,000,000
• Products – Completed Operations Aggregate $1,000,000
• Personal and Advertising Injury $1,000,000
• Damage to Rented Premises $100,000
• Each Occurrence $1,000,000
a. The policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees as
additional insureds with respect to liability arising out of the activities
performed by or on behalf of the Lessee.
b. Policy shall contain a waiver of subrogation endorsement, as required by
this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work performed
by or on behalf of the Lessee.
21.3.2 Business Automobile Liability
Bodily Injury and Property Damage for any owned, hired, and/or non-owned
automobiles used in the performance of this Lease.
• Combined Single Limit (CSL) $1,000,000
a. Policy shall be endorsed, as required by this written agreement, to include
the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees as
additional insureds with respect to liability arising out of the activities
performed by, or on behalf of, the Lessee involving automobiles owned,
hired and/or non-owned by the Lessee.
b. Policy shall contain a waiver of subrogation endorsement as required by
this written agreement in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work performed
by or on behalf of the Lessee.
21.3.3 Workers’ Compensation and Employers' Liability
• Workers' Compensation Statutory
• Employers' Liability
o Each Accident $1,000,000
o Disease – Each Employee $1,000,000
o Disease – Policy Limit $1,000,000
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Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 107 of 183
a. Policy shall contain a waiver of subrogation endorsement, as required by
this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work performed
by or on behalf of the Lessee.
b. This requirement shall not apply to each Lessee or subcontractor that is
exempt under A.R.S. § 23-901, and when such Lessee or subcontractor
executes the appropriate waiver form (Sole Proprietor or Independent
Lessee).
21.3.4 Property Insurance
Property insurance on the building is only required if the Lessee is the sole
occupant of the building.
• Coverage on Lessee’s contents $_________
Replacement Value
• Coverage on building (if Lessee is sole occupant) $_________
Replacement Value
Property insurance shall be written on an "all risk” replacement cost
coverage, including but not limited to contingent business interruption for
neighboring premises, ingress/egress and for flood and earth movement.
Policy shall include Leasehold Interest or Rental Expense for a minimum
of a three-month indemnity period and/or for a limit of no less than rental
value.
If property coverage on the building is required, and the State has an
insurable interest, then Arizona Department of Administration – Risk
Management (and the respective agency or university) shall be named as
a loss payee.
Policy shall be endorsed as required by this written agreement, to include
the State of Arizona, and its departments, agencies, boards, commissions,
universities, officers, officials, agents, and employees as additional
insureds with respect to liability arising out of the use and/or occupancy of
the property subject to this Lease.
Policy shall contain a waiver of subrogation endorsement as required by
this written agreement in favor of the State of Arizona, and its departments,
agencies, boards, commissions, universities, officers, officials, agents,
and employees for losses arising from the Lease.
21.4 Additional Insurance Requirements
The policies shall include, or be endorsed to include, as required by this written
agreement, the following provisions:
21.4.1 The Lessee's policies, as applicable, shall stipulate that the insurance afforded
the Lessee shall be primary and that any insurance carried by the Department,
Insurance and Indemnification Guidelines for State of Arizona
Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 108 of 183
its agents, officials, employees or the State of Arizona shall be excess and not
contributory insurance, as provided by A.R.S. § 41-621 (E).
21.4.2 Insurance provided by the Lessee shall not limit the Lessee’s liability assumed
under the indemnification provisions of this Lease.
21.5 Notice of Cancellation
Applicable to all insurance policies required within the Insurance Requirements of this
Contract, Contractor’s insurance shall not be permitted to expire, be suspended, be
canceled, or be materially changed for any reason without thirty (30) days prior written
notice to the State of Arizona. Within two (2) business days of receipt, Contractor
must provide notice to the State of Arizona if they receive notice of a policy that has
been or will be suspended, canceled, materially changed for any reason, has expired,
or will be expiring. Such notice shall be sent directly to the Department and shall be
mailed, emailed, hand delivered or sent by facsimile transmission to (State
Representative’s Name, Address & Fax Number).
21.6 Acceptability of Insurers
Lessee’s insurance shall be placed with companies licensed in the State of Arizona
or hold approved non-admitted status on the Arizona Department of Insurance List of
Qualified Unauthorized Insurers. Insurers shall have an “A.M. Best” rating of not less
than A- VII. The State of Arizona in no way warrants that the above-required minimum
insurer rating is sufficient to protect the Lessee from potential insurer insolvency.
21.7 Verification of Coverage
Contractor shall furnish the State of Arizona with certificates of insurance (valid
ACORD form or equivalent approved by the State of Arizona) evidencing that
Contractor has the insurance as required by this Contract. An authorized
representative of the insurer shall sign the certificates.
21.7.1 All such certificates of insurance and policy endorsements must be received
by the State before work commences. The State’s receipt of any certificates
of insurance or policy endorsements that do not comply with this written
agreement shall not waive or otherwise affect the requirements of this
agreement.
21.7.2 Each insurance policy required by this Contract must be in effect at, or prior
to, commencement of work under this Contract. Failure to maintain the
insurance policies as required by this Contract, or to provide evidence of
renewal, is a material breach of contract.
21.7.3 All certificates required by this Contract shall be sent directly to the
Department. The State of Arizona project/contract number and project
description shall be noted on the certificate of insurance. The State of Arizona
reserves the right to require complete copies of all insurance policies required
by this Contract at any time.
21.8 Subcontractors
Lessee’s certificate(s) shall include all subcontractors as insureds under its policies
or Lessee shall be responsible for ensuring and/or verifying that all subcontractors
Insurance and Indemnification Guidelines for State of Arizona
Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 109 of 183
have valid and collectable insurance as evidenced by the certificates of insurance and
endorsements for each subcontractor. All coverages for subcontractors shall be
subject to the minimum Insurance Requirements identified above. The Department
reserves the right to require, at any time throughout the life of the Lease, proof from
the Lessee that its subcontractors have the required coverage.
21.9 Approval and Modifications
The Contracting Agency, in consultation with State Risk, reserves the right to review
or make modifications to the insurance limits, required coverages, or endorsements
throughout the life of this Lease, as deemed necessary. Such action will not require
a formal Lease amendment but may be made by administrative action.
21.10 Exceptions
In the event the Lessee or subcontractor(s) is/are a public entity, then the Insurance
Requirements shall not apply. Such public entity shall provide a certificate of self-
insurance. If the Lessee or subcontractor(s) is/are a State of Arizona agency, board,
commission, or university, none of the above shall apply.
Insurance and Indemnification Guidelines for State of Arizona
Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 110 of 183
22. Commercial Lease / Rental Agreements / With Pollution Requirement
22.1 Indemnification Clause
To the fullest extent permitted by law, Lessee shall defend, indemnify, and hold
harmless the State of Arizona, and its departments, agencies, boards, commissions,
universities, officers, officials, agents, and employees (hereinafter referred to as
“Indemnitee”) from and against any and all claims, actions, liabilities, damages,
losses, or expenses (including court costs, attorneys’ fees, and costs of claim
processing, investigation and litigation) (hereinafter referred to as “Claims”) for bodily
injury or personal injury (including death), or loss or damage to tangible or intangible
property caused, or alleged to be caused, in whole or in part, by the negligent or willful
acts or omissions of Lessee or any of its owners, officers, directors, agents,
employees or subcontractors. This indemnity includes any claim or amount arising
out of, or recovered under, the Workers’ Compensation Law or arising out of the
failure of such Lessee to conform to any federal, state, or local law, statute, ordinance,
rule, regulation, or court decree. It is the specific intention of the parties that the
Indemnitee shall, in all instances, except for Claims arising solely from the negligent
or willful acts or omissions of the Indemnitee, be indemnified by Lessee from and
against any and all claims. It is agreed that Lessee will be responsible for primary loss
investigation, defense, and judgment costs where this indemnification is applicable.
In consideration of the award of this Lease, the Lessee agrees to waive all rights of
subrogation against the State of Arizona, its officers, officials, agents, and employees
for losses arising from the work performed by the Lessee for the State of Arizona.
This indemnity shall not apply if the Lessee or sub-contractor(s) is/are an agency,
board, commission or university of the State of Arizona.
22.2 Insurance Requirements
22.2.1 Lessee and subcontractors shall procure and maintain, until all of their
obligations have been discharged, including any warranty periods under this
Lease, insurance against claims for injury to persons or damage to property
arising from, or in connection with, the performance of the work hereunder by
the Lessee, its agents, representatives, employees or subcontractors.
22.2.2 The Insurance Requirements herein are minimum requirements for this Lease
and in no way limit the indemnity covenants contained in this Lease. The State
of Arizona in no way warrants that the minimum limits contained herein are
sufficient to protect the Lessee from liabilities that arise out of the performance
of the work under this Lease by the Lessee, its agents, representatives,
employees or subcontractors, and the Lessee is free to purchase additional
insurance.
22.3 Minimum Scope and Limits of Insurance
Lessee shall provide coverage with limits of liability not less than those stated below.
22.3.1 Commercial General Liability (CGL) – Occurrence Form
Policy shall include bodily injury, property damage, and broad form contractual
liability coverage.
Insurance and Indemnification Guidelines for State of Arizona
Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 111 of 183
• General Aggregate $2,000,000
• Products – Completed Operations Aggregate $1,000,000
• Personal and Advertising Injury $1,000,000
• Damage to Rented Premises $100,000
• Each Occurrence $1,000,000
a. The policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees as
additional insureds with respect to liability arising out of the activities
performed by or on behalf of the Lessee.
b. Policy shall contain a waiver of subrogation endorsement, as required by
this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work performed
by or on behalf of the Lessee.
22.3.2 Business Automobile Liability
Bodily Injury and Property Damage for any owned, hired, and/or non-owned
automobiles used in the performance of this Lease.
• Combined Single Limit (CSL) $1,000,000
a. Policy shall be endorsed, as required by this written agreement, to include
the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees as
additional insureds with respect to liability arising out of the activities
performed by, or on behalf of, the Lessee involving automobiles owned,
hired and/or non-owned by the Lessee.
b. Policy shall contain a waiver of subrogation endorsement as required by
this written agreement in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work performed
by or on behalf of the Lessee.
22.3.3 Workers’ Compensation and Employers' Liability
• Workers' Compensation Statutory
• Employers' Liability
o Each Accident $1,000,000
o Disease – Each Employee $1,000,000
o Disease – Policy Limit $1,000,000
a. Policy shall contain a waiver of subrogation endorsement, as required by
this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
Insurance and Indemnification Guidelines for State of Arizona
Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 112 of 183
officials, agents, and employees for losses arising from work performed
by or on behalf of the Lessee.
b. This requirement shall not apply to each Lessee or subcontractor that is
exempt under A.R.S. § 23-901, and when such Lessee or subcontractor
executes the appropriate waiver form (Sole Proprietor or Independent
Lessee).
22.3.4 Property Insurance
Property insurance on the building is only required if the Lessee is the sole
occupant of the building.
• Coverage on Lessee’s contents $_________
Replacement Value
• Coverage on building (if Lessee is sole occupant) $_________
Replacement Value
a. Property insurance shall be written on an "all risk,” replacement cost
coverage, including but not limited to contingent business interruption for
neighboring premises, ingress/egress and for flood and earth movement.
b. Policy shall include Leasehold Interest or Rental Expense for a minimum
of a three-month indemnity period and/or for a limit of no less than rental
value.
c. If property coverage on the building is required, and the State has an
insurable interest, then Arizona Department of Administration – Risk
Management (and the respective agency or university) shall be named
as a loss payee.
d. The Policy shall be endorsed. as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees as
additional insureds with respect to liability arising out of the use and/or
occupancy of the property subject to this Lease.
e. Policy shall contain a waiver of subrogation endorsement, as required by
this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from the Lease.
22.3.5 Lessee Pollution Legal Liability
For losses caused by pollution conditions that arise from the operations of the
Lessee as described in the Scope of Services section of this Lease.
• Per Occurrence $1,000,000
• General Aggregate $2,000,000
Coverage must be identified specific to the operations as described in
the Scope of Services in this Lease.
Must include coverage for pollution losses arising out of completed
operations.
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Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 113 of 183
Pollution coverage must apply to all locations utilized for the acceptance,
storage, or disposal of any hazardous materials.
The policy is written on an “occurrence” basis with no sunset clause. In the
event that the Pollution Liability insurance required by this Lease is written
on a claims-made basis, Lessee warrants that any retroactive date under
the policy shall precede the effective date of this Lease. That either
continuous coverage will be maintained, or an extended discovery period
will be exercised, for a period of ten (10) years beginning at the time this
Lease is terminated.
Pollution coverage must apply to all phases of the work described in the
Scope of Services in this Lease.
The policy shall include coverage for bodily injury, sickness, disease,
mental anguish, or shock sustained by any person, including death and
medical monitoring costs.
The policy shall include coverage for property damage, and physical
damage to, or destruction of, tangible property including the resulting loss
of use thereof, clean-up costs, and the loss of use of tangible property that
has not been physically damaged or destroyed including diminution in
value.
The policy shall include coverage for environmental damage including
physical damage to soil, surface water, ground water, plant, or animal life,
caused by pollution conditions and giving rise to cleanup costs.
For losses that arise from the facility, coverage shall apply to sudden and
non-sudden pollution conditions including the discharge, dispersal,
release or escape of smoke, vapors, soot, fumes, acids, alkalis, toxic
chemicals, liquids or gases, waste materials or other irritants,
contaminants or pollutants, into or upon land, atmosphere, or any
watercourse or body of water which results in cleanup costs, bodily injury
or property damage.
The policy shall include coverage for environmental damage including
physical damage to soil, surface water, ground water, plant, or animal life,
caused by pollution conditions and giving rise to cleanup costs.
The policy shall include defense including costs, charges and expenses
incurred in the investigation, adjustment or defense of claims for such
compensatory damages.
The policy shall include coverage for asbestos and lead, mold, with no
exclusions.
The policy shall include Non-Owned Disposal Site coverage.
The policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees as
additional insureds with respect to liability arising out of the activities
performed by or on behalf of the Lessee.
The policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work performed by
the Lessee.
Insurance and Indemnification Guidelines for State of Arizona
Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 114 of 183
22.4 Additional Insurance Requirements
The policies shall include, or be endorsed to include, as required by this written
agreement, the following provisions:
22.4.1 The Lessee's policies, as applicable, shall stipulate that the insurance afforded
the Lessee shall be primary and that any insurance carried by the Department,
its agents, officials, employees or the State of Arizona shall be excess and not
contributory insurance, as provided by A.R.S. § 41-621 (E).
22.4.2 Insurance provided by the Lessee shall not limit the Lessee’s liability assumed
under the indemnification provisions of this Lease.
22.5 Notice of Cancellation
Applicable to all insurance policies required within the Insurance Requirements of this
Contract, Contractor’s insurance shall not be permitted to expire, be suspended, be
canceled, or be materially changed for any reason without thirty (30) days prior written
notice to the State of Arizona. Within two (2) business days of receipt, Contractor
must provide notice to the State of Arizona if they receive notice of a policy that has
been or will be suspended, canceled, materially changed for any reason, has expired,
or will be expiring. Such notice shall be sent directly to the Department and shall be
mailed, emailed, hand delivered or sent by facsimile transmission to (State
Representative’s Name, Address & Fax Number).
22.6 Acceptability of Insurers
Lessee’s insurance shall be placed with companies licensed in the State of Arizona
or hold approved non-admitted status on the Arizona Department of Insurance List of
Qualified Unauthorized Insurers. Insurers shall have an “A.M. Best” rating of not less
than A- VII. The State of Arizona in no way warrants that the above-required minimum
insurer rating is sufficient to protect the Lessee from potential insurer insolvency.
22.7 Verification of Coverage
Contractor shall furnish the State of Arizona with certificates of insurance (valid
ACORD form or equivalent approved by the State of Arizona) evidencing that
Contractor has the insurance as required by this Contract. An authorized
representative of the insurer shall sign the certificates.
22.7.1 All such certificates of insurance and policy endorsements must be received
by the State before work commences. The State’s receipt of any certificates
of insurance or policy endorsements that do not comply with this written
agreement shall not waive or otherwise affect the requirements of this
agreement.
22.7.2 Each insurance policy required by this Contract must be in effect at, or prior
to, commencement of work under this Contract. Failure to maintain the
insurance policies as required by this Contract, or to provide evidence of
renewal, is a material breach of contract.
22.7.3 All certificates required by this Contract shall be sent directly to the
Department. The State of Arizona project/contract number and project
description shall be noted on the certificate of insurance. The State of Arizona
Insurance and Indemnification Guidelines for State of Arizona
Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 115 of 183
reserves the right to require complete copies of all insurance policies required
by this Contract at any time.
22.8 Subcontractors
Lessee’s certificate(s) shall include all subcontractors as insureds under its policies
or Lessee shall be responsible for ensuring and/or verifying that all subcontractors
have valid and collectable insurance as evidenced by the certificates of insurance and
endorsements for each subcontractor. All coverages for subcontractors shall be
subject to the minimum Insurance Requirements identified above. The Department
reserves the right to require, at any time throughout the life of the Lease, proof from
the Lessee that its subcontractors have the required coverage.
22.9 Approval and Modifications
The Contracting Agency, in consultation with State Risk, reserves the right to review
or make modifications to the insurance limits, required coverages, or endorsements
throughout the life of this Lease, as deemed necessary. Such action will not require
a formal Lease amendment but may be made by administrative action.
