Overview
This section prescribes the mandatory and discretionary contract clauses regarding cargo and liability insurance for federal solicitations and contracts involving transportation or transportation-related services.
Key Rules
- Cargo Insurance (FAR 52.228-9): The Contracting Officer (CO) must include this clause in transportation contracts unless the freight is shipped under rates subject to released or declared value.
- Vehicular and General Public Liability Insurance (FAR 52.228-10): The CO must include a clause substantially the same as this one if they determine that the liability insurance required by law is insufficient to protect the government's interest.
- Applicability: These rules specifically target services related to the movement of goods or the management of transportation assets.
Practical Implications
- Contracting Officers must perform a risk assessment to determine if standard legal insurance minimums are adequate or if the specific nature of the transportation service requires the supplemental protection of FAR 52.228-10.
- Contractors should review freight rate structures (released vs. declared value) to understand their cargo insurance obligations under FAR 52.228-9.