Insurance Requirements Guide - City of Knoxville

Insurance Requirements Guide - City of Knoxville

INSURANCEREQUIREMENTS GUIDETransfer of Risk Guide 1It is in the best interests of the City of Knoxville to promulgate insurance requirements that balance theprotection of the City and its human and physical assets with the encouragement of legitimategovernment and business pursuits and responsible personal and recreational activities within the Cityof Knoxville. Insurance requirements exist to protect the City’s human and physical assets and toenforce satisfactory financial transfer of risk to third parties.Requiring insurance offers special advantages. It provides a unified front to plaintiffs in the event of aliability claim. It limits conflicts among potential defendants and minimizes confusion following aclaim.This guide contains standard language for most situations. It also provides guidance for some of themore complicated situations that will be encountered. It will not provide the answers for everysituation. There may be special situations, which require more or less restrictive wording, higher orlower liability limits, or the elimination of some requirements. If these samples do not meet yourspecific situation, contact the City’s Risk Manager.Basic Insurance Requirements for ContractsIntroductionThe following insurance requirements are appropriate for most routine request for proposals (RFPs)and contracts such as the types listed below:constructionfireworksjanitorial servicemoverson-site equipmentplumbingpavingprofessional servicespecial event promoterstree maintenancetow serviceroad maintenancesecurity servicesThe following insurance requirements include minimum limits for most situations. Higher limitsshould be required for any hazardous activity, such as blasting or where the activity has a severe losspotential, such as construction close to highways, utility lines, or high-valued property. Theappropriate limits have very little to do with the amount of the contract. Instead they are determinedby the potential losses that could result from the activities covered by the contract.________________________1 Material in this section is based in part on: Insurance Requirements in Contracts, A Procedure Manual, published by Public Risk ManagementAssociation, Certificates of Insurance published by Risk and Insurance Management Society, Inc., and Contractual Risk Transfer published byInternational Risk Management Institute, Inc.City of Knoxville Insurance Requirements Guide - Oct. 2012 Page 1

INSURANCEREQUIREMENTS GUIDEBasic Insurance RequirementsThese basic requirements may be changed by other sections of this guide dealing with specific risks.Departments should contact the Risk/Benefits Manager whenever a requested service or contract maypose a unique risk that may not be contemplated by this guide.Contractor shall at its sole expense obtain and maintain in full force and effect for the duration of theAgreement and any extension hereof at least the following types and amounts of insurance for claimswhich may arise from or in connection with this Agreement. All insurance must be underwritten byinsurers with an A.M. Best rating of A-VIII or better.1. Commercial General and Umbrella Liability Insurance; occurrence versioncommercial general liability insurance, and if necessary umbrella liabilityinsurance, with a limit of not less than $2,000,000 each occurrence for bodilyinjury, personal injury, property damage, and products and completed operations.If such insurance contains a general aggregate limit, it shall apply separately to thework/location in this Agreement or be no less than$3,000,000.Such insurance shall:a. Contain or be endorsed to contain a provision that includes the City, itsofficials, officers, employees, and volunteers as additional insureds withrespect to liability arising out of work or operations performed by or onbehalf of the Contractor including materials, parts, or equipment furnishedin connection with such work or operations. The coverage shall containno special limitations on the scope of its protection afforded to the abovelistedinsureds. Proof of additional insured status up to and includingcopies of endorsements and/or policy wording will be required.b. For any claims related to this project, Contractor’s insurance coverageshall be primary insurance as respects the City, its officers, officials,employees, and volunteers. Any insurance or self-insurance programscovering the City, its officials, officers, employees, and volunteers shall beexcess of Contractor’s insurance and shall not contribute with it.c. At the sole discretion of the City, dedicated limits of liability for thisspecific project may be required.2. Automobile Liability Insurance; including vehicles owned, hired, and non-owned,with a combined single limit of not less than $1,000,000 each accident. Suchinsurance shall include coverage for loading and unloading hazards. Insurance shallcontain or be endorsed to contain a provision that includes the City, its officials,officers, employees, and volunteers as additional insureds with respect to liabilityarising out of automobiles owned, leased, hired, or borrowed by or on behalf ofContractor.3. Workers’ Compensation Insurance. Contractor shall maintain workers’ compensationinsurance with statutory limits as required by the State of Tennessee or other applicablelaws and employers’ liability insurance with limits of not less than $500,000. Contractorshall require each of its subcontractors to provide Workers’ Compensation for all of thelatter’s employees to be engaged in such work unless such employees are covered byContractor’s workers’ compensation insurance coverage. Such insurance shall include awaiver of subrogation in favor of the City. Proof of waiver of subrogation up to andincluding copies of endorsements and/or policy wording will be required.City of Knoxville Insurance Requirements Guide - Oct. 2012 Page 2