22.10 Exceptions
In the event the Lessee or subcontractor(s) is/are a public entity, then the Insurance
Requirements shall not apply. Such public entity shall provide a certificate of self-
insurance. If the Lessee or subcontractor(s) is/are a State of Arizona agency, board,
commission, or university, none of the above shall apply.
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 116 of 183
23. Commodity Purchase Contracts
The requirements included in this section pertain to standard commodity purchase
contracts (e.g. stationery, office supplies, etc.). For most commodity purchases it is not
necessary, or practical, to require the vendor to include the State of Arizona, its
departments, agencies, boards, commissions, universities and its officers, officials,
agents, and employees as an additional insured under the liability coverages. The
exposures presented as a result of purchasing such commodities are minimal; however,
following are a few exceptions:
• Purchase of products that will be resold or distributed directly to the public. In this
situation, the State of Arizona has a substantial product liability exposure and,
therefore, the Indemnification Language and Insurance Requirements will be
somewhat different. Contact State Risk for assistance in developing the
appropriate insurance language for this type of commodity purchase contract.
• Purchase and installation of large equipment. When the State of Arizona
purchases highly valued equipment, e.g. compressors, generators or other
machinery, the scope of services will generally include the installation of the
equipment. This is no longer just a "commodity" purchase. The vendor's installation
of the equipment makes this more of a "service contract" and, therefore, special
insurance requirements should be included to address the exposures that are
inherent to the operations being performed. When purchasing large equipment and
machinery that will be installed in State of Arizona facilities, refer to Purchase and
Install Equipment in this manual for information about the appropriate
Indemnification Language and Insurance Requirements to use.
• Purchase of aircraft or aircraft parts. When the State of Arizona purchases any
type of product / equipment relating to aircraft, the limit of liability for
Products/Completed Operations coverage should be increased to $10,000,000
each occurrence / $20,000,000 aggregate. Contact State Risk for more information
on developing the appropriate language.
• Purchase of hazardous materials, such as chlorine and other water treatment
chemicals, fertilizers, herbicides, and pesticides require special insurance as well
as higher limits. Refer to Master Environmental Services in this manual for more
information, or contact State Risk for assistance.
Please contact your State Risk Insurance Analyst to discuss the purchase of any
hazardous commodity/material if such purchase is to be handled via Purchase Order
without the use of a supporting master contract.
Automobile Liability should be required only if the commodity is being delivered to the
State of Arizona by the vendor. If the commodity is being shipped by common carrier,
Automobile Liability will not be required.
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 117 of 183
23.1 Indemnification Clause
To the fullest extent permitted by law, Contractor shall defend, indemnify, and hold
harmless the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees (hereinafter
referred to as “Indemnitee”) from and against any and all claims, actions, liabilities,
damages, losses, or expenses (including court costs, attorneys’ fees, and costs of
claim processing, investigation and litigation) (hereinafter referred to as “Claims”)
for bodily injury or personal injury (including death), or loss or damage to tangible
or intangible property caused, or alleged to be caused, in whole or in part, by the
negligent or willful acts or omissions of Contractor or any of its owners, officers,
directors, agents, employees or subcontractors. This indemnity includes any claim
or amount arising out of, or recovered under, the Workers’ Compensation Law or
arising out of the failure of such Contractor to conform to any federal, state, or local
law, statute, ordinance, rule, regulation, or court decree. It is the specific intention
of the parties that the Indemnitee shall, in all instances, except for Claims arising
solely from the negligent or willful acts or omissions of the Indemnitee, be
indemnified by Contractor from and against any and all claims. It is agreed that
Contractor will be responsible for primary loss investigation, defense, and
judgment costs where this indemnification is applicable. In consideration of the
award of this contract, the Contractor agrees to waive all rights of subrogation
against the State of Arizona, its officers, officials, agents, and employees for losses
arising from the work performed by the Contractor for the State of Arizona.
This indemnity shall not apply if the contractor or sub-contractor(s) is/are an
agency, board, commission or university of the State of Arizona.
23.2 Insurance Requirements
23.2.1 Contractor and subcontractors shall procure and maintain, until all of their
obligations have been discharged, including any warranty periods under
this Contract, insurance against claims for injury to persons or damage to
property arising from, or in connection with, the performance of the work
hereunder by the Contractor, its agents, representatives, employees or
subcontractors.
23.2.2 The Insurance Requirements herein are minimum requirements for this
Contract and in no way limit the indemnity covenants contained in this
Contract. The State of Arizona in no way warrants that the minimum limits
contained herein are sufficient to protect the Contractor from liabilities that
arise out of the performance of the work under this Contract by the
Contractor, its agents, representatives, employees or subcontractors, and
the Contractor is free to purchase additional insurance.
23.3 Minimum Scope and Limits of Insurance
Contractor shall provide coverage with limits of liability not less than those stated
below.
23.3.1 Commercial General Liability (CGL) – Occurrence Form
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 118 of 183
Policy shall include bodily injury, property damage, and broad form
contractual liability coverage.
• General Aggregate $2,000,000
• Products – Completed Operations Aggregate $1,000,000
• Personal and Advertising Injury $1,000,000
• Damage to Rented Premises $50,000
• Each Occurrence $1,000,000
a. The policy shall be endorsed, as required by this written agreement,
to include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees
as additional insureds with respect to liability arising out of the
activities performed by or on behalf of the Contractor.
b. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
23.3.2 Business Automobile Liability
Bodily Injury and Property Damage for any owned, hired, and/or non-
owned automobiles used in the performance of this Contract.
• Combined Single Limit (CSL) $1,000,000
a. Policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees
as additional insureds with respect to liability arising out of the
activities performed by, or on behalf of, the Contractor involving
automobiles owned, hired and/or non-owned by the Contractor.
b. Policy shall contain a waiver of subrogation endorsement as required
by this written agreement in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
23.3.3 Workers’ Compensation and Employers' Liability
• Workers' Compensation Statutory
• Employers' Liability
o Each Accident $1,000,000
o Disease – Each Employee $1,000,000
o Disease – Policy Limit $1,000,000
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 119 of 183
a. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
b. This requirement shall not apply to each Contractor or subcontractor
that is exempt under A.R.S. § 23-901, and when such Contractor or
subcontractor executes the appropriate waiver form (Sole Proprietor
or Independent Contractor).
23.4 Additional Insurance Requirements
The policies shall include, or be endorsed to include, as required by this written
agreement, the following provisions:
23.4.1 The Contractor's policies, as applicable, shall stipulate that the insurance
afforded the Contractor shall be primary and that any insurance carried by
the Department, its agents, officials, employees or the State of Arizona
shall be excess and not contributory insurance, as provided by A.R.S. §
41-621 (E).
23.4.2 Insurance provided by the Contractor shall not limit the Contractor’s liability
assumed under the indemnification provisions of this Contract.
23.5 Notice of Cancellation
Applicable to all insurance policies required within the Insurance Requirements of
this Contract, Contractor’s insurance shall not be permitted to expire, be
suspended, be canceled, or be materially changed for any reason without thirty
(30) days prior written notice to the State of Arizona. Within two (2) business days
of receipt, Contractor must provide notice to the State of Arizona if they receive
notice of a policy that has been or will be suspended, canceled, materially changed
for any reason, has expired, or will be expiring. Such notice shall be sent directly
to the Department and shall be mailed, emailed, hand delivered or sent by
facsimile transmission to (State Representative’s Name, Address & Fax Number).
23.6 Acceptability of Insurers
Contractor’s insurance shall be placed with companies licensed in the State of
Arizona or hold approved non-admitted status on the Arizona Department of
Insurance List of Qualified Unauthorized Insurers. Insurers shall have an “A.M.
Best” rating of not less than A- VII. The State of Arizona in no way warrants that
the above-required minimum insurer rating is sufficient to protect the Contractor
from potential insurer insolvency.
23.7 Verification of Coverage
Contractor shall furnish the State of Arizona with certificates of insurance (valid
ACORD form or equivalent approved by the State of Arizona) evidencing that
Contractor has the insurance as required by this Contract. An authorized
representative of the insurer shall sign the certificates.
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Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 120 of 183
23.7.1 All such certificates of insurance and policy endorsements must be
received by the State before work commences. The State’s receipt of any
certificates of insurance or policy endorsements that do not comply with
this written agreement shall not waive or otherwise affect the requirements
of this agreement.
23.7.2 Each insurance policy required by this Contract must be in effect at, or prior
to, commencement of work under this Contract. Failure to maintain the
insurance policies as required by this Contract, or to provide evidence of
renewal, is a material breach of contract.
23.7.3 All certificates required by this Contract shall be sent directly to the
Department. The State of Arizona project/contract number and project
description shall be noted on the certificate of insurance. The State of
Arizona reserves the right to require complete copies of all insurance
policies required by this Contract at any time.
23.8 Subcontractors
Contractor’s certificate(s) shall include all subcontractors as insureds under its
policies or Contractor shall be responsible for ensuring and/or verifying that all
subcontractors have valid and collectable insurance as evidenced by the
certificates of insurance and endorsements for each subcontractor. All coverages
for subcontractors shall be subject to the minimum Insurance Requirements
identified above. The Department reserves the right to require, at any time
throughout the life of the Contract, proof from the Contractor that its subcontractors
have the required coverage.
23.9 Approval and Modifications
The Contracting Agency, in consultation with State Risk, reserves the right to
review or make modifications to the insurance limits, required coverages, or
endorsements throughout the life of this contract, as deemed necessary. Such
action will not require a formal Contract amendment but may be made by
administrative action.
23.10 Exceptions
In the event the Contractor or subcontractor(s) is/are a public entity, then the
Insurance Requirements shall not apply. Such public entity shall provide a
certificate of self-insurance. If the Contractor or subcontractor(s) is/are a State of
Arizona agency, board, commission, or university, none of the above shall apply.
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Updated: May 8, 2018 Page 121 of 183
24. Commodity Purchase Contracts ($50,000 or under)
The requirements included in this section pertain to standard commodity purchase
contracts (e.g. stationery, office supplies, etc.). For most commodity purchases it is not
necessary, or practical, to require the vendor to include the State of Arizona, its
departments, agencies, boards, commissions, universities and its officers, officials,
agents, and employees as an additional insured under the liability coverages. The
exposures presented as a result of purchasing such commodities are minimal; however,
following are a few exceptions:
• Purchase of products that will be resold or distributed directly to the public. In this
situation, the State of Arizona has a substantial product liability exposure and,
therefore, the Indemnification Language and Insurance Requirements will be
somewhat different. Contact State Risk for assistance in developing the
appropriate insurance language for this type of commodity purchase contract.
• Purchase and installation of large equipment. When the State of Arizona
purchases highly valued equipment, e.g. compressors, generators or other
machinery, the scope of services will generally include the installation of the
equipment. This is no longer just a "commodity" purchase. The vendor's installation
of the equipment makes this more of a "service contract" and, therefore, special
insurance requirements should be included to address the exposures that are
inherent to the operations being performed. When purchasing large equipment and
machinery that will be installed in State of Arizona facilities, refer to Purchase and
Install Equipment in this manual for information about the appropriate
Indemnification Language and Insurance Requirements to use.
• Purchase of aircraft or aircraft parts. When the State of Arizona purchases any
type of product / equipment relating to aircraft, the limit of liability for
Products/Completed Operations coverage should be increased to $10,000,000
each occurrence / $20,000,000 aggregate. Contact State Risk for more information
on developing the appropriate language.
• Purchase of hazardous materials, such as chlorine and other water treatment
chemicals, fertilizers, herbicides, and pesticides require special insurance as well
as higher limits. Refer to Master Environmental Services in this manual for more
information, or contact State Risk for assistance.
Please contact your State Risk Insurance Analyst to discuss the purchase of any
hazardous commodity/material if such purchase is to be handled via Purchase Order
without the use of a supporting master contract.
Automobile Liability should be required only if the commodity is being delivered to the
State of Arizona by the vendor. If the commodity is being shipped by common carrier,
Automobile Liability will not be required.
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Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 122 of 183
24.1 Indemnification Clause
To the fullest extent permitted by law, Contractor shall defend, indemnify, and hold
harmless the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees (hereinafter
referred to as “Indemnitee”) from and against any and all claims, actions, liabilities,
damages, losses, or expenses (including court costs, attorneys’ fees, and costs of
claim processing, investigation and litigation) (hereinafter referred to as “Claims”)
for bodily injury or personal injury (including death), or loss or damage to tangible
or intangible property caused, or alleged to be caused, in whole or in part, by the
negligent or willful acts or omissions of Contractor or any of its owners, officers,
directors, agents, employees or subcontractors. This indemnity includes any claim
or amount arising out of, or recovered under, the Workers’ Compensation Law or
arising out of the failure of such Contractor to conform to any federal, state, or local
law, statute, ordinance, rule, regulation, or court decree. It is the specific intention
of the parties that the Indemnitee shall, in all instances, except for Claims arising
solely from the negligent or willful acts or omissions of the Indemnitee, be
indemnified by Contractor from and against any and all claims. It is agreed that
Contractor will be responsible for primary loss investigation, defense, and
judgment costs where this indemnification is applicable. In consideration of the
award of this contract, the Contractor agrees to waive all rights of subrogation
against the State of Arizona, its officers, officials, agents, and employees for losses
arising from the work performed by the Contractor for the State of Arizona.
This indemnity shall not apply if the contractor or sub-contractor(s) is/are an
agency, board, commission or university of the State of Arizona.
24.2 Insurance Requirements
24.2.1 Contractor and subcontractors shall procure and maintain, until all of their
obligations have been discharged, including any warranty periods under
this Contract, insurance against claims for injury to persons or damage to
property arising from, or in connection with, the performance of the work
hereunder by the Contractor, its agents, representatives, employees or
subcontractors.
24.2.2 The Insurance Requirements herein are minimum requirements for this
Contract and in no way limit the indemnity covenants contained in this
Contract. The State of Arizona in no way warrants that the minimum limits
contained herein are sufficient to protect the Contractor from liabilities that
arise out of the performance of the work under this Contract by the
Contractor, its agents, representatives, employees or subcontractors, and
the Contractor is free to purchase additional insurance.
24.3 Minimum Scope and Limits of Insurance
Contractor shall provide coverage with limits of liability not less than those stated
below.
24.3.1 Commercial General Liability (CGL) – Occurrence Form
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Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 123 of 183
Policy shall include bodily injury, property damage, and broad form
contractual liability coverage.
• General Aggregate $1,000,000
• Products – Completed Operations Aggregate $500,000
• Personal and Advertising Injury $500,000
• Damage to Rented Premises $25,000
• Each Occurrence $500,000
a. The policy shall be endorsed, as required by this written agreement,
to include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees
as additional insureds with respect to liability arising out of the
activities performed by or on behalf of the Contractor.
b. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
24.3.2 Business Automobile Liability
Bodily Injury and Property Damage for any owned, hired, and/or non-
owned automobiles used in the performance of this Contract.
• Combined Single Limit (CSL) $500,000
a. Policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees
as additional insureds with respect to liability arising out of the
activities performed by, or on behalf of, the Contractor involving
automobiles owned, hired and/or non-owned by the Contractor.
b. Policy shall contain a waiver of subrogation endorsement as required
by this written agreement in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
24.3.3 Workers’ Compensation and Employers' Liability
• Workers' Compensation Statutory
• Employers' Liability
o Each Accident $500,000
o Disease – Each Employee $500,000
o Disease – Policy Limit $500,000
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Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 124 of 183
a. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
b. This requirement shall not apply to each Contractor or subcontractor
that is exempt under A.R.S. § 23-901, and when such Contractor or
subcontractor executes the appropriate waiver form (Sole Proprietor
or Independent Contractor).
24.4 Additional Insurance Requirements
The policies shall include, or be endorsed to include, as required by this written
agreement, the following provisions:
24.4.1 The Contractor's policies, as applicable, shall stipulate that the insurance
afforded the Contractor shall be primary and that any insurance carried by
the Department, its agents, officials, employees or the State of Arizona
shall be excess and not contributory insurance, as provided by A.R.S. §
41-621 (E).
24.4.2 Insurance provided by the Contractor shall not limit the Contractor’s liability
assumed under the indemnification provisions of this Contract.
24.5 Notice of Cancellation
Applicable to all insurance policies required within the Insurance Requirements of
this Contract, Contractor’s insurance shall not be permitted to expire, be
suspended, be canceled, or be materially changed for any reason without thirty
(30) days prior written notice to the State of Arizona. Within two (2) business days
of receipt, Contractor must provide notice to the State of Arizona if they receive
notice of a policy that has been or will be suspended, canceled, materially changed
for any reason, has expired, or will be expiring. Such notice shall be sent directly
to the Department and shall be mailed, emailed, hand delivered or sent by
facsimile transmission to (State Representative’s Name, Address & Fax Number).
24.6 Acceptability of Insurers
Contractor’s insurance shall be placed with companies licensed in the State of
Arizona or hold approved non-admitted status on the Arizona Department of
Insurance List of Qualified Unauthorized Insurers. Insurers shall have an “A.M.
Best” rating of not less than A- VII. The State of Arizona in no way warrants that
the above-required minimum insurer rating is sufficient to protect the Contractor
from potential insurer insolvency.
24.7 Verification of Coverage
Contractor shall furnish the State of Arizona with certificates of insurance (valid
ACORD form or equivalent approved by the State of Arizona) evidencing that
Contractor has the insurance as required by this Contract. An authorized
representative of the insurer shall sign the certificates.
