[Code of Federal Regulations]
[Title 24, Volume 4]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR965.215]

[Page 471-472]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
CHAPTER IX--OFFICE OF ASSISTANT SECRETARY FOR PUBLIC AND INDIAN HOUSING, 
               DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
 
PART 965--PHA-OWNED OR LEASED PROJECTS--GENERAL PROVISIONS--Table of Contents
 
                 Subpart B--Required Insurance Coverage
 
Sec. 965.215  Lead-based paint liability insurance coverage.

    (a) General. The purpose of this section is to specify what HUD 
deems reasonable insurance coverage with respect to the hazards 
associated with lead-based paint activities that the PHA undertakes, in 
accordance with the PHA's ACC with HUD. The insurance coverage does not 
relieve the PHA of its responsibility for assuring that lead-based paint 
activities are conducted in a responsible manner.
    (b) Insurance coverage requirements. When the PHA undertakes lead-
based paint activities, it must assure that it has reasonable insurance 
coverage for itself for potential personal injury liability associated 
with those activities. If the work is being done by PHA employees, the 
PHA must obtain a liability insurance policy directly to protect the 
PHA. If the work is being done by

[[Page 472]]

a contractor, the PHA must obtain, from the insurer of the contractor 
performing this type of work in accordance with a contract, a 
certificate of insurance providing evidence of such insurance and naming 
the PHA as an additional insured; or obtain such insurance directly. 
Insurance must remain in effect during the entire period of lead-based 
paint activity and must comply with the following requirements:
    (1) Named insured. If purchased by the PHA, the policy shall name 
the PHA as insured. If purchased by an independent contractor, the 
policy shall name the contractor as insured and the PHA as an additional 
insured, in connection with performing work under the PHA's contract 
pertaining to lead-based paint activities. If the PHA has executed a 
contract with a Resident Management Corporation (RMC) to manage a 
building/project on behalf of the PHA, the RMC shall be an additional 
insured under the policy in connection with the PHA's contract related 
to lead-based paint activities. (The duties of the RMC are similar to 
those of a real estate management firm.)
    (2) Coverage limits. The minimum limit of liability shall be 
$500,000 per occurrence written, with a combined single limit for bodily 
injury and property damage.
    (3) Deductible. A deductible, if any, may not exceed $5,000 per 
occurrence.
    (4) Supplementary payments. Payments for such supplementary costs as 
the costs of defending against a claim must be in addition to, and not 
as a reduction of, the limit of liability. However, it will be 
permissible for the policy to have a limit on the amount payable for 
defense costs. If a limit is applicable, it must not be less than 
$250,000 per claim prior to such costs being deducted from the limit of 
liability.
    (5) Occurrence form policy. The form used must be an ``occurrence'' 
form, or a ``claims made'' form that contains an extended reporting 
period of at least five years. (Under an occurrence form, coverage 
applies to any loss regardless of when the claim is made.)
    (6) Aggregate limit. If the policy contains an aggregate limit, the 
minimum acceptable limit is $1,000,000.
    (7) Cancellation. In the event of cancellation, at least 30 days' 
advance notice is to be given to the insured and any additional insured.
    (c) Exception to requirements. Insurance already purchased by the 
PHA or contractor and enforced on the day this section is effective 
which provides coverage for lead-based paint activities shall be 
considered as meeting the requirements of this section until the 
expiration of the policy. This section is not applicable to architects, 
engineers or consultants who do not physically perform lead-based paint 
activities.
    (d) Insurance for the existence of lead-based paint hazards. A PHA 
may also purchase special liability insurance against the existence of 
lead-based paint hazards, although it is not a required coverage. A PHA 
may purchase this coverage if, in the opinion of the PHA, the policy 
meets the PHA's requirements, the premium is reasonable and the policy 
is obtained in accordance with applicable procurement standards. (See 
part 85 of this title and Sec. 965.205 of this title.) If this coverage 
is purchased, the premium must be paid from funds available under the 
Performance Funding System or from reserves.

[59 FR 31930, June 21, 1994, as amended at 64 FR 50228, Sept. 15, 1999]