4. Other Insurance Requirements. Contractor shall:INSURANCEREQUIREMENTS GUIDEa. Prior to commencement of services, furnish the City with originalcertificates and amendatory endorsements effecting coverage required bythis section and provide that such insurance shall not be cancelled,allowed to expire, or be materially reduced in coverage except on 30 days’prior written notice to the City Attorney of Knoxville, P.O. Box 1631,Knoxville, Tennessee 37901. Proof of policy provisions regarding noticeof cancellation will be required.b. Upon the City’s request, provide certified copies of endorsements andpolicies in lieu of or in addition to certificates of insurance. Copies ofpolicies will only be requested when contracts are deemed to be extremelyor uniquely hazardous, include a dollar amount that is significant to theoverall budget of the City or a City Department, or the coverage(s) maynot follow standard insurance forms. A policy will only be requested afterthe City’s Risk Manager has reviewed the contract and proof of coveragehas been provided. Should the certificate of insurance refer to specificcoverage wording or endorsement(s), proof of such policy wording orendorsement(s) will be required.c. Replace certificates, policies, and endorsements for any such insuranceexpiring prior to completion of services.d. Maintain such insurance from the time services commence until servicesare completed. Failure to maintain or renew coverage or to provideevidence of renewal may be treated by the City as a material breach ofcontract.e. Place such insurance with insurer licensed to do business in Tennessee andhaving A.M. Best Company ratings of no less than A. Modification ofthis standard may be considered upon appeal to the City Law Director.f. Require all subcontractors to maintain during the term of the AgreementCommercial General Liability insurance, Business Automobile Liabilityinsurance, and Workers’ Compensation/Employer’s Liability insurance(unless subcontractor’s employees are covered by Contractor’s insurance)in the same manner as specified for Contractor. Contractor shall furnishsubcontractors’ certificates of insurance to the City without expenseimmediately upon request.g. Any deductibles and/or self-insured retentions greater than $50,000 mustbe disclosed to and approved by the City of Knoxville prior to thecommencement of services. Use of large deductibles and/or self-insuredretentions will require proof of financial ability as determined by the City.h. The insurer shall agree to waive all rights of subrogation against the City,its officers, officials, and employees for losses arising from workperformed by Contractor for the City. Proof of waiver of subrogation upto and including copies of endorsements and/or policy wording will berequired.i. All general liability policies must be written on an occurrence basis unlessthe Risk Manager determines that a claims made basis is reasonable in thespecific circumstance. Use of policies written on a claims made basisCity of Knoxville Insurance Requirements Guide - Oct. 2012 Page 3

INSURANCEREQUIREMENTS GUIDEmust be approved by the Risk Manager and retroactive dates and/orcontinuation dates must be provided to the City prior to commencement ofany work performed. Professional Liability and Environmental Liability(Pollution Coverage) are most commonly written on a claims made basisand are generally acceptable in that form.j. The City requires that a hold harmless and indemnification provision beincluded in each agreement or contract in order to protect the City againstany and all costs, losses, and damages arising out of the performance ofwork or rendering of services by an individual or an organization,contractor, or vendor, its agents, servants, or employees. The specificlanguage of the indemnification provision will be included in materialsprovided to prospective bidders/proposers.Contract ExceptionsAll contracts for goods or services without unusual risks require a minimum of $2,000,000 perincident/$3,000,000 aggregate in general liability coverage, with the following exceptions: Carpet installation under $25,000 Concessionaire or catering service (without alcohol) Construction rehab under $25,000 Consulting services under $25,000 (other than architectural orengineering) Door or window installation or repairs Façade work or awning work under $25,000 Fencing installation or repairs Gym floor refinishing Pest control services Special event workers (other than security or animal handlers) Uniform service/deliveryThe above listed contracts require only $1,000,000 per incident/$2,000,000 aggregate in generalliability coverage.Any waiver or modification of the insurance requirements can only be made by the City’s RiskManager or designee. Any such request must be submitted in writing to the Risk Managerexplaining the reasons for the modification or waiver. All requests will be reviewed and a finaldetermination rendered by the Risk Manager.City of Knoxville Insurance Requirements Guide - Oct. 2012 Page 4