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Service Contracts (Other Than Professional Services)
Updated: May 8, 2018 Page 125 of 183
24.7.1 All such certificates of insurance and policy endorsements must be
received by the State before work commences. The State’s receipt of any
certificates of insurance or policy endorsements that do not comply with
this written agreement shall not waive or otherwise affect the requirements
of this agreement.
24.7.2 Each insurance policy required by this Contract must be in effect at, or prior
to, commencement of work under this Contract. Failure to maintain the
insurance policies as required by this Contract, or to provide evidence of
renewal, is a material breach of contract.
24.7.3 All certificates required by this Contract shall be sent directly to the
Department. The State of Arizona project/contract number and project
description shall be noted on the certificate of insurance. The State of
Arizona reserves the right to require complete copies of all insurance
policies required by this Contract at any time.
24.8 Subcontractors
Contractor’s certificate(s) shall include all subcontractors as insureds under its
policies or Contractor shall be responsible for ensuring and/or verifying that all
subcontractors have valid and collectable insurance as evidenced by the
certificates of insurance and endorsements for each subcontractor. All coverages
for subcontractors shall be subject to the minimum Insurance Requirements
identified above. The Department reserves the right to require, at any time
throughout the life of the Contract, proof from the Contractor that its subcontractors
have the required coverage.
24.9 Approval and Modifications
The Contracting Agency, in consultation with State Risk, reserves the right to
review or make modifications to the insurance limits, required coverages, or
endorsements throughout the life of this contract, as deemed necessary. Such
action will not require a formal Contract amendment but may be made by
administrative action.
24.10 Exceptions
In the event the Contractor or subcontractor(s) is/are a public entity, then the
Insurance Requirements shall not apply. Such public entity shall provide a
certificate of self-insurance. If the Contractor or subcontractor(s) is/are a State of
Arizona agency, board, commission, or university, none of the above shall apply.
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Environmental Services and Consulting
Updated: May 8, 2018 Page 126 of 183
Environmental Services and Consulting
This section includes information regarding environmental service contracts. If the scope of
services provided by the Contractor generates, transports, treats, stores, removes or disposes of
hazardous materials, petroleum products or chemicals, the Contractor is liable for damaging the
environment if an accident were to occur. Most general liability policies severely limit or exclude
liability for pollution losses. Contractor's Pollution Liability insurance is required. Any facility
disposing of or storing the hazardous material must provide Pollution Legal Liability. These
policies provide coverage for losses caused by pollution conditions that arise from the Contractor's
operations.
Following are examples of activities or services that may be included in the Contractor's scope of
services that require pollution liability insurance:
• Remediation Services
• Asbestos or Lead Abatement
• Storage of Hazardous Materials
• Disposal Site Operators
• Transporters of Hazardous Materials
• Purchase and Delivery of Hazardous Materials
• Facilities That Accept Hazardous Waste
• Environmental Engineers and Consultants
• Master Environmental Consultants (Provide Both Professional Consulting Services and
Manage the Remediation/Abatement Process)
• Certain Types of Recycling Facilities
Note: The Department of Administration, Arizona Department of Transportation, Department of
Environmental Quality, and the Universities are responsible for most environmental engineering
contracts. Please contact these agencies with questions about these types of contracts.
Contact State Risk if you have questions about the various types of insurance coverages required
for environmental services and consulting contracts.
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Environmental Services and Consulting
Updated: May 8, 2018 Page 127 of 183
25. Remediation and Abatement Services
Contractor’s Pollution Liability can be considered “moving target” coverage that is not
limited to work on specific premises. Contractors providing services are not limited to those
that include remediation services or abatement of material, hazardous or otherwise. In
fact, any contractor that performs work that has the potential to result in a pollution
condition or event doing work for the State of Arizona should include Contractor Pollution
Liability.
This type of insurance provides coverage for bodily injury, property damage and cleanup
arising from pollution conditions the Contractor creates or exacerbates a pollution
condition during work at a job site.
If the Scope of Services in this Contract requires the Contractor to accept, store or dispose
of any hazardous materials, the Contractor or the sub-contracted disposal or storage
facility shall provide this coverage.
Some examples of events and pollutants are:
• During excavation, a contractor strikes an underground water pipe that escapes
into a protected waterway
• Contractor demolishes a wall containing asbestos, the asbestos enters the HVAC
system on an operational building
• Contractors transporting or applying chemicals (pesticides/herbicides) to State
Property.
If services also include testing or consulting services, please refer to Environmental
Consulting and Testing Services.
25.1 Indemnification Clause
To the fullest extent permitted by law, Contractor shall defend, indemnify, and hold
harmless the State of Arizona, and its departments, agencies, boards,
commissions, universities, and any jurisdiction or agency issuing permits for any
work included in the project, and their respective directors, officers, officials, agents
and employees (hereinafter referred to as "Indemnitee") from and against any and
all claims, actions, liabilities, costs, losses, or expenses, (including reasonable
attorney's fees), (hereinafter collectively referred to as "Claims") arising out of
actual or alleged bodily injury or personal injury of any person (including death) or
loss or damage to tangible or intangible property caused, or alleged to be caused,
in whole or in part, by the negligent or willful acts or omissions of Contractor or any
of Contractor's directors, officers, agents, employees, volunteers or
subcontractors. This indemnity includes any claim or amount arising or recovered
under the Workers' Compensation Law or arising out of the failure of Contractor to
conform to any federal, state or local law, statute, ordinance, rule, regulation or
court decree. It is the specific intention of the parties that the Indemnitee shall, in
all instances, except for Claims arising solely from the negligent or willful acts or
omissions of the Indemnitee, be indemnified by Contractor from and against any
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Environmental Services and Consulting
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and all Claims. It is agreed that Contractor will be responsible for primary loss
investigation, defense and judgment costs where this indemnification is applicable.
This indemnification will survive the termination of the above listed contract with
the Contractor.
This indemnity shall not apply if the contractor or sub-contractor(s) is/are an
agency, board, commission or university of the State of Arizona.
25.2 Insurance Requirements
25.2.1 Contractor and subcontractors shall procure and maintain, until all of their
obligations have been discharged, including any warranty periods under
this Contract, insurance against claims for injury to persons or damage to
property arising from, or in connection with, the performance of the work
hereunder by the Contractor, its agents, representatives, employees or
subcontractors.
25.2.2 The Insurance Requirements herein are minimum requirements for this
Contract and in no way limit the indemnity covenants contained in this
Contract. The State of Arizona in no way warrants that the minimum limits
contained herein are sufficient to protect the Contractor from liabilities that
arise out of the performance of the work under this Contract by the
Contractor, its agents, representatives, employees or subcontractors, and
the Contractor is free to purchase additional insurance.
25.3 Minimum Scope and Limits of Insurance
Contractor shall provide coverage with limits of liability not less than those stated
below.
25.3.1 Commercial General Liability (CGL) – Occurrence Form
Policy shall include bodily injury, property damage, and broad form
contractual liability coverage.
• General Aggregate $2,000,000
• Products – Completed Operations Aggregate $1,000,000
• Personal and Advertising Injury $1,000,000
• Damage to Rented Premises $50,000
• Each Occurrence $1,000,000
a. The policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees as
additional insureds with respect to liability arising out of the activities
performed by or on behalf of the Contractor.
b. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work performed
by or on behalf of the Contractor.
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25.3.2 Business Automobile Liability
Bodily Injury and Property Damage for any owned, hired, and/or non-
owned automobiles used in the performance of this Contract.
• Combined Single Limit (CSL) $1,000,000
a. Policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees
as additional insureds with respect to liability arising out of the
activities performed by, or on behalf of, the Contractor involving
automobiles owned, hired and/or non-owned by the Contractor.
b. Policy shall contain a waiver of subrogation endorsement as required
by this written agreement in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
25.3.3 Workers’ Compensation and Employers' Liability
• Workers' Compensation Statutory
• Employers' Liability
o Each Accident $1,000,000
o Disease – Each Employee $1,000,000
o Disease – Policy Limit $1,000,000
a. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
b. This requirement shall not apply to each Contractor or subcontractor
that is exempt under A.R.S. § 23-901, and when such Contractor or
subcontractor executes the appropriate waiver form (Sole Proprietor
or Independent Contractor).
25.3.4 Professional Environmental Liability
• Each Claim $2,000,000
• Annual Aggregate $2,000,000
a. In the event that the Professional Liability insurance required by this
Contract is written on a claims-made basis, Contractor warrants that
any retroactive date under the policy shall precede the effective date of
this Contract and, either continuous coverage will be maintained, or an
extended discovery period will be exercised for a period of two (2) years
beginning at the time work under this Contract is completed.
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b. The Professional Liability insurance must include coverage for claims
of bodily injury or property damage arising out of pollution for
environmental work, asbestos, laboratory analysis and/or the
operations of a treatment plant, if required by the Scope of Services.
c. The policy shall cover professional misconduct or negligent acts for
those positions defined in the Scope of Work of this contract.
25.3.5 Contractors Pollution Liability
For losses caused by pollution conditions that arise from the operations of
the Contractor as described in the Scope of Services section of this
Contract.
• Per Occurrence $1,000,000
• General Aggregate $2,000,000
a. Coverage must be identified specific to the operations as described
in the Scope of Services in this Contract.
b. Must include coverage for pollution losses arising out of completed
operations.
c. Pollution coverage must apply to all locations utilized for the
acceptance, storage, or disposal of any hazardous materials.
d. The policy is to be written on an “occurrence” basis with no sunset
clause. In the event that the Pollution Liability insurance required by this
Contract is written on a claims-made basis, Contractor warrants that
any retroactive date under the policy shall precede the effective date of
this Contract. That either continuous coverage will be maintained, or an
extended discovery period will be exercised, for a period of ten (10)
years beginning at the time this Contract is terminated.
e. Pollution coverage must apply to all phases of the work described in
the Scope of Services in this Contract.
f. The policy shall include coverage for bodily injury, sickness, disease,
mental anguish, or shock sustained by any person, including death and
medical monitoring costs.
g. The policy shall include coverage for property damage, and physical
damage to, or destruction of, tangible property including the resulting
loss of use thereof, clean-up costs, and the loss of use of tangible
property that has not been physically damaged or destroyed including
diminution in value.
h. For losses that arise from the facility, coverage shall apply to sudden
and non-sudden pollution conditions including the discharge, dispersal,
release or escape of smoke, vapors, soot, fumes, acids, alkalis, toxic
chemicals, liquids or gases, waste materials or other irritants,
contaminants or pollutants, into or upon land, atmosphere, or any
watercourse or body of water which results in cleanup costs, bodily
injury or property damage.
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i. The policy shall include coverage for environmental damage including
physical damage to soil, surface water, ground water, plant, or animal
life, caused by pollution conditions and giving rise to cleanup costs.
j. The policy shall include defense including costs, charges and expenses
incurred in the investigation, adjustment or defense of claims for such
compensatory damages.
k. The policy shall include coverage for asbestos and lead, mold, with no
exclusions.
l. The policy shall include Non-Owned Disposal Site coverage.
m. The policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees as
additional insureds with respect to liability arising out of the activities
performed by or on behalf of the Contractor.
n. The policy shall contain a waiver of subrogation endorsement, as
required by this written agreement, in favor of the State of Arizona, and
its departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work performed
by the Contractor.
25.4 Additional Insurance Requirements
The policies shall include, or be endorsed to include, as required by this written
agreement, the following provisions:
25.4.1 The Contractor's policies, as applicable, shall stipulate that the insurance
afforded the Contractor shall be primary and that any insurance carried by
the Department, its agents, officials, employees or the State of Arizona
shall be excess and not contributory insurance, as provided by A.R.S. §
41-621 (E).
25.4.2 Insurance provided by the Contractor shall not limit the Contractor’s liability
assumed under the indemnification provisions of this Contract.
25.5 Notice of Cancellation
Applicable to all insurance policies required within the Insurance Requirements of
this Contract, Contractor’s insurance shall not be permitted to expire, be
suspended, be canceled, or be materially changed for any reason without thirty
(30) days prior written notice to the State of Arizona. Within two (2) business days
of receipt, Contractor must provide notice to the State of Arizona if they receive
notice of a policy that has been or will be suspended, canceled, materially changed
for any reason, has expired, or will be expiring. Such notice shall be sent directly
to the Department and shall be mailed, emailed, hand delivered or sent by
facsimile transmission to (State Representative’s Name, Address & Fax Number).
25.6 Acceptability of Insurers
Contractor’s insurance shall be placed with companies licensed in the State of
Arizona or hold approved non-admitted status on the Arizona Department of
Insurance List of Qualified Unauthorized Insurers. Insurers shall have an “A.M.
Best” rating of not less than A- VII. The State of Arizona in no way warrants that
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the above-required minimum insurer rating is sufficient to protect the Contractor
from potential insurer insolvency.
25.7 Verification of Coverage
Contractor shall furnish the State of Arizona with certificates of insurance (valid
ACORD form or equivalent approved by the State of Arizona) evidencing that
Contractor has the insurance as required by this Contract. An authorized
representative of the insurer shall sign the certificates.
25.7.1 All such certificates of insurance and policy endorsements must be
received by the State before work commences. The State’s receipt of any
certificates of insurance or policy endorsements that do not comply with
this written agreement shall not waive or otherwise affect the requirements
of this agreement.
25.7.2 Each insurance policy required by this Contract must be in effect at, or prior
to, commencement of work under this Contract. Failure to maintain the
insurance policies as required by this Contract, or to provide evidence of
renewal, is a material breach of contract.
25.7.3 All certificates required by this Contract shall be sent directly to the
Department. The State of Arizona project/contract number and project
description shall be noted on the certificate of insurance. The State of
Arizona reserves the right to require complete copies of all insurance
policies required by this Contract at any time.
25.8 Subcontractors
Contractor’s certificate(s) shall include all subcontractors as insureds under its
policies or Contractor shall be responsible for ensuring and/or verifying that all
subcontractors have valid and collectable insurance as evidenced by the
certificates of insurance and endorsements for each subcontractor. All coverages
for subcontractors shall be subject to the minimum Insurance Requirements
identified above. The Department reserves the right to require, at any time
throughout the life of this contract, proof from the Contractor that its subcontractors
have the required coverage.
25.9 Approval and Modifications
The Contracting Agency, in consultation with State Risk, reserves the right to
review or make modifications to the insurance limits, required coverages, or
endorsements throughout the life of this contract, as deemed necessary. Such
action will not require a formal Contract amendment but may be made by
administrative action.
25.10 Exceptions
In the event the Contractor or subcontractor(s) is/are a public entity, then the
Insurance Requirements shall not apply. Such public entity shall provide a
certificate of self-insurance. If the Contractor or subcontractor(s) is/are a State of
Arizona agency, board, commission, or university, none of the above shall apply.
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Arizona Contracts
Environmental Services and Consulting
Updated: May 8, 2018 Page 133 of 183
For losses caused by pollution conditions that arise from the operations of the Contractor
as described in the Scope of Services section of this Contract.
25.11 Pollution Legal Liability
• Per Occurrence $1,000,000
• General Aggregate $2,000,000
a. Coverage must be specific to the operations as described in the Scope
of Services in this Contract.
b. Must include coverage for pollution losses arising out of completed
operations.
c. Pollution coverage must apply to all locations utilized for the
acceptance, storage, or disposal of any hazardous materials.
d. The policy is to be written on an “occurrence” basis with no sunset
clause. In the event that the Pollution Liability insurance required by this
Contract is written on a claims-made basis, Contractor warrants that
any retroactive date under the policy shall precede the effective date of
this Contract. That either continuous coverage will be maintained, or an
extended discovery period will be exercised, for a period of ten (10)
years beginning at the time this Contract is terminated.
e. Pollution coverage must apply to all phases of the work described in
the Scope of Services in this Contract.
f. The policy shall include coverage for bodily injury, sickness, disease,
mental anguish, or shock sustained by any person, including death and
medical monitoring costs.
g. The policy shall include coverage for property damage, and physical
damage to, or destruction of, tangible property including the resulting
loss of use thereof, clean-up costs, and the loss of use of tangible
property that has not been physically damaged or destroyed including
diminution in value.
h. For losses that arise from the facility, coverage shall apply to sudden
and non-sudden pollution conditions including the discharge, dispersal,
release or escape of smoke, vapors, soot, fumes, acids, alkalis, toxic
chemicals, liquids or gases, waste materials or other irritants,
contaminants or pollutants, into or upon land, atmosphere, or any
watercourse or body of water which results in cleanup costs, bodily
injury or property damage.
i. The policy shall include coverage for environmental damage including
physical damage to soil, surface water, ground water, plant, or animal
life, caused by pollution conditions and giving rise to cleanup costs.
j. The policy shall include defense including costs, charges and expenses
incurred in the investigation, adjustment or defense of claims for such
compensatory damages.
k. The policy shall include coverage for asbestos and lead, mold, with no
exclusions.
l. The policy shall include Non-Owned Disposal Site coverage.
m. The policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Environmental Services and Consulting
Updated: May 8, 2018 Page 134 of 183
commissions, universities, officers, officials, agents, and employees as
additional insureds with respect to liability arising out of the activities
performed by or on behalf of the Contractor.
n. The policy shall contain a waiver of subrogation endorsement, as
required by this written agreement, in favor of the State of Arizona, and
its departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work performed
by the Contractor.
