Contracts Management Guide - Texas Comptroller of Public Accounts

Workers Compensation – Minimum coverage for employer liability as determined by the Texas
Department of Insurance.
Contractor shall obtain and maintain in full force at all times during the term of this contract insurance
coverage naming the State of Texas, acting through the agency name, as an additional insured and loss payee
on its policies described below.
Comprehensive General Liability in the amount of: [insert amount appropriate for the specific
purchase] per occurrence and of [insert amount appropriate for the specific purchase] in the aggregate.
Business Automobile Liability Insurance for all owned, non-owned and hired vehicles with a
minimum combined limit of: [insert amount appropriate for the specific purchase] per occurrence for
bodily injury and property damage.
If insurance policies are not written for amounts specified above, Contractor shall carry Umbrella or
Excess Liability Insurance for any differences in amounts specified. If Excess Liability insurance is
provided, it shall follow the form of the primary coverage.
Professional Liability Insurance with the limits of: [insert amount appropriate for the specific
purchase] per claim. [This type of insurance is only necessary for required for specific types of services
wherein the actions directed or recommended by professionals may put the agency at risk. lxxxii]
Each policy of required insurance shall provide for ten (10) days written notice of cancellation to (name of
agency) and include the following provisions. "It is a condition of this policy that the Company shall
furnish written notice to agency name and address ten (10) days in advance of any reduction in, or
cancellation of this policy."
Insurance shall be effective and evidence of acceptable insurance furnished to agency name, prior to
commencing any operations under this contract.
The amount and type of insurance may change depending on the type and subject of the solicitation.
Agencies should refer to their legal department for direction on the type and amount of insurance
coverage requirements. Director or officer liability insurance coverage may also be required to protect the
state’s interests as per §2261.102, Government Code.
Abandonment or Default
If the contractor defaults on the contract, agency name reserves the right to cancel the contract without
notice and either re-solicit or re-award the contract to the next best responsive and responsible
respondent. The defaulting contractor will not be considered in the re-solicitation and may not be
considered in future solicitations for the same type of work, unless the specification or scope of work
significantly changed. The period of suspension will be determined by the agency based on the
seriousness of the default.
In accordance with §2261.101, Government Code Remedies and Sanctions lxxxiii – agencies shall
incorporate language which shall hold contractors accountable for breach of contract or substandard
performance without unfairly limiting competition.
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