INSURANCEREQUIREMENTS GUIDEAdditional ConsiderationsConstruction ContractsConstruction contracts may require additional insurance that will result in additional costs forcontractors and ultimately to the City (insurance may represent 1-4% of the construction cost).Construction contracts also represent significant exposures for the City. On large projects copies ofendorsements are preferable to certificates of insurance to ensure the required coverage is in place.The information below should be reviewed prior to preparing a contract or request for proposals forconstruction projects.The City’s property insurance does not cover a building until construction is complete and the City hastaken possession of it. During construction the partial structure should be protected as well assupplies, equipment, and tools that may be on the site. Builders’ Risk Insurance will provide thisprotection. The following language can be used to require this insurance.Builders’ Risk Insurance. Contractor shall procure and shall maintain or shall cause to beprocured and maintained Builders’ Risk Insurance on a replacement cost basis during theconstruction of the project. Insurance is to be on an “all risks” basis and shall insure againstthe perils of fire and extended coverage and physical loss or damage including, but notlimited to, theft, vandalism, malicious mischief, collapse, temporary building and debrisremoval including demolition occasioned by enforcement of any applicable legalrequirements and shall cover reasonable compensation for architect’s services and expensesrequired as a result of such insured loss. Insurance is to cover all property of Contractor (andits subcontractors) and the City of Knoxville at the construction site. Coverage shall coverthe completed value of the construction including without limitation, slab on grade,excavations, foundations, caissons, tenant finish work, and retaining walls around theperimeter of the project. Any exclusion of so-called underground damage to pipes, collapseof structure, or damage resulting from explosion or blasting shall be deleted. This coverageshall be issued on a completed value form basis for 100% of the insurable replacement valueof the project. Such policy shall provide that any loss thereunder shall be payable toContractor, the City of Knoxville, and others as their interests may appear and shall also havea replacement cost endorsement. The insurer shall waive all rights of subrogation against theCity. Partial occupancy or use shall not commence until the insurance company orcompanies providing the insurance have consented to such partial occupancy or use byendorsement or otherwise. Contractor shall be responsible for the deductible in the event of aloss.The following section should be added to the Other Insurance Requirements section in a contract forconstruction:Maintain liability coverage that shall include completed operations coverage, and Contractorshall maintain such coverage for a period of 2 to 5 years from the date of final acceptance ofthe project.City of Knoxville Insurance Requirements Guide - Oct. 2012 Page 5

INSURANCEREQUIREMENTS GUIDECommercial general liability policies usually automatically insure liability for the risks ofexplosion, collapse, and damage to underground property. Certain contractors must payadditional premiums to obtain these coverages. If the policy does not cover these risks, itwill have exclusions for the X, C, and U perils. When applicable, verification should beprovided by Contractor that these exclusions do not apply.In some situations Contractors’ Pollution Liability will be necessary if there is the possibilityof recovery pollutants from a construction project that could cause injury/loss to a third party.A surety bond is usually required to insure the contract is followed and to protect the City inthe event of Contractor insolvency. A performance bond is also required to protect the Cityin the event the contractor does not complete the project satisfactorily. Bonds provide thefollowing functions: guarantee the bonded project will be completed; guarantee the laborers,suppliers, and subcontractors will be paid even if Contractor defaults; provide anintermediary, the surety, to whom the City can air complaints or grievances and seek relief.If contracts are prepared for construction projects expected to exceed $60 million inconstruction costs, the feasibility of the City arranging commercial general liability andworkers’ compensation for all contractors and subcontractors on-site should be considered.This method of dealing with the exposure problems of a construction project of this size iscalled a wrap-up program or Owner Controlled Insurance Program (OCIP). Large scaleconstruction projects that involve numerous contractors, subcontractors, consultants, andother parties, all with different risks and abilities to respond to claims, may require such acomprehensive program to assure adequate protection for the City and allow for costssavings. Contact the City’s Risk Manager if you think a project is a candidate for a wrap-upinsurance program.Higher LimitsIn some cases additional coverage above the primary level of liability insurance or higherlimits is needed because of the scope of the contract or the significance of the exposure toloss in terms of either severity or frequency. Examples of the type contract which willrequire higher limits are large construction projects, blasting, construction close to a publicroad or utility lines, spraying of pesticides, backhoe operations near utilities, and workdealing with environmental exposures. The amount of additional or excess insurancerequired would depend upon the specific scope of services in the contract and the exposure itrepresents, not the dollar value of the contract. If excess liability is required, the followingsubsection should be added to the insurance requirements.Excess Liability Insurance. Contractor shall maintain excess liability insurance inaddition to the insurance specified above with a limit of not less than (amount to beinserted will depend on the scope of the contract, typical amounts are $2 million, $5million, and $10 million) each occurrence. This coverage shall be on a follow formbasis.City of Knoxville Insurance Requirements Guide - Oct. 2012 Page 6

