[Code of Federal Regulations]

[Title 24, Volume 4]

[Revised as of April 1, 2006]

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 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.



[[Page 472]]



    (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]