The following is only applicable to Contractor’s treating, storing or disposing of State
generated Hazardous Waste at a separate facility:
25.12 Treatment, Storage or Disposal of Hazardous Wastes
Contractor shall furnish an insurance certificate from the designated disposal
facility establishing that the facility operator maintains current Pollution Legal
Liability Insurance in the amount of not less than $10,000,000 per occurrence /
annual aggregate, and will cover sudden and gradual pollution losses arising from
the facility, associated with work performed under this agreement.
25.12.1 For pollution losses arising from the insured facility, coverage shall apply
to sudden and gradual pollution conditions including the discharge,
dispersal, release or escape of smoke, vapors, soot, fumes, acids, alkalis,
toxic chemicals, liquids or gases, waste materials or other irritants,
contaminants or pollutants into or upon land, the atmosphere or any
watercourse or body of water, which results in Bodily Injury or Property
Damage.
The policy shall also include the following coverages:
25.12.2 Bodily injury, sickness, disease, mental anguish, or shock sustained by
any person, including death and medical monitoring costs.
25.12.3 Property damage, including physical injury to or destruction of tangible
property, including the resulting loss of use thereof, clean-up costs, and
the loss of use of tangible property that has not been physically injured
or destroyed and diminution in value.
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Environmental Services and Consulting
Updated: May 8, 2018 Page 135 of 183
26. Disposal / Recycling / Storage Facilities
The State of Arizona may enter into a contract with facilities that handle or store hazardous
waste or materials. These operations include, but are not limited to:
• Facilities That Store Hazardous Materials
• Facilities That Accept Hazardous Waste
• Disposal Site Operators
• Certain Types Of Recycling Facilities That Recycle Metals, Lead-Acid Batteries,
Used Oil, Etc.
These types of operations require special liability insurance called Pollution Legal Liability.
This insurance is designed to cover bodily injury, property damage and cleanup costs
arising from pollution claims resulting from the Contractor's operations. The sample
requirements that follow include this special insurance in the requirements.
26.1 Indemnification Clause
To the fullest extent permitted by law, Contractor shall defend, indemnify, and hold
harmless the State of Arizona, and its departments, agencies, boards,
commissions, universities, and any jurisdiction or agency issuing permits for any
work included in the project, and their respective directors, officers, officials, agents
and employees (hereinafter referred to as "Indemnitee") from and against any and
all claims, actions, liabilities, costs, losses, or expenses, (including reasonable
attorney's fees), (hereinafter collectively referred to as "Claims") arising out of
actual or alleged bodily injury or personal injury of any person (including death) or
loss or damage to tangible or intangible property caused, or alleged to be caused,
in whole or in part, by the negligent or willful acts or omissions of Contractor or any
of Contractor's directors, officers, agents, employees, volunteers or
subcontractors. This indemnity includes any claim or amount arising or recovered
under the Workers' Compensation Law or arising out of the failure of Contractor to
conform to any federal, state or local law, statute, ordinance, rule, regulation or
court decree. It is the specific intention of the parties that the Indemnitee shall, in
all instances, except for Claims arising solely from the negligent or willful acts or
omissions of the Indemnitee, be indemnified by Contractor from and against any
and all Claims. It is agreed that Contractor will be responsible for primary loss
investigation, defense and judgment costs where this indemnification is applicable.
This indemnification will survive the termination of the above listed contract with
the Contractor.
This indemnity shall not apply if the contractor or sub-contractor(s) is/are an
agency, board, commission or university of the State of Arizona.
26.2 Insurance Requirements
26.2.1 Contractor and subcontractors shall procure and maintain, until all of their
obligations have been discharged, including any warranty periods under
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Environmental Services and Consulting
Updated: May 8, 2018 Page 136 of 183
this Contract, insurance against claims for injury to persons or damage to
property arising from, or in connection with, the performance of the work
hereunder by the Contractor, its agents, representatives, employees or
subcontractors.
26.2.2 The Insurance Requirements herein are minimum requirements for this
Contract and in no way limit the indemnity covenants contained in this
Contract. The State of Arizona in no way warrants that the minimum limits
contained herein are sufficient to protect the Contractor from liabilities that
arise out of the performance of the work under this Contract by the
Contractor, its agents, representatives, employees or subcontractors, and
the Contractor is free to purchase additional insurance.
26.3 Minimum Scope and Limits of Insurance
Contractor shall provide coverage with limits of liability not less than those stated
below.
26.3.1 Commercial General Liability (CGL) – Occurrence Form
Policy shall include bodily injury, property damage, and broad form
contractual liability coverage.
• General Aggregate $2,000,000
• Products – Completed Operations Aggregate $1,000,000
• Personal and Advertising Injury $1,000,000
• Damage to Rented Premises $50,000
• Each Occurrence $1,000,000
a. The policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees as
additional insureds with respect to liability arising out of the activities
performed by or on behalf of the Contractor.
b. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work performed
by or on behalf of the Contractor.
26.3.2 Business Automobile Liability
Bodily Injury and Property Damage for any owned, hired, and/or non-
owned automobiles used in the performance of this Contract.
• Combined Single Limit (CSL) $1,000,000
a. Policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Environmental Services and Consulting
Updated: May 8, 2018 Page 137 of 183
as additional insureds with respect to liability arising out of the
activities performed by, or on behalf of, the Contractor involving
automobiles owned, hired and/or non-owned by the Contractor.
b. Policy shall contain a waiver of subrogation endorsement as required
by this written agreement in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
26.3.3 Workers’ Compensation and Employers' Liability
• Workers' Compensation Statutory
• Employers' Liability
o Each Accident $1,000,000
o Disease – Each Employee $1,000,000
o Disease – Policy Limit $1,000,000
a. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
b. This requirement shall not apply to each Contractor or subcontractor
that is exempt under A.R.S. § 23-901, and when such Contractor or
subcontractor executes the appropriate waiver form (Sole Proprietor
or Independent Contractor).
26.3.4 Pollution Legal Liability
• Per Occurrence $1,000,000
• General Aggregate $2,000,000
a. Coverage must be specific to the operations as described in the Scope
of Services in this Contract.
b. Must include coverage for pollution losses arising out of completed
operations.
c. Pollution coverage must apply to all locations utilized for the
acceptance, storage, or disposal of any hazardous materials.
d. The policy is to be written on an “occurrence” basis with no sunset
clause. In the event that the Pollution Liability insurance required by this
Contract is written on a claims-made basis, Contractor warrants that
any retroactive date under the policy shall precede the effective date of
this Contract. That either continuous coverage will be maintained, or an
extended discovery period will be exercised, for a period of ten (10)
years beginning at the time this Contract is terminated.
e. Pollution coverage must apply to all phases of the work described in
the Scope of Services in this Contract.
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Environmental Services and Consulting
Updated: May 8, 2018 Page 138 of 183
f. The policy shall include coverage for bodily injury, sickness, disease,
mental anguish, or shock sustained by any person, including death and
medical monitoring costs.
g. The policy shall include coverage for property damage, and physical
damage to, or destruction of, tangible property including the resulting
loss of use thereof, clean-up costs, and the loss of use of tangible
property that has not been physically damaged or destroyed including
diminution in value.
h. For losses that arise from the facility, coverage shall apply to sudden
and non-sudden pollution conditions including the discharge, dispersal,
release or escape of smoke, vapors, soot, fumes, acids, alkalis, toxic
chemicals, liquids or gases, waste materials or other irritants,
contaminants or pollutants, into or upon land, atmosphere, or any
watercourse or body of water which results in cleanup costs, bodily
injury or property damage.
i. The policy shall include coverage for environmental damage including
physical damage to soil, surface water, ground water, plant, or animal
life, caused by pollution conditions and giving rise to cleanup costs.
j. The policy shall include defense including costs, charges and expenses
incurred in the investigation, adjustment or defense of claims for such
compensatory damages.
k. The policy shall include coverage for asbestos and lead, mold, with no
exclusions.
l. The policy shall include Non-Owned Disposal Site coverage.
m. The policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees as
additional insureds with respect to liability arising out of the activities
performed by or on behalf of the Contractor.
n. The policy shall contain a waiver of subrogation endorsement, as
required by this written agreement, in favor of the State of Arizona, and
its departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work performed
by the Contractor.
26.4 Additional Insurance Requirements
The policies shall include, or be endorsed to include, as required by this written
agreement, the following provisions:
26.4.1 The Contractor's policies, as applicable, shall stipulate that the insurance
afforded the Contractor shall be primary and that any insurance carried by
the Department, its agents, officials, employees or the State of Arizona
shall be excess and not contributory insurance, as provided by A.R.S. §
41-621 (E).
26.4.2 Insurance provided by the Contractor shall not limit the Contractor’s liability
assumed under the indemnification provisions of this Contract.
26.5 Notice of Cancellation
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Environmental Services and Consulting
Updated: May 8, 2018 Page 139 of 183
Applicable to all insurance policies required within the Insurance Requirements of
this Contract, Contractor’s insurance shall not be permitted to expire, be
suspended, be canceled, or be materially changed for any reason without thirty
(30) days prior written notice to the State of Arizona. Within two (2) business days
of receipt, Contractor must provide notice to the State of Arizona if they receive
notice of a policy that has been or will be suspended, canceled, materially changed
for any reason, has expired, or will be expiring. Such notice shall be sent directly
to the Department and shall be mailed, emailed, hand delivered or sent by
facsimile transmission to (State Representative’s Name, Address & Fax Number).
26.6 Acceptability of Insurers
Contractor’s insurance shall be placed with companies licensed in the State of
Arizona or hold approved non-admitted status on the Arizona Department of
Insurance List of Qualified Unauthorized Insurers. Insurers shall have an “A.M.
Best” rating of not less than A- VII. The State of Arizona in no way warrants that
the above-required minimum insurer rating is sufficient to protect the Contractor
from potential insurer insolvency.
26.7 Verification of Coverage
Contractor shall furnish the State of Arizona with certificates of insurance (valid
ACORD form or equivalent approved by the State of Arizona) evidencing that
Contractor has the insurance as required by this Contract. An authorized
representative of the insurer shall sign the certificates.
26.7.1 All such certificates of insurance and policy endorsements must be
received by the State before work commences. The State’s receipt of any
certificates of insurance or policy endorsements that do not comply with
this written agreement shall not waive or otherwise affect the requirements
of this agreement.
26.7.2 Each insurance policy required by this Contract must be in effect at, or prior
to, commencement of work under this Contract. Failure to maintain the
insurance policies as required by this Contract, or to provide evidence of
renewal, is a material breach of contract.
26.7.3 All certificates required by this Contract shall be sent directly to the
Department. The State of Arizona project/contract number and project
description shall be noted on the certificate of insurance. The State of
Arizona reserves the right to require complete copies of all insurance
policies required by this Contract at any time.
26.8 Subcontractors
Contractor’s certificate(s) shall include all subcontractors as insureds under its
policies or Contractor shall be responsible for ensuring and/or verifying that all
subcontractors have valid and collectable insurance as evidenced by the
certificates of insurance and endorsements for each subcontractor. All coverages
for subcontractors shall be subject to the minimum Insurance Requirements
identified above. The Department reserves the right to require, at any time
throughout the life of this contract, proof from the Contractor that its subcontractors
have the required coverage.
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Environmental Services and Consulting
Updated: May 8, 2018 Page 140 of 183
26.9 Approval and Modifications
The Contracting Agency, in consultation with State Risk, reserves the right to
review or make modifications to the insurance limits, required coverages, or
endorsements throughout the life of this contract, as deemed necessary. Such
action will not require a formal Contract amendment but may be made by
administrative action.
26.10 Exceptions
In the event the Contractor or subcontractor(s) is/are a public entity, then the
Insurance Requirements shall not apply. Such public entity shall provide a
certificate of self-insurance. If the Contractor or subcontractor(s) is/are a State of
Arizona agency, board, commission, or university, none of the above shall apply.
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Environmental Services and Consulting
Updated: May 8, 2018 Page 141 of 183
27. Environmental Consulting And Testing Services
Some pollution claims arise from services that are performed by environmental
"professionals." If the scope of services in the contract includes activities such as the
following, the insurance requirements in this section should be included:
• Consulting on environmental issues
• Architects or engineers involved in environmental projects
• Testing for materials or air quality for pollutants or other hazardous materials of
any kind
These contractors provide a "professional service" which could result in a claim alleging
damage to the environment or injury to the public. Therefore, the requirements should
include a requirement for Environmental Liability insurance, which is normally excluded in
a standard Professional Liability insurance policy.
27.1 Indemnification Clause
To the fullest extent permitted by law, Contractor shall defend, indemnify, and hold
harmless the State of Arizona, and its departments, agencies, boards,
commissions, universities, and any jurisdiction or agency issuing permits for any
work included in the project, and their respective directors, officers, officials, agents
and employees (hereinafter referred to as "Indemnitee") from and against any and
all claims, actions, liabilities, costs, losses, or expenses, (including reasonable
attorney's fees), (hereinafter collectively referred to as "Claims") arising out of
actual or alleged bodily injury or personal injury of any person (including death) or
loss or damage to tangible or intangible property caused, or alleged to be caused,
in whole or in part, by the negligent or willful acts or omissions of Contractor or any
of Contractor's directors, officers, agents, employees, volunteers or
subcontractors. This indemnity includes any claim or amount arising or recovered
under the Workers' Compensation Law or arising out of the failure of Contractor to
conform to any federal, state or local law, statute, ordinance, rule, regulation or
court decree. It is the specific intention of the parties that the Indemnitee shall, in
all instances, except for Claims arising solely from the negligent or willful acts or
omissions of the Indemnitee, be indemnified by Contractor from and against any
and all Claims. It is agreed that Contractor will be responsible for primary loss
investigation, defense and judgment costs where this indemnification is applicable.
This indemnification will survive the termination of the above listed contract with
the Contractor.
This indemnity shall not apply if the contractor or sub-contractor(s) is/are an
agency, board, commission or university of the State of Arizona.
27.2 Insurance Requirements
27.2.1 Contractor and subcontractors shall procure and maintain, until all of their
obligations have been discharged, including any warranty periods under
this Contract, insurance against claims for injury to persons or damage to
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Environmental Services and Consulting
Updated: May 8, 2018 Page 142 of 183
property arising from, or in connection with, the performance of the work
hereunder by the Contractor, its agents, representatives, employees or
subcontractors.
27.2.2 The Insurance Requirements herein are minimum requirements for this
Contract and in no way limit the indemnity covenants contained in this
Contract. The State of Arizona in no way warrants that the minimum limits
contained herein are sufficient to protect the Contractor from liabilities that
arise out of the performance of the work under this Contract by the
Contractor, its agents, representatives, employees or subcontractors, and
the Contractor is free to purchase additional insurance.
27.3 Minimum Scope and Limits of Insurance
Contractor shall provide coverage with limits of liability not less than those stated
below.
27.3.1 Commercial General Liability (CGL) – Occurrence Form
Policy shall include bodily injury, property damage, and broad form
contractual liability coverage.
• General Aggregate $2,000,000
• Products – Completed Operations Aggregate $1,000,000
• Personal and Advertising Injury $1,000,000
• Damage to Rented Premises $50,000
• Each Occurrence $1,000,000
a. The policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees as
additional insureds with respect to liability arising out of the activities
performed by or on behalf of the Contractor.
b. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work performed
by or on behalf of the Contractor.
27.3.2 Business Automobile Liability
Bodily Injury and Property Damage for any owned, hired, and/or non-
owned automobiles used in the performance of this Contract.
• Combined Single Limit (CSL) $1,000,000
a. Policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees
as additional insureds with respect to liability arising out of the
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Environmental Services and Consulting
Updated: May 8, 2018 Page 143 of 183
activities performed by, or on behalf of, the Contractor involving
automobiles owned, hired and/or non-owned by the Contractor.
b. Policy shall contain a waiver of subrogation endorsement as required
by this written agreement in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
27.3.3 Workers’ Compensation and Employers' Liability
• Workers' Compensation Statutory
• Employers' Liability
o Each Accident $1,000,000
o Disease – Each Employee $1,000,000
o Disease – Policy Limit $1,000,000
a. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
b. This requirement shall not apply to each Contractor or subcontractor
that is exempt under A.R.S. § 23-901, and when such Contractor or
subcontractor executes the appropriate waiver form (Sole Proprietor
or Independent Contractor).
27.3.4 Professional Environmental Liability
• Each Claim $2,000,000
• Annual Aggregate $2,000,000
a. In the event that the Professional Liability insurance required by this
Contract is written on a claims-made basis, Contractor warrants that
any retroactive date under the policy shall precede the effective date of
this Contract and, either continuous coverage will be maintained, or an
extended discovery period will be exercised for a period of two (2) years
beginning at the time work under this Contract is completed.
b. The Professional Liability insurance must include coverage for claims
of bodily injury or property damage arising out of pollution for
environmental work, asbestos, laboratory analysis and/or the
operations of a treatment plant, if required by the Scope of Services.
c. The policy shall cover professional misconduct or negligent acts for
those positions defined in the Scope of Work of this contract.
