DCHS contract insurance requirements

Important things for DCHS’ contracted providers to know about insurance

Understanding your contractual insurance requirements

• Final insurance coverage requirements will be decided during contract talks based on the work you are being contracted to do.
• The final requirements can be found in Section 14 of your contract’s Standard Terms and Conditions.

Documenting your compliance with insurance requirements

• You must provide proof of adequate and active insurance before a contract can be signed and you begin providing contracted services.
• You must continue to provide proof of adequate and active insurance coverage throughout the life of the contract.

Getting advice

• Based on your organization’s situation, it may be advisable for you to carry more than the minimum coverages and limits required to contract with DCHS.
• It is your job to get and keep the right insurance throughout the life of the contract. DCHS cannot legally give you advice about insurance.
• We recommend that you show your insurance broker this webpage and/or Section 14 of your draft contract’s Standard Terms and Conditions
• There are many resources online. A few reliable sources include:
  • The US Small Business Administration has information for small businesses
  • The Washington State Office of the Insurance Commissioner has information on Business Insurance

Required Insurance Documents

• Contracted providers should upload all required insurance documentation to their provider profile in Agiloft, DCHS’ contract management information system. This includes initial documentation during contract talks and throughout the life of the contract.
• All insurance types require at least a Certificate of Insurance (COI). Some policies, such as auto liability insurance, require separate policies, and therefore will have an additional COI. DCHS does not need your entire policy document, riders, etc.
• King County also requires “Additional Insured Endorsement” (Endorsement) for some types of coverages—see the contract terms. The COI and the Endorsement are typically two separate documents.
• Insurance documents must be in the name of the legal entity or individual listed on the first page of the contract.

 
Certificate of Insurance (COI)

COIs often look like this but can take other forms. They are high-level documents for information purposes that summarizes and organization’s insurance coverages.

Additional Insured Endorsement

• An “Additional Insured Endorsement” (Endorsement) is a document from your insurance company that extends coverage from your policy to the County and allows the County to work directly with your insurance company if there is an insurance claim. Some insurance companies may charge extra to provide the additional insured endorsement.
• It is very important that the endorsement specifically uses the language of “King County, its officers, officials, employees, and agents.” It should not name DCHS or a specific division. Your contract is technically with King County, and King County, its officers, officials, employees, and agents must be called out as additionally insured.
• The Endorsement will be related to a specific policy and policy term. Therefore, you may need more than one Endorsement document and when you renew your insurance coverage you will need to get and provide new Endorsement documentation too.

For Municipal or State Agencies

If the Contractor is a Municipal Corporation, an agency of the State of Washington, or any other Public Agency and is self-insured, a letter of self-insurance can take the place of a COI and Additional Insured Endorsement. 

Contract Insurance Requirements

Note: this is all the possible language that can appear in Section 14 of DCHS’ Standard Terms and Conditions. Many of the coverage types and minimums are conditioned on the type of program activities included in the contract. Please read Section 14 of your draft contract carefully to know what the requirements for the particular contract are.

Section 14. Insurance Requirements

1. Prior to execution of the Contract, Contractor shall provide evidence of the insurance required under this Contract, including a Certificate of Insurance and endorsements covering King County as additional insured for full coverage and policy limits prior to Contract execution. Evidence of insurance and endorsements shall be submitted via DCHS’ Contract Lifecycle Management system or email to DCHSContracts@kingcounty.gov. The Contractor may request additional time to provide the required documents by emailing DCHSContracts@kingcounty.gov.. Extensions will be granted at the sole discretion of the County. All evidence of insurance shall be signed by a properly authorized officer, agent, general agent, or qualified representative of the insurer(s), shall set forth the name of the insured(s), the type and amount of insurance, the location and operations to which the insurance applies, the inception and expiration dates, contract number, and shall state that the County shall receive notice at least thirty (30) days prior to the effective date of any cancellation, lapse, or material change in the policy. Similar documentation confirming renewal of required insurance shall be provided on each insurance renewal date.
2. In the event of a loss, the County reserves the right to require complete, certified copies of all required insurance policies, including endorsements and riders, which may be redacted of any confidential or proprietary information. Contractor shall deliver such policies to the County within five (5) business days of County’s request.
   
