[Code of Federal Regulations]
[Title 7, Volume 11]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR1788.11]

[Page 1121]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER XVII--RURAL UTILITIES SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 1788--RUS FIDELITY AND INSURANCE REQUIREMENTS FOR ELECTRIC AND TELECOMMUNICATIONS BORROWERS--Table of Contents
 
    Subpart B--Insurance for Contractors, Engineers, and Architects, 
                           Electric Borrowers
 
Sec. 1788.11  Minimum insurance requirements for contractors, engineers, and architects.


    (a) Each electric borrower shall include the provisions in this 
paragraph in its agreements with contractors, engineers, and architects, 
said agreements that are wholly or partially financed by RUS loans or 
guarantees. The borrower should replace ``Contractor'' with ``Engineer'' 
or ``Architect'' as appropriate.

    1. The Contractor shall take out and maintain throughout the period 
of this Agreement insurance of the following minimum types and amounts:
    a. Worker's compensation and employer's liability insurance, as 
required by law, covering all their employees who perform any of the 
obligations of the contractor, engineer, and architect under the 
contract. If any employer or employee is not subject to workers' 
compensation laws of the governing State, then insurance shall be 
obtained voluntarily to extend to the employer and employee coverage to 
the same extent as though the employer or employee were subject to the 
workers' compensation laws.
    b. Public liability insurance covering all operations under the 
contract shall have limits for bodily injury or death of not less than 
$1 million each occurrence, limits for property damage of not less than 
$1 million each occurrence, and $1 million aggregate for accidents 
during the policy period. A single limit of $1 million of bodily injury 
and property damage is acceptable. This required insurance may be in a 
policy or policies of insurance, primary and excess including the 
umbrella or catastrophe form.
    c. Automobile liability insurance on all motor vehicles used in 
connection with the contract, whether owned, non-owned, or hired, shall 
have limits for bodily injury or death of not less than $1 million per 
person and $1 million each occurrence, and property damage limits of $1 
million for each occurrence. This required insurance may be in a policy 
or policies of insurance, primary and excess including the umbrella or 
catastrophe form.
    2. The Owner shall have the right at any time to require public 
liability insurance and property damage liability insurance greater than 
those required in paragraphs (a)(1)(b) and (a)(1)(c) of this section. In 
any such event, the additional premium or premiums payable solely as the 
result of such additional insurance shall be added to the Contract 
price.
    3. The Owner shall be named as Additional Insured on all policies of 
insurance required in (a)(1)(b) and (a)(1)(c) of this section.
    4. The policies of insurance shall be in such form and issued by 
such insurer as shall be satisfactory to the Owner. The Contractor shall 
furnish the Owner a certificate evidencing compliance with the foregoing 
requirements that shall provide not less than 30 days prior written 
notice to the Owner of any cancellation or material change in the 
insurance.

    (b) Electric borrowers shall also ensure that all architects and 
engineers working under contract with the borrower have insurance 
coverage for Errors and Omissions (Professional Liability Insurance) in 
an amount at least as large as the amount of the architectural or 
engineering services contract but not less than $500,000.
    (c) The borrower may increase the limits of insurance if desired.
    (d) The minimum requirement of $1 million of public liability 
insurance does not apply to contractors performing maintenance work, 
janitorial-type services, meter reading services, rights-of-way mowing, 
and jobs of a similar nature. However, borrowers shall ensure that the 
contractor performing the work has public liability coverage at a level 
determined to be appropriate by the borrower.
    (e) If requested by RUS, the borrower shall provide RUS with a 
certificate from the contractor, engineer, or architect evidencing 
compliance with the requirements of this section.