27.4 Additional Insurance Requirements
The policies shall include, or be endorsed to include, as required by this written
agreement, the following provisions:
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Environmental Services and Consulting
Updated: May 8, 2018 Page 144 of 183
27.4.1 The Contractor's policies, as applicable, shall stipulate that the insurance
afforded the Contractor shall be primary and that any insurance carried by
the Department, its agents, officials, employees or the State of Arizona
shall be excess and not contributory insurance, as provided by A.R.S. §
41-621 (E).
27.4.2 Insurance provided by the Contractor shall not limit the Contractor’s liability
assumed under the indemnification provisions of this Contract.
27.5 Notice of Cancellation
Applicable to all insurance policies required within the Insurance Requirements of
this Contract, Contractor’s insurance shall not be permitted to expire, be
suspended, be canceled, or be materially changed for any reason without thirty
(30) days prior written notice to the State of Arizona. Within two (2) business days
of receipt, Contractor must provide notice to the State of Arizona if they receive
notice of a policy that has been or will be suspended, canceled, materially changed
for any reason, has expired, or will be expiring. Such notice shall be sent directly
to the Department and shall be mailed, emailed, hand delivered or sent by
facsimile transmission to (State Representative’s Name, Address & Fax Number).
27.6 Acceptability of Insurers
Contractor’s insurance shall be placed with companies licensed in the State of
Arizona or hold approved non-admitted status on the Arizona Department of
Insurance List of Qualified Unauthorized Insurers. Insurers shall have an “A.M.
Best” rating of not less than A- VII. The State of Arizona in no way warrants that
the above-required minimum insurer rating is sufficient to protect the Contractor
from potential insurer insolvency.
27.7 Verification of Coverage
Contractor shall furnish the State of Arizona with certificates of insurance (valid
ACORD form or equivalent approved by the State of Arizona) evidencing that
Contractor has the insurance as required by this Contract. An authorized
representative of the insurer shall sign the certificates.
27.7.1 All such certificates of insurance and policy endorsements must be
received by the State before work commences. The State’s receipt of any
certificates of insurance or policy endorsements that do not comply with
this written agreement shall not waive or otherwise affect the requirements
of this agreement.
27.7.2 Each insurance policy required by this Contract must be in effect at, or prior
to, commencement of work under this Contract. Failure to maintain the
insurance policies as required by this Contract, or to provide evidence of
renewal, is a material breach of contract.
27.7.3 All certificates required by this Contract shall be sent directly to the
Department. The State of Arizona project/contract number and project
description shall be noted on the certificate of insurance. The State of
Arizona reserves the right to require complete copies of all insurance
policies required by this Contract at any time.
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Environmental Services and Consulting
Updated: May 8, 2018 Page 145 of 183
27.8 Subcontractors
Contractor’s certificate(s) shall include all subcontractors as insureds under its
policies or Contractor shall be responsible for ensuring and/or verifying that all
subcontractors have valid and collectable insurance as evidenced by the
certificates of insurance and endorsements for each subcontractor. All coverages
for subcontractors shall be subject to the minimum Insurance Requirements
identified above. The Department reserves the right to require, at any time
throughout the life of this contract, proof from the Contractor that its subcontractors
have the required coverage.
27.9 Approval and Modifications
The Contracting Agency, in consultation with State Risk, reserves the right to
review or make modifications to the insurance limits, required coverages, or
endorsements throughout the life of this contract, as deemed necessary. Such
action will not require a formal Contract amendment but may be made by
administrative action.
27.10 Exceptions
In the event the Contractor or subcontractor(s) is/are a public entity, then the
Insurance Requirements shall not apply. Such public entity shall provide a
certificate of self-insurance. If the Contractor or subcontractor(s) is/are a State of
Arizona agency, board, commission, or university, none of the above shall apply.
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Environmental Services and Consulting
Updated: May 8, 2018 Page 146 of 183
28. Master Environmental Services
You may find that some contractors will provide all services required under a large
environmental contract. Master environmental service contracts can require the
Contractor to provide a variety of environment-related services; i.e. testing for pollutants
and air quality, environmental consulting services and remediation or abatement services
(removal of the hazardous material), including transporting hazardous materials,
petroleum products or chemicals.
Therefore, the Contractor is required to provide a variety of coverages that will address
the entire scope of services of the contract. The sample requirements that follow address
the various insurance coverages required from a master environmental contract that
involves all of these activities.
28.1 Indemnification Clause
To the fullest extent permitted by law, Contractor shall defend, indemnify, and hold
harmless the State of Arizona, and its departments, agencies, boards,
commissions, universities, and any jurisdiction or agency issuing permits for any
work included in the project, and their respective directors, officers, officials, agents
and employees (hereinafter referred to as "Indemnitee") from and against any and
all claims, actions, liabilities, costs, losses, or expenses, (including reasonable
attorney's fees), (hereinafter collectively referred to as "Claims") arising out of
actual or alleged bodily injury or personal injury of any person (including death) or
loss or damage to tangible or intangible property caused, or alleged to be caused,
in whole or in part, by the negligent or willful acts or omissions of Contractor or any
of Contractor's directors, officers, agents, employees, volunteers or
subcontractors. This indemnity includes any claim or amount arising or recovered
under the Workers' Compensation Law or arising out of the failure of Contractor to
conform to any federal, state or local law, statute, ordinance, rule, regulation or
court decree. It is the specific intention of the parties that the Indemnitee shall, in
all instances, except for Claims arising solely from the negligent or willful acts or
omissions of the Indemnitee, be indemnified by Contractor from and against any
and all Claims. It is agreed that Contractor will be responsible for primary loss
investigation, defense and judgment costs where this indemnification is applicable.
This indemnification will survive the termination of the above listed contract with
the Contractor.
This indemnity shall not apply if the contractor or sub-contractor(s) is/are an
agency, board, commission or university of the State of Arizona.
28.2 Insurance Requirements
28.2.1 Contractor and subcontractors shall procure and maintain, until all of their
obligations have been discharged, including any warranty periods under
this Contract, insurance against claims for injury to persons or damage to
property arising from, or in connection with, the performance of the work
hereunder by the Contractor, its agents, representatives, employees or
subcontractors.
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Arizona Contracts
Environmental Services and Consulting
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28.2.2 The Insurance Requirements herein are minimum requirements for this
Contract and in no way limit the indemnity covenants contained in this
Contract. The State of Arizona in no way warrants that the minimum limits
contained herein are sufficient to protect the Contractor from liabilities that
arise out of the performance of the work under this Contract by the
Contractor, its agents, representatives, employees or subcontractors, and
the Contractor is free to purchase additional insurance.
28.3 Minimum Scope and Limits of Insurance
Contractor shall provide coverage with limits of liability not less than those stated
below.
28.3.1 Commercial General Liability (CGL) – Occurrence Form
Policy shall include bodily injury, property damage, and broad form
contractual liability coverage.
• General Aggregate $2,000,000
• Products – Completed Operations Aggregate $1,000,000
• Personal and Advertising Injury $1,000,000
• Damage to Rented Premises $50,000
• Each Occurrence $1,000,000
a. The policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees as
additional insureds with respect to liability arising out of the activities
performed by or on behalf of the Contractor.
b. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work performed
by or on behalf of the Contractor.
28.3.2 Business Automobile Liability
Bodily Injury and Property Damage for any owned, hired, and/or non-
owned automobiles used in the performance of this Contract.
• Combined Single Limit (CSL) $1,000,000
a. Policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees
as additional insureds with respect to liability arising out of the
activities performed by, or on behalf of, the Contractor involving
automobiles owned, hired and/or non-owned by the Contractor.
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Environmental Services and Consulting
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b. Policy shall contain a waiver of subrogation endorsement as required
by this written agreement in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
28.3.3 Workers’ Compensation and Employers' Liability
• Workers' Compensation Statutory
• Employers' Liability
o Each Accident $1,000,000
o Disease – Each Employee $1,000,000
o Disease – Policy Limit $1,000,000
a. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
b. This requirement shall not apply to each Contractor or subcontractor
that is exempt under A.R.S. § 23-901, and when such Contractor or
subcontractor executes the appropriate waiver form (Sole Proprietor
or Independent Contractor).
28.3.4 Professional Environmental Liability
• Each Claim $2,000,000
• Annual Aggregate $2,000,000
a. In the event that the Professional Liability insurance required by this
Contract is written on a claims-made basis, Contractor warrants that
any retroactive date under the policy shall precede the effective date of
this Contract and, either continuous coverage will be maintained, or an
extended discovery period will be exercised for a period of two (2) years
beginning at the time work under this Contract is completed.
b. The Professional Liability insurance must include coverage for claims
of bodily injury or property damage arising out of pollution for
environmental work, asbestos, laboratory analysis and/or the
operations of a treatment plant, if required by the Scope of Services.
c. The policy shall cover professional misconduct or negligent acts for
those positions defined in the Scope of Work of this contract.
28.3.5 Contractors Pollution Liability
• Per Occurrence $1,000,000
• General Aggregate $2,000,000
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Environmental Services and Consulting
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a. Coverage must be identified specific to the operations as described
in the Scope of Services in this Contract.
b. Must include coverage for pollution losses arising out of completed
operations.
c. The policy is to be written on an “occurrence” basis with no sunset
clause. In the event that the Pollution Liability insurance required by this
Contract is written on a claims-made basis, Contractor warrants that
any retroactive date under the policy shall precede the effective date of
this Contract. That either continuous coverage will be maintained, or an
extended discovery period will be exercised, for a period of ten (10)
years beginning at the time this Contract is terminated.
d. Pollution coverage must apply to all phases of the work described in
the Scope of Services in this Contract.
e. The policy shall include coverage for bodily injury, sickness, disease,
mental anguish, or shock sustained by any person, including death and
medical monitoring costs.
f. The policy shall include coverage for property damage, and physical
damage to, or destruction of, tangible property including the resulting
loss of use thereof, clean-up costs, and the loss of use of tangible
property that has not been physically damaged or destroyed including
diminution in value.
g. The policy shall include coverage for environmental damage including
physical damage to soil, surface water, ground water, plant, or animal
life, caused by pollution conditions and giving rise to cleanup costs.
h. The policy shall include defense including costs, charges and expenses
incurred in the investigation, adjustment or defense of claims for such
compensatory damages.
i. The policy shall include coverage for asbestos and lead, mold, with no
exclusions.
j. The policy shall include Non-Owned Disposal Site coverage.
k. The policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees as
additional insureds with respect to liability arising out of the activities
performed by or on behalf of the Contractor.
l. The policy shall contain a waiver of subrogation endorsement, as
required by this written agreement, in favor of the State of Arizona, and
its departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work performed
by the Contractor
28.4 Additional Insurance Requirements
The policies shall include, or be endorsed to include, as required by this written
agreement, the following provisions:
28.4.1 The Contractor's policies, as applicable, shall stipulate that the insurance
afforded the Contractor shall be primary and that any insurance carried by
the Department, its agents, officials, employees or the State of Arizona
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Arizona Contracts
Environmental Services and Consulting
Updated: May 8, 2018 Page 150 of 183
shall be excess and not contributory insurance, as provided by A.R.S. §
41-621 (E).
28.4.2 Insurance provided by the Contractor shall not limit the Contractor’s liability
assumed under the indemnification provisions of this Contract.
28.5 Notice of Cancellation
Applicable to all insurance policies required within the Insurance Requirements of
this Contract, Contractor’s insurance shall not be permitted to expire, be
suspended, be canceled, or be materially changed for any reason without thirty
(30) days prior written notice to the State of Arizona. Within two (2) business days
of receipt, Contractor must provide notice to the State of Arizona if they receive
notice of a policy that has been or will be suspended, canceled, materially changed
for any reason, has expired, or will be expiring. Such notice shall be sent directly
to the Department and shall be mailed, emailed, hand delivered or sent by
facsimile transmission to (State Representative’s Name, Address & Fax Number).
28.6 Acceptability of Insurers
Contractor’s insurance shall be placed with companies licensed in the State of
Arizona or hold approved non-admitted status on the Arizona Department of
Insurance List of Qualified Unauthorized Insurers. Insurers shall have an “A.M.
Best” rating of not less than A- VII. The State of Arizona in no way warrants that
the above-required minimum insurer rating is sufficient to protect the Contractor
from potential insurer insolvency.
28.7 Verification of Coverage
Contractor shall furnish the State of Arizona with certificates of insurance (valid
ACORD form or equivalent approved by the State of Arizona) evidencing that
Contractor has the insurance as required by this Contract. An authorized
representative of the insurer shall sign the certificates.
28.7.1 All such certificates of insurance and policy endorsements must be
received by the State before work commences. The State’s receipt of any
certificates of insurance or policy endorsements that do not comply with
this written agreement shall not waive or otherwise affect the requirements
of this agreement.
28.7.2 Each insurance policy required by this Contract must be in effect at, or prior
to, commencement of work under this Contract. Failure to maintain the
insurance policies as required by this Contract, or to provide evidence of
renewal, is a material breach of contract.
28.7.3 All certificates required by this Contract shall be sent directly to the
Department. The State of Arizona project/contract number and project
description shall be noted on the certificate of insurance. The State of
Arizona reserves the right to require complete copies of all insurance
policies required by this Contract at any time.
28.8 Subcontractors
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Arizona Contracts
Environmental Services and Consulting
Updated: May 8, 2018 Page 151 of 183
Contractor’s certificate(s) shall include all subcontractors as insureds under its
policies or Contractor shall be responsible for ensuring and/or verifying that all
subcontractors have valid and collectable insurance as evidenced by the
certificates of insurance and endorsements for each subcontractor. All coverages
for subcontractors shall be subject to the minimum Insurance Requirements
identified above. The Department reserves the right to require, at any time
throughout the life of this contract, proof from the Contractor that its subcontractors
have the required coverage.
28.9 Approval and Modifications
The Contracting Agency, in consultation with State Risk, reserves the right to
review or make modifications to the insurance limits, required coverages, or
endorsements throughout the life of this contract, as deemed necessary. Such
action will not require a formal Contract amendment but may be made by
administrative action.
28.10 Exceptions
In the event the Contractor or subcontractor(s) is/are a public entity, then the
Insurance Requirements shall not apply. Such public entity shall provide a
certificate of self-insurance. If the Contractor or subcontractor(s) is/are a State of
Arizona agency, board, commission, or university, none of the above shall apply.
.
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Arizona Contracts
Environmental Services and Consulting
Updated: May 8, 2018 Page 152 of 183
29. Hazardous Material Hauling
The State of Arizona may enter into a contract where the scope of services includes the
transportation of pollutants. This can generally be found in contracts for the purchase and
delivery of hazardous materials. These pollutants can include, but are not limited to the
following:
• Chemicals, such as chlorine products
• Petroleum products, such as fuel
• Hazardous waste products, such as asbestos
Standard business auto liability policies do not provide coverage for pollution resulting
from a spill of any cargo carried in, towed by, or being loaded into or from the automobile.
This risk is specifically excluded under the automobile policies normally required of
contractors.
Therefore, Automobile Pollution Liability should be required from any Contractor moving
hazardous products or waste in the Contractor's vehicles.
If the scope of services in the contract address only the transportation of hazardous
materials and do not include any other operations that could affect the environment, then
the following sample requirements should be included in the contract.
29.1 Indemnification Clause
To the fullest extent permitted by law, Contractor shall defend, indemnify, and hold
harmless the State of Arizona, and its departments, agencies, boards,
commissions, universities, and any jurisdiction or agency issuing permits for any
work included in the project, and their respective directors, officers, officials, agents
and employees (hereinafter referred to as "Indemnitee") from and against any and
all claims, actions, liabilities, costs, losses, or expenses, (including reasonable
attorney's fees), (hereinafter collectively referred to as "Claims") arising out of
actual or alleged bodily injury or personal injury of any person (including death) or
loss or damage to tangible or intangible property caused, or alleged to be caused,
in whole or in part, by the negligent or willful acts or omissions of Contractor or any
of Contractor's directors, officers, agents, employees, volunteers or
subcontractors. This indemnity includes any claim or amount arising or recovered
under the Workers' Compensation Law or arising out of the failure of Contractor to
conform to any federal, state or local law, statute, ordinance, rule, regulation or
court decree. It is the specific intention of the parties that the Indemnitee shall, in
all instances, except for Claims arising solely from the negligent or willful acts or
omissions of the Indemnitee, be indemnified by Contractor from and against any
and all Claims. It is agreed that Contractor will be responsible for primary loss
investigation, defense and judgment costs where this indemnification is applicable.
This indemnification will survive the termination of the above listed contract with
the Contractor.
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Arizona Contracts
Environmental Services and Consulting
Updated: May 8, 2018 Page 153 of 183
This indemnity shall not apply if the contractor or sub-contractor(s) is/are an
agency, board, commission or university of the State of Arizona.
29.2 Insurance Requirements
29.2.1 Contractor and subcontractors shall procure and maintain, until all of their
obligations have been discharged, including any warranty periods under
this Contract, insurance against claims for injury to persons or damage to
property arising from, or in connection with, the performance of the work
hereunder by the Contractor, its agents, representatives, employees or
subcontractors.
29.2.2 The Insurance Requirements herein are minimum requirements for this
Contract and in no way limit the indemnity covenants contained in this
Contract. The State of Arizona in no way warrants that the minimum limits
contained herein are sufficient to protect the Contractor from liabilities that
arise out of the performance of the work under this Contract by the
Contractor, its agents, representatives, employees or subcontractors, and
the Contractor is free to purchase additional insurance.
29.3 Minimum Scope and Limits of Insurance
Contractor shall provide coverage with limits of liability not less than those stated
below.