   Failure to provide such insurance in a timeframe acceptable to the County shall enable the County to suspend or terminate the Contractor's Work hereunder in accordance with Contract provisions regarding "Termination for Convenience/Default/Non-appropriation." Suspension or termination of this Contract shall not relieve the Contractor from its insurance obligations hereunder.
3. County’s receipt or acceptance of Contractor’s evidence of insurance at any time without comment or objection, or County’s failure to request certified copies of such insurance, does not waive, alter, modify, or invalidate any of the insurance requirements set forth in this Section or, consequently, constitute County’s acceptance of the adequacy of Contractor’s insurance or any Subcontractor’s insurance or preclude or prevent any action by County against Contractor for breach of the requirements of this Section.
4. Insurance Requirements
   

   The Contractor shall purchase and maintain, at its sole cost and expense, the minimum insurance set forth below. By requiring such minimum insurance, County does not and shall not be deemed or construed to have assessed the risks that may be applicable to Contractor, or any Subcontractor, under this Contract, or in any way limit County’s potential recovery to insurance limits required hereunder. To the contrary, this Contract’s insurance requirements may not in any way be construed as limiting any potential liability to County or County’s potential recovery from Contractor. Contractor shall assess its own risks and if it deems appropriate and/or prudent, maintain greater limits and/or broader coverage.

   Nothing contained within these insurance requirements shall be deemed to limit the scope, application, and/or limits of the coverage afforded, which coverage shall apply to each insured to the full extent provided by the terms and conditions of the policy(s).
   
   Each insurance policy shall be written on an “occurrence” basis/form; excepting insurance for Professional Liability (Errors and Omissions), and/or Cyber Liability (Technology Errors and Omissions), if required by this Contract, is acceptable on a “claims made” basis/form. If coverage is  purchased on a “claims made” basis/form, the coverage provided under that insurance shall be maintained either through: (i) consecutive policy renewals for not less than three (3) years from the date of the work which is subject to this Contractor or, if such renewals are unavailable, (ii) the purchase of a tail/extended reporting period for not less than three (3) years from the date of completion of the work which is subject of this Contract. All insurance written on a “claims made” basis/form must have its policy inception or retroactive date be no later than the effective date of the Contract, unless otherwise approved in writing by the County’s Office of Risk Management Services.

5. Minimum Scope and Limits of Insurance
   

   The Contractor shall maintain the following types of insurance and minimum insurance limits:
   
   Reminder: This section will be customized based on the Scope of Work to only list the actual requirements. Review carefully before signing.