INSURANCEREQUIREMENTS GUIDEEnvironmental ExposuresInsurance specifically written to cover environmental losses is needed in situations where there is anexposure for environmental impairment such as waste disposal or landfill that will not be coveredunder the liability insurance in most cases. It may be advisable in agreements involving wastedisposal sites to require nonowned disposal site coverage. If environmental impairment liability isrequired, the following subsection should be added:Environmental Impairment Liability. Contractor shall maintain environmental impairmentliability insurance with limits of not less than $1,000,000 per occurrence.If coverage is only available on a claims-made basis, additional language protecting the City’sinterests will be needed. Contact Risk Management for additional language requirements.When a contract involves the removal of asbestos, a disposal site for asbestos, or any environmentalservice, the contract should request the coverage below in addition to the basic requirements. The typeof insurance required will depend on the services provided. For example, an asbestos removal contractwould require different coverage than an environmental consultant’s professional services contract.Limits for many environmental contracts will require higher limits because of the scope of the workinvolved and the potential liability. Since this type of insurance may be in non-standard wording or ona claims-made basis, it may be prudent to ask that the actual policy be submitted for review. If thepolicy is not available, copies of the endorsements and the ISO form number will help the Citydetermine if the coverage is adequate. Insurance provisions that should be added to contracts forenvironmental services follow:Pollution Liability Insurance. Contractor should procure pollution liability coverage, ISOCG 0039, or equivalent. If the coverage is written on a claims-made form:1. The “Retro Date” must be shown and must be before the date of thecontract or the beginning of contract work.2. Insurance must be maintained and evidence of insurance must be providedfor at least five (5) years after completion of the contract work andacceptance by the City.3. If coverage is cancelled or non-renewed and not replaced with anotherclaims-made policy form with a “Retro Date” prior to the contracteffective date, Contractor must purchase “extended reporting” coveragefor a minimum of five (5) years after completion of contract work.4. A copy of the claims reporting requirements must be submitted to the Cityfor review.Asbestos Abatement contracts will require the following language in the general liability section:City of Knoxville Insurance Requirements Guide - Oct. 2012 Page 7

INSURANCEREQUIREMENTS GUIDEThe general liability policy (or separate Asbestos Abatement policy) shall be endorsed toinclude the following provisions:1. Coverage for asbestos abatement operations as described by the contract;2. Pollution coverage as respects asbestos for all phases of the abatementprocess.3. Coverage for the placement and movement of hazardous materials fromthe project site to the final disposal location.4. Asbestos bodily injury coverage for employees of the City, generalcontractor and subcontractors so long as their designated job duties do notrequire them to be in the regulated asbestos abatement area; and5. Waiver of subrogation in favor of the City.If a consultant is retained to determine the scope of pollution on a piece of property, the followinginsurance should be required:Professional Liability Insurance (or a “Consultant’s Environmental Liability Policy”combining coverage for professional liability and for Contractor’s pollution liability); withrespect to all work performed by or on behalf of Consultant (or, with respect to insurancemaintained by a subcontractor, by or on behalf of such subcontractor) under or in connectionwith this Agreement or any Task Release, covering claims from any act, error, or omissioncommitted in connection with Consultant’s (or subcontractors, as the case may be)performance of any such work. Such policy shall not contain any exclusions or limitationsregarding the release of asbestos or other pollutants. The limits of liability shall not be lessthan Two Million Dollars ($2,000,000) per claim or in the aggregate. If coverage is writtenon a claims-made basis, coverage with respect to work performed in connection with a givenTask Release shall be maintained for a period of three (3) years after the date of finalpayment with respect to such Task Release and shall provide for an extended reportingperiod of not less than twelve (12) months.Administrative ServicesThe following provision is appropriate for contracts for administrative services in which Contractoris handling City funds.Fidelity Bonds. a fidelity bond shall be in favor of the City of Knoxville continuous in formand in an amount equal to at least ten percent of the amount of the funds handled or managedannually by the administrator, or, if no funds were handled during the preceding year, tenpercent of the amount of funds reasonably estimated to be handled during the currentcalendar year. In no event will the fidelity bond be less than $100,000.The bond shall inure to the benefit of any person damaged by any fraudulent act or conductof the administrator and must be conditioned upon faithful accounting and application of allmoney coming into the administrator’s possession in connection with his activities as anadministrator.City of Knoxville Insurance Requirements Guide - Oct. 2012 Page 8