29.3.1 Commercial General Liability (CGL) – Occurrence Form
Policy shall include bodily injury, property damage, and broad form
contractual liability coverage.
• General Aggregate $2,000,000
• Products – Completed Operations Aggregate $1,000,000
• Personal and Advertising Injury $1,000,000
• Damage to Rented Premises $50,000
• Each Occurrence $1,000,000
a. The policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees as
additional insureds with respect to liability arising out of the activities
performed by or on behalf of the Contractor.
b. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work performed
by or on behalf of the Contractor.
29.3.2 Business Automobile Liability
Bodily Injury and Property Damage for any owned, hired, and/or non-
owned automobiles used in the performance of this Contract.
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Arizona Contracts
Environmental Services and Consulting
Updated: May 8, 2018 Page 154 of 183
• Combined Single Limit (CSL) $5,000,000
When hazardous materials are transported, the automobile liability policy
shall include the following endorsements:
• CA 99 48 Pollution Liability-broadened coverage for covered autos
• MCS-90 (Motor Carrier Act) endorsements
a. The policy shall include Automobile Pollution Liability specific to the
transportation of hazardous materials.
b. Policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees as
additional insureds with respect to liability arising out of the activities
performed by, or on behalf of, the Contractor involving automobiles
owned, hired and/or non-owned by the Contractor.
c. Policy shall contain a waiver of subrogation endorsement as required
by this written agreement in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work performed
by or on behalf of the Contractor.
29.3.3 Workers’ Compensation and Employers' Liability
• Workers' Compensation Statutory
• Employers' Liability
o Each Accident $1,000,000
o Disease – Each Employee $1,000,000
o Disease – Policy Limit $1,000,000
a. Policy shall contain a waiver of subrogation endorsement, as
required by this written agreement, in favor of the State of
Arizona, and its departments, agencies, boards, commissions,
universities, officers, officials, agents, and employees for losses
arising from work performed by or on behalf of the Contractor.
b. This requirement shall not apply to each Contractor or
subcontractor that is exempt under A.R.S. § 23-901, and when
such Contractor or subcontractor executes the appropriate
waiver form (Sole Proprietor or Independent Contractor).
29.3.4 Contractors Pollution Liability
For losses caused by pollution conditions that arise from the operations of
the Contractor as described in the Scope of Services section of this
Contract.
• Per Occurrence $1,000,000
• General Aggregate $2,000,000
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Environmental Services and Consulting
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a. Coverage must be identified specific to the operations as described in
the Scope of Services in this Contract.
b. Must include coverage for pollution losses arising out of completed
operations.
c. The policy is to be written on an “occurrence” basis with no sunset
clause. In the event that the Pollution Liability insurance required by this
Contract is written on a claims-made basis, Contractor warrants that
any retroactive date under the policy shall precede the effective date of
this Contract. That either continuous coverage will be maintained, or an
extended discovery period will be exercised, for a period of ten (10)
years beginning at the time this Contract is terminated.
d. Pollution coverage must apply to all phases of the work described in
the Scope of Services in this Contract.
e. The policy shall include coverage for bodily injury, sickness, disease,
mental anguish, or shock sustained by any person, including death and
medical monitoring costs.
f. The policy shall include coverage for property damage, and physical
damage to, or destruction of, tangible property including the resulting
loss of use thereof, clean-up costs, and the loss of use of tangible
property that has not been physically damaged or destroyed including
diminution in value.
g. The policy shall include coverage for environmental damage including
physical damage to soil, surface water, ground water, plant, or animal
life, caused by pollution conditions and giving rise to cleanup costs.
h. The policy shall include defense including costs, charges and expenses
incurred in the investigation, adjustment or defense of claims for such
compensatory damages.
i. The policy shall include coverage for asbestos and lead, mold, with no
exclusions.
j. The policy shall include Non-Owned Disposal Site coverage.
k. The policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees as
additional insureds with respect to liability arising out of the activities
performed by or on behalf of the Contractor.
l. The policy shall contain a waiver of subrogation endorsement, as
required by this written agreement, in favor of the State of Arizona, and
its departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work performed
by the Contractor.
29.4 Additional Insurance Requirements
The policies shall include, or be endorsed to include, as required by this written
agreement, the following provisions:
29.4.1 The Contractor's policies, as applicable, shall stipulate that the insurance
afforded the Contractor shall be primary and that any insurance carried by
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Environmental Services and Consulting
Updated: May 8, 2018 Page 156 of 183
the Department, its agents, officials, employees or the State of Arizona
shall be excess and not contributory insurance, as provided by A.R.S. §
41-621 (E).
29.4.2 Insurance provided by the Contractor shall not limit the Contractor’s liability
assumed under the indemnification provisions of this Contract.
29.5 Notice of Cancellation
Applicable to all insurance policies required within the Insurance Requirements of
this Contract, Contractor’s insurance shall not be permitted to expire, be
suspended, be canceled, or be materially changed for any reason without thirty
(30) days prior written notice to the State of Arizona. Within two (2) business days
of receipt, Contractor must provide notice to the State of Arizona if they receive
notice of a policy that has been or will be suspended, canceled, materially changed
for any reason, has expired, or will be expiring. Such notice shall be sent directly
to the Department and shall be mailed, emailed, hand delivered or sent by
facsimile transmission to (State Representative’s Name, Address & Fax Number).
29.6 Acceptability of Insurers
Contractor’s insurance shall be placed with companies licensed in the State of
Arizona or hold approved non-admitted status on the Arizona Department of
Insurance List of Qualified Unauthorized Insurers. Insurers shall have an “A.M.
Best” rating of not less than A- VII. The State of Arizona in no way warrants that
the above-required minimum insurer rating is sufficient to protect the Contractor
from potential insurer insolvency.
29.7 Verification of Coverage
Contractor shall furnish the State of Arizona with certificates of insurance (valid
ACORD form or equivalent approved by the State of Arizona) evidencing that
Contractor has the insurance as required by this Contract. An authorized
representative of the insurer shall sign the certificates.
29.7.1 All such certificates of insurance and policy endorsements must be
received by the State before work commences. The State’s receipt of any
certificates of insurance or policy endorsements that do not comply with
this written agreement shall not waive or otherwise affect the requirements
of this agreement.
29.7.2 Each insurance policy required by this Contract must be in effect at, or prior
to, commencement of work under this Contract. Failure to maintain the
insurance policies as required by this Contract, or to provide evidence of
renewal, is a material breach of contract.
29.7.3 All certificates required by this Contract shall be sent directly to the
Department. The State of Arizona project/contract number and project
description shall be noted on the certificate of insurance. The State of
Arizona reserves the right to require complete copies of all insurance
policies required by this Contract at any time.
29.8 Subcontractors
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Arizona Contracts
Environmental Services and Consulting
Updated: May 8, 2018 Page 157 of 183
Contractor’s certificate(s) shall include all subcontractors as insureds under its
policies or Contractor shall be responsible for ensuring and/or verifying that all
subcontractors have valid and collectable insurance as evidenced by the
certificates of insurance and endorsements for each subcontractor. All coverages
for subcontractors shall be subject to the minimum Insurance Requirements
identified above. The Department reserves the right to require, at any time
throughout the life of this contract, proof from the Contractor that its subcontractors
have the required coverage.
29.9 Approval and Modifications
The Contracting Agency, in consultation with State Risk, reserves the right to
review or make modifications to the insurance limits, required coverages, or
endorsements throughout the life of this contract, as deemed necessary. Such
action will not require a formal Contract amendment but may be made by
administrative action.
29.10 Exceptions
In the event the Contractor or subcontractor(s) is/are a public entity, then the
Insurance Requirements shall not apply. Such public entity shall provide a
certificate of self-insurance. If the Contractor or subcontractor(s) is/are a State of
Arizona agency, board, commission, or university, none of the above shall apply.
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Arizona Contracts
Information Technology Contracts
Updated: May 8, 2018 Page 158 of 183
Information Technology Contracts
30. Technology Errors & Omissions (Tech E&O) Insurance
Technology Errors & Omissions (Tech E&O) is professional liability insurance, also known
as errors and omissions insurance, designed for technology companies. Any individual or
firm that provides technology services or products should be required to provide Tech
E&O in the event their unintended error or omission in performing services or providing
back or front-end product(s) causes a loss to a third party(s) and for which a claim is
brought against the insured and/or the State. This coverage is applicable to but is not
limited to:
• Outsourced IT providers
• Hosted solutions (web hosting, FTP hosting)
• E-mail hosting
• Data storage (cloud services)
• Backup
• SaaS tools – CRM, information governance, E-mail marketing, MDM platform
• Developers – website, marketing content
• Physical and cyber security providers
• Payment processing
• Internet service providers & other connectivity solutions
Below are a few examples of exposures to ADOA State Risk from each of the different
vendors:
• Website developers:
o Introduction of malware due to vulnerabilities in the code
• Outsourced IT director:
• Theft of sensitive or valuable information
• Outage and resultant business interruption
• Data loss and associated recovery costs
• Offsite data backup or other hosted solutions:
o Loss of company or client data that could trigger breach requirements,
reputation damage, or result in fines/penalties
• E-mail provider:
o Outage could cause a loss of revenue by decreasing productivity or
provider could be responsible for a loss of data
Depending on nature of work and the services and/or products provided by the Contractor,
additional coverage should be ascertained, i.e. in the event the Contractor will have access to any
data of a personal or confidential nature e.g., employee records, general public personal
information, health records, or financials records, Contract shall be required to include (or not
exclude) coverage for data breach, the Network Security (Cyber) and Privacy Liability coverage
in addition to this Tech E&O.
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Arizona Contracts
Information Technology Contracts
Updated: May 8, 2018 Page 159 of 183
The requirements listed below are the minimum and should in no way preclude you from requiring
higher limits based on the potential exposure to the State. Please contact State Risk Management
for guidance.
30.1 Indemnification Clause
To the fullest extent permitted by law, Contractor shall defend, indemnify, and hold
harmless the State of Arizona, and its departments, agencies, boards,
commissions, universities, and any jurisdiction or agency issuing permits for any
work included in the project, and their respective directors, officers, officials, agents
and employees (hereinafter referred to as "Indemnitee") from and against any and
all claims, actions, liabilities, costs, losses, or expenses, (including reasonable
attorney's fees), (hereinafter collectively referred to as "Claims") arising out of
actual or alleged bodily injury or personal injury of any person (including death) or
loss or damage to tangible or intangible property caused, or alleged to be caused,
in whole or in part, by the negligent or willful acts or omissions of Contractor or any
of Contractor's directors, officers, agents, employees, volunteers or
subcontractors. This indemnity includes any claim or amount arising or recovered
under the Workers' Compensation Law or arising out of the failure of Contractor to
conform to any federal, state or local law, statute, ordinance, rule, regulation or
court decree. It is the specific intention of the parties that the Indemnitee shall, in
all instances, except for Claims arising solely from the negligent or willful acts or
omissions of the Indemnitee, be indemnified by Contractor from and against any
and all Claims. It is agreed that Contractor will be responsible for primary loss
investigation, defense and judgment costs where this indemnification is applicable.
This indemnification will survive the termination of the above listed contract with
the Contractor.
This indemnity shall not apply if the contractor or sub-contractor(s) is/are an
agency, board, commission or university of the State of Arizona.
30.2 Insurance Requirements
30.2.1 Contractor and subcontractors shall procure and maintain, until all of their
obligations have been discharged, including any warranty periods under
this Contract, insurance against claims for injury to persons or damage to
property arising from, or in connection with, the performance of the work
hereunder by the Contractor, its agents, representatives, employees or
subcontractors.
30.2.2 The Insurance Requirements herein are minimum requirements for this
Contract and in no way limit the indemnity covenants contained in this
Contract. The State of Arizona in no way warrants that the minimum limits
contained herein are sufficient to protect the Contractor from liabilities that
arise out of the performance of the work under this Contract by the
Contractor, its agents, representatives, employees or subcontractors, and
the Contractor is free to purchase additional insurance.
30.3 Minimum Scope and Limits of Insurance
Contractor shall provide coverage with limits of liability not less than those stated
below.
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Arizona Contracts
Information Technology Contracts
Updated: May 8, 2018 Page 160 of 183
30.3.1 Commercial General Liability (CGL) – Occurrence Form
Policy shall include bodily injury, property damage, and broad form
contractual liability coverage.
• General Aggregate $2,000,000
• Products – Completed Operations Aggregate $1,000,000
• Personal and Advertising Injury $1,000,000
• Damage to Rented Premises $50,000
• Each Occurrence $1,000,000
a. The policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees as
additional insureds with respect to liability arising out of the activities
performed by or on behalf of the Contractor.
b. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work performed
by or on behalf of the Contractor.
30.3.2 Business Automobile Liability
Bodily Injury and Property Damage for any owned, hired, and/or non-
owned automobiles used in the performance of this Contract.
• Combined Single Limit (CSL) $1,000,000
a. Policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees as
additional insureds with respect to liability arising out of the activities
performed by, or on behalf of, the Contractor involving automobiles
owned, hired and/or non-owned by the Contractor.
b. Policy shall contain a waiver of subrogation endorsement as required
by this written agreement in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work performed
by or on behalf of the Contractor.
30.3.3 Workers’ Compensation and Employers' Liability
• Workers' Compensation Statutory
• Employers' Liability
o Each Accident $1,000,000
o Disease – Each Employee $1,000,000
o Disease – Policy Limit $1,000,000
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Arizona Contracts
Information Technology Contracts
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a. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work performed
by or on behalf of the Contractor.
b. This requirement shall not apply to each Contractor or subcontractor
that is exempt under A.R.S. § 23-901, and when such Contractor or
subcontractor executes the appropriate waiver form (Sole Proprietor or
Independent Contractor).
30.3.4 Technology Errors & Omissions Insurance
• Each Claim $2,000,000
• Annual Aggregate $2,000,000
a. Such insurance shall cover any, and all errors, omissions, or negligent
acts in the delivery of products, services, and/or licensed programs
under this contract.
b. Coverage shall include copyright infringement, infringement of trade
dress, domain name, title or slogan.
c. In the event that the Tech E&O insurance required by this Contract is
written on a claims-made basis, Contractor warrants that any
retroactive date under the policy shall precede the effective date of this
Contract and, either continuous coverage will be maintained or an
extended discovery period will be exercised for a period of two (2)
years, beginning at the time work under this Contract is completed.
30.4 Additional Insurance Requirements
The policies shall include, or be endorsed to include, as required by this written
agreement, the following provisions:
30.4.1 The Contractor's policies, as applicable, shall stipulate that the insurance
afforded the Contractor shall be primary and that any insurance carried by
the Department, its agents, officials, employees or the State of Arizona
shall be excess and not contributory insurance, as provided by A.R.S. §
41-621 (E).
30.4.2 Insurance provided by the Contractor shall not limit the Contractor’s liability
assumed under the indemnification provisions of this Contract.
30.5 Notice of Cancellation
Applicable to all insurance policies required within the Insurance Requirements of
this Contract, Contractor’s insurance shall not be permitted to expire, be
suspended, be canceled, or be materially changed for any reason without thirty
(30) days prior written notice to the State of Arizona. Within two (2) business days
of receipt, Contractor must provide notice to the State of Arizona if they receive
notice of a policy that has been or will be suspended, canceled, materially changed
for any reason, has expired, or will be expiring. Such notice shall be sent directly
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Arizona Contracts
Information Technology Contracts
Updated: May 8, 2018 Page 162 of 183
to the Department and shall be mailed, emailed, hand delivered or sent by
facsimile transmission to (State Representative’s Name, Address & Fax Number).
30.6 Acceptability of Insurers
Contractor’s insurance shall be placed with companies licensed in the State of
Arizona or hold approved non-admitted status on the Arizona Department of
Insurance List of Qualified Unauthorized Insurers. Insurers shall have an “A.M.
Best” rating of not less than A- VII. The State of Arizona in no way warrants that
the above-required minimum insurer rating is sufficient to protect the Contractor
from potential insurer insolvency.
30.7 Verification of Coverage
Contractor shall furnish the State of Arizona with certificates of insurance (valid
ACORD form or equivalent approved by the State of Arizona) evidencing that
Contractor has the insurance as required by this Contract. An authorized
representative of the insurer shall sign the certificates.
30.7.1 All such certificates of insurance and policy endorsements must be
received by the State before work commences. The State’s receipt of any
certificates of insurance or policy endorsements that do not comply with
this written agreement shall not waive or otherwise affect the requirements
of this agreement.
30.7.2 Each insurance policy required by this Contract must be in effect at, or prior
to, commencement of work under this Contract. Failure to maintain the
insurance policies as required by this Contract, or to provide evidence of
renewal, is a material breach of contract.
30.7.3 All certificates required by this Contract shall be sent directly to the
Department. The State of Arizona project/contract number and project
description shall be noted on the certificate of insurance. The State of
Arizona reserves the right to require complete copies of all insurance
policies required by this Contract at any time.
30.8 Subcontractors
Contractor’s certificate(s) shall include all subcontractors as insureds under its
policies or Contractor shall be responsible for ensuring and/or verifying that all
subcontractors have valid and collectable insurance as evidenced by the
certificates of insurance and endorsements for each subcontractor. All coverages
for subcontractors shall be subject to the minimum Insurance Requirements
identified above. The Department reserves the right to require, at any time
throughout the life of this contract, proof from the Contractor that its subcontractors
have the required coverage.