   • Commercial General Liability: $1,000,000 per occurrence and $2,000,000 in the aggregate for bodily injury, personal and advertising injury, and property damage. Coverage shall be at least as broad as that afforded under ISO form number CG 00 01 current edition, or its substantive equivalent. Such insurance shall include coverage for, but not limited to premises liability, ongoing operations, and contractual liability. Limits may be satisfied by a single primary policy or by a combination of separate primary and umbrella or excess liability policies, provided that coverage under the latter shall be at least as broad as that afforded under the primary policy and satisfy all other requirements applicable to liability insurance including but not limited to additional insured status for the County.
     • If the Scope of Work involves the Contractor providing mental health outpatient treatment or non-treatment services or Community Protection Program Clients, the limit shall be no less than $3,000,000 per occurrence and $3,000,000 in the aggregate.
     • If the Scope of Work involves the Contractor providing mental health or substance use disorder outpatient treatment or non-treatment services, the limit shall be no less than $3,000,000 per occurrence and $3,000,000 in the aggregate.
     • If the Scope of Work involves the Contractor providing mental health or substance use disorder inpatient services, the limit shall be no less than $5,000,000 per occurrence and $5,000,000 in the aggregate.
   • Sexual Assault and Misconduct Liability: $1,000,000 per occurrence and $2,000,000 in the aggregate. If the Scope of Work involves unsupervised contact with minors, such policy shall include sexual assault and misconduct coverage. Such coverage may be included under a Commercial General Liability policy or provided by a standalone policy.
     • If the Scope of Work involves the Contractor providing mental health outpatient treatment or non-treatment services or Community Protection Program Clients, the limit shall be no less than $3,000,000 per occurrence and $3,000,000 in the aggregate.
     • If the Scope of Work involves the Contractor providing mental health or substance use disorder outpatient treatment or non-treatment services, the limit shall be no less than $3,000,000 per occurrence and $3,000,000 in the aggregate.
     • If the Scope of Work involves the Contractor providing mental health or substance use disorder inpatient services, the limit shall be no less than $5,000,000 per occurrence and $5,000,000 in the aggregate.
   • Professional Liability (Errors and Omissions): In the event that services delivered pursuant to this Contract either directly or indirectly involve or require professional services, $1,000,000 per claim and in the aggregate.  “Professional Services” for the purpose of this Contract Section, shall mean any services provided by a licensed professional or those services that require professional standards of care.
     • If the Scope of Work involves the Contractor providing mental health or substance use disorder outpatient treatment or crisis services or mental health or substance use disorder inpatient services, the limit shall be no less than $3,000,000 per claim and in the aggregate.
   • Automobile Liability: If a vehicle will be used in the performance of the Scope of Work, the Contractor shall maintain Automobile Liability coverage for $1,000,000 combined single limit per accident for bodily injury and property damage. Coverage shall be at least as broad as that afforded under ISO form number CA 00 01 covering BUSINESS AUTO COVERAGE, symbol 1 “any auto”; or the appropriate coverage provided by symbols 2, 7, 8, or 9. Limits may be satisfied by a single primary limit or by a combination of separate primary and umbrella or excess liability policies, provided that coverage under the latter shall be at least as broad as that afforded under the primary policy.
     • In the event the Scope of Work delivered pursuant to this Contract involves the transportation of service recipients, the limit shall be no less than $3,000,000 combined single limit per accident for bodily injury and property damage.
   • Workers Compensation: Workers Compensation coverage, as required by the Industrial Insurance Act of the State of Washington, as well as any similar coverage required for this Work by applicable Federal or “Other States” State Law.
   • Employers Liability or “Stop Gap” coverage: When statutorily required to have Workers Compensation coverage, Contractor shall maintain Employers Liability or Stop Gap coverage with a limit no less than $1,000,000 each occurrence and shall be at least as broad as the protection provided by the Workers Compensation policy Part 2 (Employers Liability), or, in monopolistic states, including but not limited to Washington, the protection provided by the “Stop Gap” endorsement to the Commercial General Liability policy.