INSURANCEREQUIREMENTS GUIDEProfessional ServicesLosses due to professional negligence may be excluded in commercial general liability policies andnecessitate the use of additional insurance. Professional liability insurance can protect the City againstlosses that occur when a claim arises out of the negligence or omission of a professional (e.g.,engineering, architectural services, investment management, claims administration, auditing services,consulting, attorneys, appraisers, social workers, medical professionals and professional managers).The indemnification (hold harmless) section of the contract should state that the consultant agrees toindemnify the City for bodily injury or property damage arising out of Contractor’s negligent acts oromissions in performance of the work. The following is suggested language that can be used for thesection requiring professional liability insurance; however, larger limits may be needed for somecontracts.Professional Liability (including Errors & Omissions). Contractor shall maintainprofessional liability insurance covering claims arising from real or alleged errors, omissions,or negligent acts committed in the performance of professional services under this contractwith limits of $1,000,000.Some professionals (computer software development professionals, third party administrators, andmanagement consultants) cannot obtain a professional liability policy because their industry does notlicense them. These professionals can be specifically endorsed on a general liability policy.Verification that professional services are not excluded from the general liability coverage form maybe required. Additionally, some professionals may purchase a combined general liability andprofessional liability policy. Such coverage is allowable provided that the limits are separate for eachcoverage line and/or sufficient aggregate limits for the contract are provided. As noted in thefollowing paragraphs, combined general and professional liability policies may prevent obtainingadditional insured endorsements and/or dictate that the coverage be on a claims made basis.-Additional insured endorsements are not available on professional liability policies. This isbecause the City is neither the named professional nor an employee under the control of thenamed insured professional.Professional liability coverage is often written on a claims-made basis. If the policy is on a claimsmadeform, consideration should be given to requiring Contractor to comply with the followingadditional conditions:1. Agree to provide certificates of insurance evidencing the required coverage for aperiod of two years after the final payment under this contract is made. Suchcertificates shall evidence a retroactive date no later than the beginning ofContractor’s or subcontractors’ work under this contract, or2. Purchase an extended (minimum two years) reporting period endorsement for thepolicy or policies in force during the term of this contract and evidence the purchaseof this extended reporting period endorsement.Security Services ContractsSecurity Services firms may request an insurance provision that stipulates that they are not an insurerand that insurance shall be obtained by the client. Some security service firms have tried to limit theCity’s recovery to $250. Such provisions shall not be allowed. The security service firm should berequired to maintain adequate liability insurance with the City of Knoxville as an additional insured.City of Knoxville Insurance Requirements Guide - Oct. 2012 Page 9

INSURANCEREQUIREMENTS GUIDESpecial SituationsThe City has a number of contracts for which the above insurance requirements are not appropriate.Examples are contracts with an entity that has its liability limited by the Tennessee Governmental TortLiability Act or contracts with small nonprofit groups that involve a small risk. The insuranceprovisions for these contracts should be determined on a case-by-case basis. If you have questionsabout the appropriate requirements, contact the City’s Risk Manager for assistance in these situations.Insurance Requirementsfor LeasesIntroductionThe basic insurance provisions can be used for tenants of buildings the City owns if no autos are usedor commercially parked on the premises. The requirements for property insurance may not benecessary because coverage may be provided by the City’s property insurance coverage. Pleaseconsult Risk Management if you have questions about specific locations.Insurance RequirementsLessee shall at its sole expense obtain and maintain in full force and effect for the duration of theAgreement and any extension hereof at least the following types and amounts of insurance for claimswhich may arise from or in connection with this Agreement.1. Commercial General Liability Insurance; occurrence version commercial generalliability insurance or equivalent form with a limit of not less than $1,000,000 eachoccurrence. If such insurance contains a general aggregate limit, it shall applyseparately to this Agreement or be no less than two times the occurrence limit.Such insurance shall include the City, its officials, officers, and employees asinsureds with respect to performance of services. The coverage shall contain nospecial limitations on the scope of its protection afforded to the above-listedinsureds. Insurance shall be primary with respect to any insurance or self-insuranceprograms covering the City, its officials, officers, employees, and volunteers.2. Property Insurance (if lessee is required to insure the entire building); “All-Risk”form building and personal property insurance policy to insure this property. Ifcoinsurance is used, the property limits must be sufficient so as to avoid anycoinsurance penalty or coverage reduction. The insurance policy will contain thefollowing clauses:a. All rights of subrogation are hereby waived against the City, itsofficers, employees, and agents.b. A standard loss payee clause naming the City as loss payee.City of Knoxville Insurance Requirements Guide - Oct. 2012 Page 10