30.9 Approval and Modifications
The Contracting Agency, in consultation with State Risk, reserves the right to
review or make modifications to the insurance limits, required coverages, or
endorsements throughout the life of this contract, as deemed necessary. Such
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Arizona Contracts
Information Technology Contracts
Updated: May 8, 2018 Page 163 of 183
action will not require a formal Contract amendment but may be made by
administrative action.
30.10 Exceptions
In the event the Contractor or subcontractor(s) is/are a public entity, then the
Insurance Requirements shall not apply. Such public entity shall provide a
certificate of self-insurance. If the Contractor or subcontractor(s) is/are a State of
Arizona agency, board, commission, or university, none of the above shall apply.
Insurance and Indemnification Guidelines for State of
Arizona Contracts
Information Technology Contracts
Updated: May 8, 2018 Page 164 of 183
31. Media Liability Insurance
Media Liability coverage is a type of Errors and Omissions Liability insurance designed for
publishers, broadcasters, and other media-related services including web design and/or
marketing firms. This type of policy responds to third-party claims for personal injury, i.e.
financial loss/loss of profits, reputation damage, etc. due to both online and offline content
shared or accessible to the public. The claims made by third parties can range from libel/
slander and false advertisement to copyright infringement. It is important to note that there
are many different flavors and hence nomenclature for media liability designed for the
various types of services or products provided by the vendors. The requirements listed
below are the minimum and should in no way preclude you from requiring higher limits
depending on the potential exposure to the State. Please contact State Risk Management
for guidance.
31.1 Indemnification Clause
To the fullest extent permitted by law, Contractor shall defend, indemnify, and hold
harmless the State of Arizona, and its departments, agencies, boards,
commissions, universities, and any jurisdiction or agency issuing permits for any
work included in the project, and their respective directors, officers, officials, agents
and employees (hereinafter referred to as "Indemnitee") from and against any and
all claims, actions, liabilities, costs, losses, or expenses, (including reasonable
attorney's fees), (hereinafter collectively referred to as "Claims") arising out of
actual or alleged bodily injury or personal injury of any person (including death) or
loss or damage to tangible or intangible property caused, or alleged to be caused,
in whole or in part, by the negligent or willful acts or omissions of Contractor or any
of Contractor's directors, officers, agents, employees, volunteers or
subcontractors. This indemnity includes any claim or amount arising or recovered
under the Workers' Compensation Law or arising out of the failure of Contractor to
conform to any federal, state or local law, statute, ordinance, rule, regulation or
court decree. It is the specific intention of the parties that the Indemnitee shall, in
all instances, except for Claims arising solely from the negligent or willful acts or
omissions of the Indemnitee, be indemnified by Contractor from and against any
and all Claims. It is agreed that Contractor will be responsible for primary loss
investigation, defense and judgment costs where this indemnification is applicable.
This indemnification will survive the termination of the above listed contract with
the Contractor.
This indemnity shall not apply if the contractor or sub-contractor(s) is/are an
agency, board, commission or university of the State of Arizona.
31.2 Insurance Requirements
31.2.1 Contractor and subcontractors shall procure and maintain, until all of their
obligations have been discharged, including any warranty periods under
this Contract, insurance against claims for injury to persons or damage to
property arising from, or in connection with, the performance of the work
hereunder by the Contractor, its agents, representatives, employees or
subcontractors.
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Arizona Contracts
Information Technology Contracts
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31.2.2 The Insurance Requirements herein are minimum requirements for this
Contract and in no way limit the indemnity covenants contained in this
Contract. The State of Arizona in no way warrants that the minimum limits
contained herein are sufficient to protect the Contractor from liabilities that
arise out of the performance of the work under this Contract by the
Contractor, its agents, representatives, employees or subcontractors, and
the Contractor is free to purchase additional insurance.
31.3 Minimum Scope and Limits of Insurance
Contractor shall provide coverage with limits of liability not less than those stated
below.
31.3.1 Commercial General Liability (CGL) – Occurrence Form
Policy shall include bodily injury, property damage, and broad form
contractual liability coverage.
• General Aggregate $2,000,000
• Products – Completed Operations Aggregate $1,000,000
• Personal and Advertising Injury $1,000,000
• Damage to Rented Premises $50,000
• Each Occurrence $1,000,000
a. The policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees as
additional insureds with respect to liability arising out of the activities
performed by or on behalf of the Contractor.
b. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work performed
by or on behalf of the Contractor.
31.3.2 Business Automobile Liability
Bodily Injury and Property Damage for any owned, hired, and/or non-
owned automobiles used in the performance of this Contract.
• Combined Single Limit (CSL) $1,000,000
a. Policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees as
additional insureds with respect to liability arising out of the activities
performed by, or on behalf of, the Contractor involving automobiles
owned, hired and/or non-owned by the Contractor.
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Arizona Contracts
Information Technology Contracts
Updated: May 8, 2018 Page 166 of 183
b. Policy shall contain a waiver of subrogation endorsement as required
by this written agreement in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work performed
by or on behalf of the Contractor.
31.3.3 Workers’ Compensation and Employers' Liability
• Workers' Compensation Statutory
• Employers' Liability
o Each Accident $1,000,000
o Disease – Each Employee $1,000,000
o Disease – Policy Limit $1,000,000
a. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work performed
by or on behalf of the Contractor.
b. This requirement shall not apply to each Contractor or subcontractor
that is exempt under A.R.S. § 23-901, and when such Contractor or
subcontractor executes the appropriate waiver form (Sole Proprietor or
Independent Contractor).
31.3.4 Media Liability Coverage
• Each Claim $2,000,000
• Annual Aggregate $2,000,000
a. Such insurance shall cover any and all errors and omissions or
negligent acts in the production of content, including but not limited to
plagiarism, defamation, libel, slander, false advertising, invasion of
privacy, and infringement of copyright, title, slogan, trademark, service
mark and trade dress.
b. In the event that the Media Liability insurance required by this Contract
is written on a claims-made basis, Contractor warrants that any
retroactive date under the policy shall precede the effective date of this
Contract and, either continuous coverage will be maintained, or an
extended discovery period will be exercised for a period of two (2) years
beginning at the time work under this Contract is completed.
31.4 Additional Insurance Requirements
The policies shall include, or be endorsed to include, as required by this written
agreement, the following provisions:
31.4.1 The Contractor's policies, as applicable, shall stipulate that the insurance
afforded the Contractor shall be primary and that any insurance carried by
the Department, its agents, officials, employees or the State of Arizona
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Arizona Contracts
Information Technology Contracts
Updated: May 8, 2018 Page 167 of 183
shall be excess and not contributory insurance, as provided by A.R.S. §
41-621 (E).
31.4.2 Insurance provided by the Contractor shall not limit the Contractor’s liability
assumed under the indemnification provisions of this Contract.
31.5 Notice of Cancellation
Applicable to all insurance policies required within the Insurance Requirements of
this Contract, Contractor’s insurance shall not be permitted to expire, be
suspended, be canceled, or be materially changed for any reason without thirty
(30) days prior written notice to the State of Arizona. Within two (2) business days
of receipt, Contractor must provide notice to the State of Arizona if they receive
notice of a policy that has been or will be suspended, canceled, materially changed
for any reason, has expired, or will be expiring. Such notice shall be sent directly
to the Department and shall be mailed, emailed, hand delivered or sent by
facsimile transmission to (State Representative’s Name, Address & Fax Number).
31.6 Acceptability of Insurers
Contractor’s insurance shall be placed with companies licensed in the State of
Arizona or hold approved non-admitted status on the Arizona Department of
Insurance List of Qualified Unauthorized Insurers. Insurers shall have an “A.M.
Best” rating of not less than A- VII. The State of Arizona in no way warrants that
the above-required minimum insurer rating is sufficient to protect the Contractor
from potential insurer insolvency.
31.7 Verification of Coverage
Contractor shall furnish the State of Arizona with certificates of insurance (valid
ACORD form or equivalent approved by the State of Arizona) evidencing that
Contractor has the insurance as required by this Contract. An authorized
representative of the insurer shall sign the certificates.
31.7.1 All such certificates of insurance and policy endorsements must be
received by the State before work commences. The State’s receipt of any
certificates of insurance or policy endorsements that do not comply with
this written agreement shall not waive or otherwise affect the requirements
of this agreement.
31.7.2 Each insurance policy required by this Contract must be in effect at, or prior
to, commencement of work under this Contract. Failure to maintain the
insurance policies as required by this Contract, or to provide evidence of
renewal, is a material breach of contract.
31.7.3 All certificates required by this Contract shall be sent directly to the
Department. The State of Arizona project/contract number and project
description shall be noted on the certificate of insurance. The State of
Arizona reserves the right to require complete copies of all insurance
policies required by this Contract at any time.
31.8 Subcontractors
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Arizona Contracts
Information Technology Contracts
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Contractor’s certificate(s) shall include all subcontractors as insureds under its
policies or Contractor shall be responsible for ensuring and/or verifying that all
subcontractors have valid and collectable insurance as evidenced by the
certificates of insurance and endorsements for each subcontractor. All coverages
for subcontractors shall be subject to the minimum Insurance Requirements
identified above. The Department reserves the right to require, at any time
throughout the life of this contract, proof from the Contractor that its subcontractors
have the required coverage.
31.9 Approval and Modifications
The Contracting Agency, in consultation with State Risk, reserves the right to
review or make modifications to the insurance limits, required coverages, or
endorsements throughout the life of this contract, as deemed necessary. Such
action will not require a formal Contract amendment but may be made by
administrative action.
31.10 Exceptions
In the event the Contractor or subcontractor(s) is/are a public entity, then the
Insurance Requirements shall not apply. Such public entity shall provide a
certificate of self-insurance. If the Contractor or subcontractor(s) is/are a State of
Arizona agency, board, commission, or university, none of the above shall apply.
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Arizona Contracts
Information Technology Contracts
Updated: May 8, 2018 Page 169 of 183
32. Network Security (Cyber) and Privacy Liability Insurance
Network Security and Privacy Liability insurance shall include coverage for claims and
losses with respect to network risks (such as data breaches, unauthorized access/use,
I.D. theft, invasion of privacy, damage/loss/theft of data, degradation, downtime, etc.).
Network Security and Privacy Liability insurance is sometimes packaged with Technology
Errors and Omissions (Tech E&O) insurance, depending on the carrier or can be obtained
as stand-alone coverage. Network Security and Privacy Liability insurance can also
include first-party coverage (no third party claim required) for emergency response in the
event of a network or privacy breach such as costs to notify individuals whose data may
have been compromised through registered mail. Also part of emergency response costs
are call center services as an intake for individuals to contact to trigger credit-monitoring
services. Nevertheless, Network Security and Privacy policies can contain similar insuring
agreements to Tech E & O.
The typical exposures to the State are:
• Outsourced IT director:
• Theft of sensitive or valuable information
• Outage and resultant business interruption
• Data loss and associated recovery costs
• Offsite data backup or other hosted solutions:
o Loss of company or client data that could trigger breach requirements,
reputation damage, or result in fines/penalties
• E-mail provider:
o Outage could cause a loss of revenue by decreasing productivity or
provider could be responsible for a loss of data
The requirements listed below are the minimum and should in no way preclude you from
requiring higher limits depending on the potential exposure to the State. Please contact
State Risk Management for guidance.
32.1 Indemnification Clause
To the fullest extent permitted by law, Contractor shall defend, indemnify, and hold
harmless the State of Arizona, and its departments, agencies, boards,
commissions, universities, and any jurisdiction or agency issuing permits for any
work included in the project, and their respective directors, officers, officials, agents
and employees (hereinafter referred to as "Indemnitee") from and against any and
all claims, actions, liabilities, costs, losses, or expenses, (including reasonable
attorney's fees), (hereinafter collectively referred to as "Claims") arising out of
actual or alleged bodily injury or personal injury of any person (including death) or
loss or damage to tangible or intangible property caused, or alleged to be caused,
in whole or in part, by the negligent or willful acts or omissions of Contractor or any
of Contractor's directors, officers, agents, employees, volunteers or
subcontractors. This indemnity includes any claim or amount arising or recovered
under the Workers' Compensation Law or arising out of the failure of Contractor to
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Arizona Contracts
Information Technology Contracts
Updated: May 8, 2018 Page 170 of 183
conform to any federal, state or local law, statute, ordinance, rule, regulation or
court decree. It is the specific intention of the parties that the Indemnitee shall, in
all instances, except for Claims arising solely from the negligent or willful acts or
omissions of the Indemnitee, be indemnified by Contractor from and against any
and all Claims. It is agreed that Contractor will be responsible for primary loss
investigation, defense and judgment costs where this indemnification is applicable.
This indemnification will survive the termination of the above listed contract with
the Contractor.
This indemnity shall not apply if the contractor or sub-contractor(s) is/are an
agency, board, commission or university of the State of Arizona.
32.2 Insurance Requirements
32.2.1 Contractor and subcontractors shall procure and maintain, until all of their
obligations have been discharged, including any warranty periods under
this Contract, insurance against claims for injury to persons or damage to
property arising from, or in connection with, the performance of the work
hereunder by the Contractor, its agents, representatives, employees or
subcontractors.
32.2.2 The Insurance Requirements herein are minimum requirements for this
Contract and in no way limit the indemnity covenants contained in this
Contract. The State of Arizona in no way warrants that the minimum limits
contained herein are sufficient to protect the Contractor from liabilities that
arise out of the performance of the work under this Contract by the
Contractor, its agents, representatives, employees or subcontractors, and
the Contractor is free to purchase additional insurance.
32.3 Minimum Scope and Limits of Insurance
Contractor shall provide coverage with limits of liability not less than those stated
below.
32.3.1 Commercial General Liability (CGL) – Occurrence Form
Policy shall include bodily injury, property damage, and broad form
contractual liability coverage.
• General Aggregate $2,000,000
• Products – Completed Operations Aggregate $1,000,000
• Personal and Advertising Injury $1,000,000
• Damage to Rented Premises $50,000
• Each Occurrence $1,000,000
a. The policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees as
additional insureds with respect to liability arising out of the activities
performed by or on behalf of the Contractor.
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Arizona Contracts
Information Technology Contracts
Updated: May 8, 2018 Page 171 of 183
b. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work performed
by or on behalf of the Contractor.
32.3.2 Business Automobile Liability
Bodily Injury and Property Damage for any owned, hired, and/or non-
owned automobiles used in the performance of this Contract.
• Combined Single Limit (CSL) $1,000,000
a. Policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees as
additional insureds with respect to liability arising out of the activities
performed by, or on behalf of, the Contractor involving automobiles
owned, hired and/or non-owned by the Contractor.
b. Policy shall contain a waiver of subrogation endorsement as required
by this written agreement in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work performed
by or on behalf of the Contractor.
32.3.3 Workers’ Compensation and Employers' Liability
• Workers' Compensation Statutory
• Employers' Liability
o Each Accident $1,000,000
o Disease – Each Employee $1,000,000
o Disease – Policy Limit $1,000,000
a. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work performed
by or on behalf of the Contractor.
b. This requirement shall not apply to each Contractor or subcontractor
that is exempt under A.R.S. § 23-901, and when such Contractor or
subcontractor executes the appropriate waiver form (Sole Proprietor or
Independent Contractor).
32.3.4 Network Security (Cyber) and Privacy Liability
• Each Claim $2,000,000
• Annual Aggregate $2,000,000
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Information Technology Contracts
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a. Such insurance shall include, but not be limited to, coverage for third
party claims and losses with respect to network risks (such as data
breaches, unauthorized access or use, ID theft, theft of data) and
invasion of privacy regardless of the type of media involved in the loss
of private information, crisis management and identity theft response
costs. This should also include breach notification costs, credit
remediation and credit monitoring, defense and claims expenses,
regulatory defense costs plus fines and penalties, cyber extortion,
computer program and electronic data restoration expenses coverage
(data asset protection), network business interruption, computer fraud
coverage, and funds transfer loss.
b. In the event that the Network Security and Privacy Liability insurance
required by this Contract is written on a claims-made basis, Contractor
warrants that any retroactive date under the policy shall precede the
effective date of this Contract and, either continuous coverage will be
maintained, or an extended discovery period will be exercised for a
period of two (2) years beginning at the time work under this Contract
is completed.
c. The policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees as
additional insureds with respect to vicarious liability of the insured
arising out of the activities performed by or on behalf of the Contractor.
d. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work performed
by or on behalf of the Contractor.
32.4 Additional Insurance Requirements
The policies shall include, or be endorsed to include, as required by this written
agreement, the following provisions:
32.4.1 The Contractor's policies, as applicable, shall stipulate that the insurance
afforded the Contractor shall be primary and that any insurance carried by
the Department, its agents, officials, employees or the State of Arizona
shall be excess and not contributory insurance, as provided by A.R.S. §
41-621 (E).
32.4.2 Insurance provided by the Contractor shall not limit the Contractor’s liability
assumed under the indemnification provisions of this Contract.
32.5 Notice of Cancellation
Applicable to all insurance policies required within the Insurance Requirements of
this Contract, Contractor’s insurance shall not be permitted to expire, be
suspended, be canceled, or be materially changed for any reason without thirty
(30) days prior written notice to the State of Arizona. Within two (2) business days
of receipt, Contractor must provide notice to the State of Arizona if they receive
notice of a policy that has been or will be suspended, canceled, materially changed
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Arizona Contracts
Information Technology Contracts
Updated: May 8, 2018 Page 173 of 183
for any reason, has expired, or will be expiring. Such notice shall be sent directly
to the Department and shall be mailed, emailed, hand delivered or sent by
facsimile transmission to (State Representative’s Name, Address & Fax Number).