   • Cyber Liability: If Scope of Work involves access to, handling, and/or storage of sensitive data, to include but not limited to payment card information, personally identifiable information (PII), and personal health information (PHI) of 1,000 or more records, Cyber Liability coverage shall be maintained. Coverage shall include loss resulting from data security/privacy breach, or other unauthorized access or related violations including identity fraud and privacy law violations, denial of service attacks, introduction of virus and malicious code, extortion, dissemination or destruction of electronic data, business interruption, privacy law violations, disclosure of non-public, personal or confidential information, identity fraud, loss of income due to system crashes, breach of contract, and acts by rogue employees. Coverage shall include notification and other expenses incurred in remedying a privacy breach as well as costs to investigate and restore data.
     • If 1,000 – 2,000 records: $500,000 per claim and in the aggregate 
     • More than 2,000 records:  $1,000,000 per claim and in the aggregate
     • If the Scope of Work involves mental health or substance use disorder outpatient treatment or crisis services or mental health or substance use disorder inpatient services, the limit shall be no less than $3,000,000 per claim and in the aggregate, regardless of the number of records.
   • Crime Insurance: If the Scope of Work involves handling County funds or assets in the total amount of $25,000 or more, such as cash value cards or flexible financial assistance funds, the Contractor shall maintain Crime Insurance with a minimum limit sufficient to cover the greater of the maximum amount of risk at any one time or a total of one year’s receipts or similar measure of exposure. For this contract, that minimum as been determined to be $(Amount to be determined per contract). Coverage for Fidelity, Theft, Disappearance, Destruction Liability, and Employee Dishonesty is required. Coverage shall include ‘Joint Loss Payable’ ISO form CR 20 15 10/10 or its substantive equivalent; and ‘Provide Required Notice of Cancellation to Another Entity’ ISO form CR 20 17 10/10 or its substantive equivalent.
   • Only Applicable for Contracts with Commerce Department Funds: Fidelity Insurance: Every officer, director, employee, or agent who is authorized to act on behalf of the Contractor for the purpose of receiving or depositing funds into program accounts or issuing financial documents, checks, or other instruments of payment for program costs shall be insured to provide protection against loss:
     • The amount of fidelity coverage secured pursuant to this contract shall be $100,000 or the highest of planned reimbursement for the contract period, whichever is lowest. Fidelity insurance secured pursuant to this paragraph shall name King County as beneficiary.
     • These insurance requirements shall be included in the Certificate of Insurance, which shall be submitted along with an Endorsement of Additional Insured naming King County within thirty (30) days of signing this Contract.
   • Property Insurance: If the performance of the Scope of Work is dependent on a building(s) owned or leased by the Contractor, such that if the building(s) was damaged or destroyed the Contractor would be unable to provide contracted services, then the Contractor shall maintain Property Insurance written on a replacement cost basis. For this contract, that minimum as been determined to be $(Amount to be determined per contract). Insurance Services Office Form Number CP 00 10 covering BUILDING AND PERSONAL PROPERTY COVERAGE and Insurance Services Office form number (CP 10 30) CAUSES OF LOSS - SPECIAL FORM or project appropriate equivalent. King County shall be named as a Loss Payee as its interest may appear. The policy shall include a waiver of subrogation in favor of King County.
   • Additional insurance coverage types and/or limits may be required based on the Statement of Work. 
   • Municipal or State Agencies: If the Contractor is a Municipal Corporation, an agency of the State of Washington, or any other Public Agency and is self-insured, a letter of self-insurance shall be attached and be incorporated by reference and shall constitute compliance with the requirement(s) for the coverage type(s) and limit(s) that is self-insured.
6. Other Insurance Provisions and Requirements
   All insurance policies purchased and maintained by the Contractor required in this Contract shall contain, or be endorsed to contain, the following provisions:
   • With respect to all liability policies except Professional Liability (Errors and Omissions), Cyber Liability, and Workers’ Compensation:
     • King County, its officials, employees, and agents shall be covered as additional insured for full coverage and policy limits as respects liability arising out of activities performed by or on behalf of the Contractor, its agents, representatives, employees, or Subcontractor(s) in connection with this Contract. The County requires a copy of the additional insured endorsement(s) with the Certificate(s) of Insurance.
   • With respect to all liability policies (except Workers’ Compensation):
     • Coverage shall be primary insurance as respects the County, its officials, employees, and agents. Any insurance and/or self-insurance maintained by the County, its officials, employees, or agents shall not contribute with any Contractor’s or Subcontractor’s insurance or benefit the Contractor or any Subcontractor, or their respective insurers in any way.