INSURANCEREQUIREMENTS GUIDE3. Property Insurance (if lessee is only required to insure tenant improvements orbetterments). Lessee shall purchase property insurance against all risks of loss toany tenant improvements or betterments. Insurance shall be for full replacementcost with no coinsurance penalty provision.Lessee shall:1. Prior to commencement of Lease, furnish the City with property executedcertificates of insurance which shall clearly evidence all insurancerequired in this section and provide that such insurance shall not becancelled, allowed to expire, or be materially reduced in coverage excepton 30 days’ prior written notice to the City. The proof of coverage is to bereceived and approved by the City before the Lease commences.2. Provide certified copies of endorsements and policies if requested by theCity in lieu of or in addition to certificates of insurance.3. Replace certificates, policies, and endorsements for any such insuranceexpiring prior to expiration of Lease.4. Maintain such insurance from the time Lease commences until Lease isterminated.5. Place such insurance with insurer licensed to do business in Tennessee andhaving A.M. Best Company ratings of no less than A.Additional Requirements/ConsiderationsAuto liability may be required if autos are used or commercially parked on the premises. If thetenant’s activities include valet parking, either with or without a fee, garage keepers’ legal liabilitymay be required. The required limit for this coverage should be equal to the value of the maximumnumber of automobiles that may be in the tenant’s custody.If Contractor (such as social or charitable organization) does not have full-time employees, theworkers’ compensation may not be necessary.If the other party’s property might be construed as being in the custody of the City, such as storage ofequipment on City-owned or controlled premises, the exposure may be reduced by appropriatelanguage in the hold harmless section of the contract.City of Knoxville Insurance Requirements Guide - Oct. 2012 Page 11

INSURANCEREQUIREMENTS GUIDEInsurance Requirementsfor Special EventsEvent Insurance – Waiver/ModificationThe City’s Risk Manager, at his/her discretion, may authorize a greater or lesser amount ofcoverage or different type of coverage than required by this policy if the special event is of ademonstrated high- or low-risk category, according to recognized insurance and riskmanagement industry standards. High-risk events requiring a greater amount of coverage tobe determined by the Risk Manager include, but are not limited to, those with loadedweapons, pyrotechnics, or mechanical or inflatable rides.Minimum $1,000,000 per incident/$2,000,000 aggregate coverageAll events held on City property or in City facilities require a minimum of $1,000,000 perincident/$2,000,000 aggregate coverage, with the following exceptions:1. Events Not Requiring InsuranceThe following non-sports events with less than 100 anticipated attendance and withoutstreet/road closures, alcohol, loaded weapons, pyrotechnics, mechanical or inflatable rides,the use or display of animals*, or resulting in fundraising or profit do not require insurance:Academic related events (such as spelling/math/science)Award celebrationsBanquetsBingo/card/board games (not for fundraising)Clubs and organizational meetingsCelebrations (weddings, anniversaries, birthdays)DebutsGraduationsHead of state eventsLectures and reading events (other than product or service promotions)LuncheonsMeetings of a social, academic, business or philosophical nature (other than fundraising)RecitalsReunionsSeminars (other than product or service promotions)Social ReceptionsTeleconferences*Exclusion does not apply to participants in events requiring the use of service animals.2. Events Requiring $2,000,000 per incident/$3,000,000 aggregate coverageThe following non-sports events without loaded weapons, pyrotechnics, or mechanical orinflatable rides require a minimum of $2,000,000 per incident/$3,000,000 aggregatecoverage:City of Knoxville Insurance Requirements Guide - Oct. 2012 Page 12