32.6 Acceptability of Insurers
Contractor’s insurance shall be placed with companies licensed in the State of
Arizona or hold approved non-admitted status on the Arizona Department of
Insurance List of Qualified Unauthorized Insurers. Insurers shall have an “A.M.
Best” rating of not less than A- VII. The State of Arizona in no way warrants that
the above-required minimum insurer rating is sufficient to protect the Contractor
from potential insurer insolvency.
32.7 Verification of Coverage
Contractor shall furnish the State of Arizona with certificates of insurance (valid
ACORD form or equivalent approved by the State of Arizona) evidencing that
Contractor has the insurance as required by this Contract. An authorized
representative of the insurer shall sign the certificates.
32.7.1 All such certificates of insurance and policy endorsements must be
received by the State before work commences. The State’s receipt of any
certificates of insurance or policy endorsements that do not comply with
this written agreement shall not waive or otherwise affect the requirements
of this agreement.
32.7.2 Each insurance policy required by this Contract must be in effect at, or prior
to, commencement of work under this Contract. Failure to maintain the
insurance policies as required by this Contract, or to provide evidence of
renewal, is a material breach of contract.
32.7.3 All certificates required by this Contract shall be sent directly to the
Department. The State of Arizona project/contract number and project
description shall be noted on the certificate of insurance. The State of
Arizona reserves the right to require complete copies of all insurance
policies required by this Contract at any time.
32.8 Subcontractors
Contractor’s certificate(s) shall include all subcontractors as insureds under its
policies or Contractor shall be responsible for ensuring and/or verifying that all
subcontractors have valid and collectable insurance as evidenced by the
certificates of insurance and endorsements for each subcontractor. All coverages
for subcontractors shall be subject to the minimum Insurance Requirements
identified above. The Department reserves the right to require, at any time
throughout the life of this contract, proof from the Contractor that its subcontractors
have the required coverage.
32.9 Approval and Modifications
The Contracting Agency, in consultation with State Risk, reserves the right to
review or make modifications to the insurance limits, required coverages, or
endorsements throughout the life of this contract, as deemed necessary. Such
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action will not require a formal Contract amendment but may be made by
administrative action.
32.10 Exceptions
In the event the Contractor or subcontractor(s) is/are a public entity, then the
Insurance Requirements shall not apply. Such public entity shall provide a
certificate of self-insurance. If the Contractor or subcontractor(s) is/are a State of
Arizona agency, board, commission, or university, none of the above shall apply.
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Other Contract Types
33. Grants
A Grant Contract allows the State to disburse funds to a recipient following approval of the
grant application process. The funds may originate from a public or private source, and
the State acts as administrator to distribute funds for specific use as defined by the
originator. The final recipient must qualify under the grant application criteria. The grant
contract is different from the grant application – it is a means to convey money.
There are several types of Grants:
1. Funding is directed from the State to a recipient; there is no written scope of services;
there is no contractual duty to perform services or provide goods directly to the State;
one lump sum disbursement is made. The benefit to the State is indirect. There is
vicarious liability to the State for providing the funds to the recipient.
2. Funding is directed from the State to a recipient. There is a contractual duty to perform
services within a written directive. The written directives in the grant contract (often
found in an attachment such as the grant application) may show or describe:
• Tangible goods or services
• Intangibles such as intellectual property
Since these directives require the recipient to perform certain duties for the State, there is
a greater contractual obligation to the State than in item #1 above. There could be various
methods of grant payments to the recipient other than one lump sum.
3. Funding is directed to the State as a grantee. There is a contractual duty for the State
to perform services within a written directive. A portion of the State’s funds may be to
sub-grantees to carry out the written directives further. The disbursement of funds to
one or more sub-grantees may be done using various methods such as:
• Sub-grantee contract
• Solicitation of goods or services
• Purchase order
Each of these usually identifies the type of goods or services needed or required.
If your contract most resembles #1 above, then use indemnity paragraph from
Standard
Service Contractors - Using Contractor Vehicles with no further insurance requirements.
If your contract most resembles #2 above, then use the module that best fits the type of
contract that will be issued.
Use Intergovernmental Agreements (IGA)
for Grants in which all parties are public entities. For
Grants in which public and private entities are parties, contact your State Risk Insurance Analyst
for advice.
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34. Intern Work Service
When a State agency enters into an agreement for the use of a student intern, and such
service allows the student to gain credentials toward a curriculum, the agreement is
usually called an Intern work service agreement.
When such intern services are used under an agreement, the agreement must contain
Insurance requirements binding upon the facilitating school or University providing the
interns (does not apply to the State of Arizona Universities).
The procurement officer should consider using the
Standard Professional Service
Contracts module, excluding the Professional Liability insurance requirement, depending
on whether the intern is qualified to give professional advice. Keep in mind that most
undergraduate student interns are not yet licensed or Board certified as professionals,
however, some graduate school interns may have licensing in a profession and be
continuing their graduate level education. If in doubt in the Professional Liability
requirement or ask the host school or college to define the credentials of the interns in
question.
Once the procurement officer has selected a module appropriate for the intern services,
then a final modification to the Insurance Requirements must be made:
Since a student is not employed by either their school or the State agency, the Workers’
Compensation requirement is not applicable. In its place, the contract paragraph should
say:
“All interns under this agreement must insure their health/disability/disease by
securing personal or family medical coverage.”
All other language in the module pertaining to Indemnity and Liability Insurance should
remain.
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35. Intergovernmental Agreements (IGA)
For most mutually beneficial IGAs, it is not necessary or practical to require additional
insured status from the other governmental entity. Each entity should be responsible for
its own acts. In fact, the insurance requirements for an IGA with most major governmental
entities, depending on the nature of the agreement, can be either omitted or accepted at
a minimal level, provided State Risk approves.
For this reason, specific indemnification language has been developed and agreed upon
by the various governmental entities in the State of Arizona.
When the other governmental entity procures the services of a contractor, subcontractor,
or outside vendor to do work on State of Arizona property, those non-governmental entities
must provide insurance in the amount specified in the Sample Insurance Requirements,
and name all the involved governmental entities as additional insureds.
Use the indemnification language found in this section for IGAs only. Contact State Risk
or your Risk Management Department for guidance.
Contact your State Risk Insurance Analyst for any IGA or similar agreement with an
agency of the Federal Government, or any Sovereign/Tribal Nation.
General Guidelines for IGAs
1. For Work in Right-of-Way, Revocable Permits and Leases:
• There are no insurance requirements for the Permittee/Lessee (that is, the other
governmental entity).
• Use the indemnification language shown in this section.
• “Standard” insurance requirements for any contractor/outside vendor doing work
related to the permit, shall name the Permitor/Lessor (State of Arizona) as an
additional insured.
• The governmental entity that receives the permit or rents the property (the
Permittee or Lessee) must require its contractor(s) and subcontractor(s) to
indemnify the State of Arizona, its departments, agencies, boards, commissions,
universities and its officers, officials, agents, and employees to the same extent
as they indemnify the other governmental entity.
• All governmental entities that are a party to the IGA shall be named as additional
insureds on the Contractor’s insurance.
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2. For the IGA as a Funding Conduit, including Grants (e.g. Area Agency on Aging,
Block Watch Grants, Railroad Crossing Upgrades, etc.):
• There are no insurance requirements for the other governmental entity.
• Use the vicarious indemnification language shown in this section.
• If any Contractor or outside vendor is involved, all governmental entities party to the
IGA shall be named as additional insureds on the Contractor’s/outside vendor’s
insurance.
3. For Mutual Aid Agreements (e.g. Fire, Police, Trash Collection, etc.):
• There are no insurance requirements for the other governmental entity.
• Use the indemnification language shown in this section.
• If any Contractor or outside vendor is involved, all governmental entities party to the
IGA shall be named as additional insureds on the Contractor’s/outside vendor’s
insurance.
4. For Airports:
• Anyone, including governmental entities, occupying a hangar located at a State of
Arizona airport must have Hangar Keepers’ Liability Insurance, with the airport
operator (State of Arizona) named as an additional insured.
• Contractors and subcontractors of the other governmental entity/ies in the IGA are
required to carry insurance limits of $5,000,000 General Liability and $5,000,000
combined single limits for Automobile Liability when performing operations or
services on the “air side” of airport terminals. Policy must be endorsed to include
airports. For further details and assistance regarding an IGA that involves operations
at an airport, please contact State Risk.
35.1 Indemnification:
Each party (as "Indemnitor") agrees to defend, indemnify, and hold harmless the
other party (as "Indemnitee") from and against any and all claims, losses, liability,
costs, or expenses (including reasonable attorney's fees) (hereinafter collectively
referred to as "Claims") arising out of bodily injury of any person (including death)
or property damage, but only to the extent that such Claims which result in
vicarious/derivative liability to the Indemnitee are caused by the act, omission,
negligence, misconduct, or other fault of the Indemnitor, its officers, officials,
agents, employees, or volunteers. The State of Arizona, (State Agency) is self-
insured per A.R.S. 41-621.
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In addition, should (insert name of other governmental entity) utilize a contractor(s)
and subcontractor(s) the indemnification clause between (insert name of other
governmental entity) and its contractor(s) and subcontractor(s) shall include the
following:
To the fullest extent permitted by law, Contractor shall defend, indemnify, and hold
harmless the (insert name of other governmental entity) and the State of Arizona,
and any jurisdiction or agency issuing any permits for any work arising out of this
Agreement, and its departments, agencies, boards, commissions, universities, ,
officers, officials, agents, and employees (hereinafter referred to as “Indemnitee”)
from and against any and all claims, actions, liabilities, damages, losses, or
expenses (including court costs, attorneys’ fees, and costs of claim processing,
investigation and litigation) (hereinafter referred to as “Claims”) for bodily injury or
personal injury (including death), or loss or damage to tangible or intangible
property caused, or alleged to be caused, in whole or in part, by the negligent or
willful acts or omissions of the contractor or any of the directors, officers, agents,
or employees or subcontractors of such contractor. This indemnity includes any
claim or amount arising out of or recovered under the Workers’ Compensation Law
or arising out of the failure of such contractor to conform to any federal, state or
local law, statute, ordinance, rule, regulation or court decree. It is the specific
intention of the parties that the Indemnitee shall, in all instances, except for Claims
arising solely from the negligent or willful acts or omissions of the Indemnitee, be
indemnified by such contractor from and against any and all claims. It is agreed
that such contractor will be responsible for primary loss investigation, defense and
judgment costs where this indemnification is applicable. Additionally on all
applicable insurance policies, contractor and its subcontractors shall name the
State of Arizona, and its departments, agencies, boards, commissions,
universities, officers, officials, agents, and employees as an additional insured and
also include a waiver of subrogation in favor of the State.
35.2 Insurance Requirements for Governmental Parties to an IGA
• None
35.3 Insurance Requirements for Any Contractors Used by a Party to the
Intergovernmental Agreement
(Note: this applies only to Contractors used by a governmental entity, not to the
governmental entity itself.) The insurance requirements herein are minimum
requirements and in no way limit the indemnity covenants contained in the
Intergovernmental Agreement. The State of Arizona in no way warrants that the
minimum limits contained herein are sufficient to protect the governmental entity
or Contractor from liabilities that might arise out of the performance of the work
under this Contract by the Contractor, his agents, representatives, employees or
subcontractors, and Contractor and the governmental entity are free to purchase
additional insurance.
35.4 Minimum Scope And Limits Of Insurance
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Contractor shall provide coverage with limits of liability not less than those stated
below.
35.4.1 Commercial General Liability – Occurrence Form
Policy shall include bodily injury, property damage, and broad form
contractual liability coverage.
• General Aggregate $2,000,000
• Products – Completed Operations Aggregate $1,000,000
• Personal and Advertising Injury $1,000,000
• Damage to Rented Premises $ 50,000
• Each Occurrence $1,000,000
a. The policy shall be endorsed, as required by this written agreement,
to include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees
as additional insureds with respect to liability arising out of the
activities performed by or on behalf of the Contractor.
b. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
(Note that the other governmental entity(ies) is/are also required to be
additional insured(s) and they should supply the Contractor with their
own list of persons to be insured.)
35.5 Business Automobile Liability
Bodily Injury and Property Damage for any owned, hired, and/or non-owned
automobiles used in the performance of this Contract.
• Combined Single Limit (CSL) $1,000,000
Policy shall be endorsed, as required by this written agreement, to
include the State of Arizona, and its departments, agencies, boards,
commissions, universities, officers, officials, agents, and employees as
additional insureds with respect to liability arising out of the activities
performed by, or on behalf of, the Contractor involving automobiles
owned, hired and/or non-owned by the Contractor.
Policy shall contain a waiver of subrogation endorsement as required
by this written agreement in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work performed
by or on behalf of the Contractor.
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(Note that the other governmental entity(ies) is/are also required to be
additional insured(s) and they should supply the Contractor with their own
list of persons to be insured.)
35.5.1 Workers’ Compensation and Employers' Liability
• Workers' Compensation Statutory
• Employers' Liability
o Each Accident $1,000,000
o Disease – Each Employee $1,000,000
o Disease – Policy Limit $1,000,000
a. Policy shall contain a waiver of subrogation endorsement, as required
by this written agreement, in favor of the State of Arizona, and its
departments, agencies, boards, commissions, universities, officers,
officials, agents, and employees for losses arising from work
performed by or on behalf of the Contractor.
b. This requirement shall not apply to each Contractor or subcontractor
that is exempt under A.R.S. § 23-901, and when such Contractor or
subcontractor executes the appropriate waiver form (Sole Proprietor
or Independent Contractor).
35.6 Additional Insurance Requirements
The policies shall include, or be endorsed to include, as required by this written
agreement, the following provisions:
35.6.1 The Contractor's policies, as applicable, shall stipulate that the insurance
afforded the Contractor shall be primary and that any insurance carried by
the Department, its agents, officials, employees or the State of Arizona
shall be excess and not contributory insurance, as provided by A.R.S. §
41-621 (E).
35.6.2 Insurance provided by the Contractor shall not limit the Contractor’s liability
assumed under the indemnification provisions of this Contract.
35.7 Notice of Cancellation
Applicable to all insurance policies required within the Insurance Requirements of
this Contract, Contractor’s insurance shall not be permitted to expire, be
suspended, be canceled, or be materially changed for any reason without thirty
(30) days prior written notice to the State of Arizona. Within two (2) business days
of receipt, Contractor must provide notice to the State of Arizona if they receive
notice of a policy that has been or will be suspended, canceled, materially changed
for any reason, has expired, or will be expiring. Such notice shall be sent directly
to the Department and shall be mailed, emailed, hand delivered or sent by
facsimile transmission to (State Representative’s Name, Address & Fax Number).
35.8 Acceptability of Insurers
Contractor’s insurance shall be placed with companies licensed in the State of
Arizona or hold approved non-admitted status on the Arizona Department of
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Insurance List of Qualified Unauthorized Insurers. Insurers shall have an “A.M.
Best” rating of not less than A- VII. The State of Arizona in no way warrants that
the above-required minimum insurer rating is sufficient to protect the Contractor
from potential insurer insolvency.
35.9 Verification of Coverage
Contractor shall furnish the State of Arizona with certificates of insurance (valid
ACORD form or equivalent approved by the State of Arizona) evidencing that
Contractor has the insurance as required by this Contract. An authorized
representative of the insurer shall sign the certificates.
35.9.1 All such certificates of insurance and policy endorsements must be
received by the State before work commences. The State’s receipt of any
certificates of insurance or policy endorsements that do not comply with
this written agreement shall not waive or otherwise affect the requirements
of this agreement.
35.9.2 Each insurance policy required by this Contract must be in effect at, or prior
to, commencement of work under this Contract. Failure to maintain the
insurance policies as required by this Contract, or to provide evidence of
renewal, is a material breach of contract.
35.9.3 All certificates required by this Contract shall be sent directly to the
Department. The State of Arizona project/contract number and project
description shall be noted on the certificate of insurance. The State of
Arizona reserves the right to require complete copies of all insurance
policies required by this Contract at any time.
35.10 Subcontractors
Contractor’s certificate(s) shall include all subcontractors as insureds under its
policies or Contractor shall be responsible for ensuring and/or verifying that all
subcontractors have valid and collectable insurance as evidenced by the
certificates of insurance and endorsements for each subcontractor. All coverages
for subcontractors shall be subject to the minimum Insurance Requirements
identified above. The Department reserves the right to require, at any time
throughout the life of the Contract, proof from the Contractor that its subcontractors
have the required coverage.
35.11 Approval and Modifications
The Contracting Agency, in consultation with State Risk, reserves the right to
review or make modifications to the insurance limits, required coverages, or
endorsements throughout the life of this contract, as deemed necessary. Such
action will not require a formal Contract amendment, but may be made by
administrative action.
35.12 Exceptions
In the event the Contractor or subcontractor(s) is/are a public entity, then the
Insurance Requirements shall not apply. Such public entity shall provide a
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certificate of self-insurance. If the Contractor or subcontractor(s) is/are a State of
Arizona agency, board, commission, or university, none of the above shall apply.
