Insurance requirements frequently asked questions

Insurance is a way to protect yourself from having to pay a lot of money if something bad happens in your work, like an accident or mistake. It is an agreement to transfer risk between an individual or organization and an insurance company. It aims to transfer the financial losses an individual or organization could experience from unplanned events like accidents or mistakes to the insurance company.

How does it work?

When you buy insurance, you pay a premium. A premium is a regular payment to the insurance company. In exchange, the insurance company may help cover costs if something goes wrong like injuries and damage related to your work. The details of what is covered are explained in the insurance policy (contract). For example, if your policy covers costs for injuries to persons but not for damage to property, you would pay the property damage costs while the insurance company would cover some or all of the injury costs.

Our insurance requirements help protect contractors, the community members served by the contractors, and King County (“the County”) when something goes wrong during contracted work. The insurance company may help pay when a contractor must pay for a covered loss, damage, or injury. Costs could include things like medical bills, building repair costs, or legal fees.

If damage or harm is caused by a contractor’s work or error, the County may expect the contractor responsible to pay for any loss they caused. Without insurance, you (or your organization) may have to use your own money to pay for damages resulting from accidents or mistakes.

Insurance also protects the community members you work with. If your actions harm them, you can ask the insurance company to pay the cost of any covered damages.

The kind of insurance the contract requires depends on the work to be completed for the contract. The County matches insurance requirements to a contract’s possible risks.

Depending on the work to be done, the County may require one or more types of insurance. The solicitation (or advertisement) to apply for the work should have a list of what insurance is needed.

The County needs the person or organization named in the contract to have insurance. The insurance certificate must be in the name of the individual or agency listed on the first page of the contract.

If your name is on the contract (not the name of the place you work for), you need to have insurance in your name.

The County makes decisions about when and how much insurance is required by considering a few things. Here are some things that are considered:

• The work to be done in the contract
• The things that could go wrong (the possible risks) while doing that work
• The history of lawsuits or insurance claims the County or other organizations have for that work (or work like it)
• How insurance requirements might hurt applicants and/or the communities being served by the work (for example, would insurance requirements make it so an applicant couldn’t meet contract terms, and/or would a community be hurt if an applicant could not contract for work)

County contractors must have insurance coverage based on the harm or loss that might come from the work the contractors do, not how much the contractor will be paid for the work.

For example, a taxi ride might cost $20. If the taxi caused a really bad accident, it could hurt a lot of people, cars, buildings, or other property. Depending on how bad the accident was, that damage could cost thousands or millions of dollars. To protect the contractor and the County, insurance must be able to cover a good part (or all) of the possible damag

The certificate of insurance officially verifies that the contractor has the required insurance.

Insurance requirements depend on the type of work in the contract. Some work (like doctors giving medical care) will always need insurance, but other work may have less risk for the contractor and the County so insurance is not required. In some situations the County may also decide to not require insurance (or “waive insurance requirements”) on a case-by-case basis.

In an application process, insurance is not part of selection/evaluation criteria. You won’t be disqualified during the selection process if you don’t have insurance yet, but if you’re selected you may need to get insurance to receive the contract. If you have questions about whether or not you need insurance, contact the program representative to discuss your options.

Please know that if you don’t purchase insurance, an insurance company will not pay for costs if there is an accident or problem from the contracted work. If that happens, you or your organization could have to pay for costs and damages with your own money.

If you are chosen for a contract, you must provide insurance certificates and endorsements before the contract is countersigned by the County. We recommend providing the contract language to your insurance agent/broker as soon as your bid/proposal is accepted to expedite contract execution. The certificates and endorsements must be renewed throughout the life of the contract.

An "additional insured 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 so you should ask your broker or insurance company what they do.

"Additional Insured endorsements" can come in different forms. We suggest that you share the insurance part of your contract with your insurance company or agent/broker so they can help figure out what you will need.

As an "additional insured," the County can only get information about your current insurance and can work directly with your insurance if a claim arises. Each insurance company is different, so you may want to discuss this with your insurance agent/broker or insurance company.

The endorsement is a document that is separate from the Certificate of Insurance. The document confirms the County is covered by your policy for work associated with the Contract.

Having the document makes it easier for King County to work with the insurance company, if needed.

There are two different types of additional insured endorsement documents: "blanket" additional insured endorsement and scheduled additional insured endorsement. Both types of endorsement documents are acceptable. Please work with your insurance broker to get the additional insured endorsement document(s).