INSURANCEREQUIREMENTS GUIDENote: Any serving of alcohol must be with properly licensed and insured bartenders andproof of license and insurance will be required.Events involving the use or display of animals or to which participants are encouraged tobring animals (other than service animals)Events which involve serving or sale of alcoholEvents involving closure of roads or streetsBlock parties and street fairsDances and parties outdoorsExhibitions outdoorsOvernight campingWaterslidesWeapons (unloaded) showsThe following sports events without loaded weapons, pyrotechnics, or mechanical orinflatable rides require a minimum of $2,000,000 per incident/$3,000,000 aggregatecoverage:Note: Any serving of alcohol must be with properly licensed and insured bartenders andproof of license and insurance will be required.Animal ridingBoxingCheerleadingDemolition eventsFootball (contact)Golfing eventsGymnasticsIce hockeyIn-line hockeyMarathonsMartial arts (contact)Motorized racingOff-road racingPoloRodeosRopes coursesRugbySkating (open to public)SkateboardingSpeed skatingSwimming and diving (unorganized or lessons)TriathlonsWeightliftingWrestlingExpressive Activity“Expressive Activity” is any assembly, the sole or principal purpose of which is theexpression, dissemination, or communication by verbal, visual, literary, or auditory means, ofa particular opinion, view or idea, and for which no fee or donation is charged or required asa condition of participation in or attendance at such activity, including public oratory anddistribution of literature.Waiver of the insurance requirement shall be made if the event is solely for expressiveactivity, provided that the applicant has filed with the Risk Manager a verified statement thatthe applicant intends the special event purpose to be solely for a First Amendmentexpressive activity.City of Knoxville Insurance Requirements Guide - Oct. 2012 Page 13

INSURANCEREQUIREMENTS GUIDESelf InsuranceThe City’s Risk Manager shall review all certifications of self insurance for appropriateness,including any required documentation demonstrating financial solvency.TULIP (Tenant User Liability Insurance Policy) ProgramThe City of Knoxville offers a TULIP Program, which provides for a general liability policy thatcan be accessed by those using City properties for various events. The policy providescoverage to the user as well as to the City for the specific event. Because the policy isunderwritten based on the broad range of events that take place on City properties, it maybe more reasonably priced than policies obtained individually. The policy can be easilyobtained online and is customized to meet the City’s requirements. Users are not required topurchase this policy but may procure their own policy to meet the insurance requirementsfor events. Follow the instructions below to obtain a quote for your event:1. Log on to For Events requiring $1,000,000 per occurrence in coverage, please choose code 2495(City of Knoxville I). For events requiring $2,000,000 per occurrence in coverage, pleasechoose code 2494 (City of Knoxville II).3. Choose the location of your event in the drop down box.4. Please choose the type of event that will be held on City property. If your event does notfit one of the listed categories, please contact the City’s Risk Management Department forfurther instructions.5. Answer the underwriting questions and press next. Please make sure to includeinformation on liquor service as well as vendors who need coverage as directed.6. After all underwriting questions are answered, you will be provided an insurance quotefrom for your event. If this quote is satisfactory, please continue to enter policy holdercontact information.7. Enter credit card information in order to purchase the policy online. Once the transactionis complete, the policy will be delivered to you electronically and a certificate of insurancewill be delivered to the City’s Special Events and Risk Management Department. Shouldthere be any issues, someone from the City will be contacting you. Otherwise, you have metthe insurance requirement for your event.8. Should you have any questions about the Insurance Requirements for events, pleasecontact the City’s Risk Management Department at 865-215-2111. Should you haveproblems accessing or using the online program, please contact One Beacon Entertainmentat 1-800-507-8414. To obtain more information about the policy, users may contact StevenMcGhee at 865-583-3752.City of Knoxville Insurance Requirements Guide - Oct. 2012 Page 14