   Insurance shall expressly state that it applies separately to each insured and additional insured against whom a claim is made and/or lawsuit is brought, except with respect to the limits of insurer’s liability.

7. Deductibles and Self-Insured Retentions
   Any deductible and/or self-insured retention of the policies shall not in any way limit County’s right to coverage under the required insurance, or to the Contractor’s or any Subcontractor’s liability to the County and shall be the sole responsibility of the Contractor or its Subcontractor, even if no claim has actually been made or asserted against Contractor or Subcontractor.
8. Acceptability of Insurers
   Unless otherwise approved by the County, insurance is to be placed with insurers with an A.M. Best rating of no less than A:VIII, or, if not rated with an A.M. Best, with minimum surplus equivalent of an A.M. Best surplus size VIII.
   Professional Liability (Errors and Omissions) insurance coverage may be placed with insurers with an A.M. Best rating of B+:VII.
   
   If at any time any of the foregoing policies fail to meet minimum requirements, the Contractor shall, promptly obtain a new policy, and shall submit the same to the County, with the appropriate certificates and endorsements, for review.
9. Subcontractors
   Contractor shall include all Subcontractors as insureds under its policies or, alternatively, the Contractor must require each of its Subcontractors to procure and maintain appropriate and reasonable insurance coverage and insurance limits to cover each of the Subcontractor’s liabilities given the Subcontractor’s Scope of Work and the services being provided herein. To the extent reasonably commercially available, insurance maintained by any Subcontractor must comply with the specified requirements of this Section (inclusive) above, including the requirement that all liability insurance policies (except Professional Liability and Workers Compensation) provided by the Subcontractor(s) must include King County, its officials, agents and employees as additional insured for full coverage and policy limits. Contractor is obligated to require and verify that each Subcontractor maintains the required insurance and ensure County is included as additional insured. Upon request by the County, and within five (5) business days, Contractor must provide evidence of each Subcontractor(s) insurance coverage, including endorsements.
10. Exceptions
    A Contractor may request a waiver or reduction (exception) to  one or more of the insurance requirements if the insurance requirement is not applicable to the Contractor’s Statement of Work or obtaining the expected insurance presents an undue financial hardship. Such requests shall be made during the contract negotiation process. All exception request approvals or denials are in the County’s sole discretion and all exception approvals must be in writing. If approved by the County, the Contractor shall still provide proof of and hold all other required insurance provisions as stated above. 

If your Statement of Work includes the Development of Capital Assets, such as housing units, you will likely be required to also carry the following insurance coverages:

Note: For these types of contracts, Insurance Requirements can be found in Section 17 of the Standard Terms and Conditions.

Builder’s Risk: The Contractor or its general contractor shall procure and maintain, at its sole cost and expense, during the life of the Contract or until acceptance of the project by King County, whichever is longer, "All Risk" Builders Risk Insurance at least as broad as ISO form number CP0020 ( Builders Risk Coverage Form) with ISO form number CP0030 (Causes of Loss - Special Form) including coverage for collapse, theft, and property in transit. The coverage shall insure for direct physical loss to property of the entire construction project, for one hundred percent of the replacement value thereof. For this contract, that minimum as been determined to be $(Amount to be determined per contract). The policy shall be endorsed to cover the interests, as they may appear, of King County, the Owner, the Contractor and subcontractors of all tiers with King County listed as a loss payee. Policy shall include a waiver of subrogation in favor of King County.

Contractor’s Pollution Liability: For work involving the introduction, potential release or exacerbation of hazardous materials or pollutants, the Contractor or general contractor shall provide Contractor’s Pollution Liability coverage in the amount of $1,000,000 per occurrence or claim and in the annual aggregate to cover sudden and non-sudden bodily injury and/or property damage to include the destruction of tangible property, loss of use, cleanup costs, and the loss of use of tangible property that has not been physically injured or destroyed. Coverage shall include non-owned disposal sites. If asbestos, lead, or PCB’s are a potential exposure, such insurance shall not exclude pollution arising out of Asbestos, Lead, and/or PCB operations. Evidence of Insurance must specifically state that coverage is included.