INSURANCEREQUIREMENTS GUIDECertificates of InsuranceBackgroundThe best proof of coverage is a properly executed endorsement to the insurance policy. It is notpractical to require the endorsement for every contract so the City allows certificates of insurance to besubmitted in most situations. You should keep in mind, however, what an insurance certificate is not.Insurance certificates do not:Modify the insurance policyAutomatically make the City an additional insuredProvide coverage detailsGuarantee that the coverage limits stated are still available. They couldhave been exhausted by claimsProvide the certificate holder any special rightsDisclose how many other entities are sharing the limitsGuarantee that coverage is still in place.Place any obligation on the insurer to provide coverageWhat a certificate does provide is information about the insurance in place at the point in time whenthe certificate was issued.Most but not all certificates will be on an ACORD form. ACORD is an acronym for AgencyCompany Organized Research and Development, an industry-supported non-profit agency. Somecertificates are specifically designed for the broker, insurance company, or insured.Certificate of Insurance ChecklistThe numbers in parenthesis refer to the sample certificate of insurance marked Exhibit A at the end ofthis section. If you have any questions or problems regarding any particular Certificate of Insurance,contact the City Risk Manager.A common problem with certificates is that they have the City only listed in the box on the lower leftside of the certificate titled Certificate Holder . This does not mean that the City is an additionalnamed insured. It only means that the City has possession of the certificate. There must be additionallanguage on the certificate that clearly states that the City is an insured. Sometimes this language is inthe description and will say that the certificate holder is also an insured. There should be no speciallimitation on the additional insured status of the City. For example, a restriction that ties additionalinsured status only to claims arising out of the sole negligence of Contractor does not confer therequired coverage. The most recent standard certificates also include a second page that limitsadditional insured status and waiver of subrogation. Special attention should be paid to this wordingas additional documentation will be required to meet the City’s requirements. On certain occasions, itwill be necessary to request a copy of the entire policy.On a large contract it may be advisable to require Contractor to provide a list of exclusions. It ispossible that the service being provided is excluded in the liability policy. For example, many policiesexclude engineering and architectural services. Other areas that may not be covered are pollution,breach of contract, and employers’ liability for personnel actions.The name of the insurance company providing coverage is usually on the top right side of thecertificate. The basic insurance requirements call for an insurance company with an A.M. BestCity of Knoxville Insurance Requirements Guide - Oct. 2012 Page 15

INSURANCEREQUIREMENTS GUIDECompany rating of no less than A. The A.M. Best’s Key Rating Guide is available in RiskManagement. This guide provides an independent evaluation of companies’ financial strength andoperating performance. The basic insurance requirements are for a company with A.M. BestCompany ratings of no less than A.The producer should be clearly marked on the certificate. In the event a claim occurs and theinsurance company refuses to honor the certificate, the City may have a course of action against theerrors and omissions (E & O) coverage of the producer (broker or agent).The job or operation to which a certificate applies should be identified on the certificate. In the eventof a claim there should be no confusion that the described insurance applies to the activity, which isthe subject of the contract.The Cancellation box on the lower right side of the certificate should be modified. The standardwording on the ACORD form and other certificate of insurance forms include language that theinsurance company will endeavor to notify the certificate holder if the insurance is cancelled; i.e., theinsurance company has no obligation to notify the City if the insurance is cancelled. This requirementmay meet strong resistance from some insurance companies. The most recent ACORD form haschanged this box, so special attention should be paid to make sure that notice of cancellation will beprovided to the City. Endorsement or policy wording may be required to insure that the City is given30 days notice of cancellation for anything other than non-payment.The policy effective date and policy expiration date should be checked for compliance with thebeginning date of the contract. Insurance policies will often expire before the end of the contractperiod. Risk Management will contact Contractor two months prior to the expiration of the insurancepolicy to get an updated certificate. If an updated certificate of insurance has not been received twoweeks before the current insurance expires, Risk Management will notify the attorney who preparedthe contract. No contract should be allowed to remain in force without evidence of coverage.The aggregate limits shown on the certificate are the total limits available for all losses from alloperations of Contractor (or other named insured) during the policy term unless there are specialpolicy endorsements to the policy. The limits apply to losses from other projects of the namedinsured, all premises rented or owned by the insured, and liability coverage contractually provided toother certificate holders. The limits for each occurrence must be at least as much as required by thecontract unless there is excess liability insurance to bring the coverage up to the required limits.Some liability insurance coverage may be on a claims-made basis, not occurrence. Most of theinsurance requirements in this guide require insurance to be on an occurrence form. Claims-madeinsurance can present coverage problems for the City. Claims-made insurance only covers claims thatare made during the policy period regardless of when the claims occurred. Professional liability andpollution liability are two examples of coverage that are usually on a claims-made basis. In bothexamples, the occurrence that gives rise to the ultimate claim might not be discovered until years afterthe contract has expired. For some exposures, however, claims-made is the only coverage available.If the policy is written on a claims-made basis, the certificate should contain the “retro date.” This isthe earliest date a claim could occur and be covered by the policy. If you have questions about theappropriate coverage in a particular contract, contact Risk Management.City of Knoxville Insurance Requirements Guide - Oct. 2012 Page 16

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