Office of Risk Management

Risk Management Policy and Procedure Manual

Part 4 Miscellaneous Liability Issues

Subject: Vendor Certificates of Insurance

  1. Purpose:

    When an institution contracts with a vendor for materials, equipment, supplies, or services, that vendor's activities and the goods provided create an inherent liability risk to the institution. The goal of this program is to protect the institution from loss or exposure to loss resulting from any negligence on the part of an under/uninsured vendor who furnishes services to the institution. By obtaining an appropriate certificate of insurance and maintaining a current certificate of insurance on file, for a high risk procurement, the institution has evidence that insurance has been obtained which transfers risks associated with the business relationship with the vendor from the institution to the insurer.

    This document reinforces and adds to policy as established under State Procurement PRO-D-34. Due to the uniqueness of some services provided to the UW System, System Risk Management has added six additional high risk services to the ones listed in PRO-D-34. These high risk service vendors are required to meet the certificate requirements as specified in PRO-D-34 and in this document for the additional service vendors.

  2. Definitions:

    Certificate of Insurance:
    A document issued by an insurer which evidences that an insurance policy exists and provides information such as insurer, insurance agency, insured, types of insurance, policy numbers, effective dates, limits, certificate holder, cancellation procedure, special Provisions, e.g., additional insured, and the name of the representative authorizing the policy.
    High Risk Services Procurement:
    Means a contract or procurement that significantly increases the possibility of loss or exposure to loss to the University System from a third party.
    Additional Insured:
    Affords the Board of Regents coverage under the vendor's policy including defense should the Board be sued based on the actions of the vendor.
    Minimum Limits:
    Minimum specified limits must be received unless prior approval is received by the Purchasing Director. These limits may be reached by combining a commercial general liability policy limit with an umbrella policy limit. For example, a vendor may have a general/automobile liability policy with a $500,000 limit and a $1,000,000 umbrella. This total meets a $1,000,000 general/automobile/umbrella requirement.
  3. Vendors Insurance Program:

    The Standard Limits are the minimum acceptable for any vendor, but there are specific requirements for vendors of high risk services that supersede the Standard Limits. Please refer to PRO-D-34 and this document before specifying vendor coverage requirements. If commodity purchase requires installation of heavy equipment, contact Risk Management.

    The following are criteria and a list of high risk services.

    Criteria of High Risk Services:

    • Service presents a severe risk of injury or death to students, faculty, staff, and visitors.
    • Service presents a severe risk of extensive property damage to institutionally or privately owned property.
    • Service has a history of negligently causing injury or damage to property.
    • Likelihood is great the service provider will have difficulty procuring and maintaining insurance because of the hazards of the work.

    High Risk Services:

    High Risk services, other than the above, are to be evaluated on a case-by-case basis.

    The following pages delineate the requirements for each class of vendor and provide a list of vendor types for each class. Judgment must be used by the contract manager when dealing with vendors that are not specified on these pages.

    Attention must be paid to the various outside contractors who service the institutions with respect to their insurance protection. Failure to monitor this exposure by the contract manager may result in substantial losses for the institution.

    Certificates are required for all service vendors; however, high risk service vendors require receipt of the certificate and continued renewal of the certificate while the contract exists. Internal audit will periodically sample the service contracts to ensure compliance.

  4. Cancellation:

    If a certificate of insurance is not received prior to issuance of the Purchase Order or is incomplete, notice should be given to the vendor indicating the certificate must be received by the contract administrator, via certified mail within 15 days or the contract will be canceled. See sample letter shown in Appendix 1. Receipt of one certificate from the vendor is all that is necessary for that one year, if the institution has multiple contracts with the vendor. However, the vendor must send a renewal each year or cancellation should take place. Appendix 2 is a sample letter for noncompliance after the 15 day period.

  5. Procedures:

    Specific procedures for the evaluation of vendor certificates of insurance exist at each institution and at the System level. System Risk Management considers the Additional Insured Provision an important condition to be stated on the certificate, especially with regards to our high risk service vendors. The following requirements may be used by the institutions as minimal guidelines and additional guidance may be obtained from System Risk Management as necessary.

    Categories for high risk services require a certificate of insurance be in the contract administrator's possession before the purchase order is issued.

    Standard Limits (Non High Risk Service Vendors)

    Coverage Type Minimum Limit
    A. Worker's Compensation Statutory Limits
    B. Commercial General Liability Each Occurrence $1,000,000
    Gen. Aggr. Incl. Prdts/CO $2,000,000
    C. Automobile Liability Combined Single Limit $1,000,000
    D. Additional Insured Provision:
    The contractor shall add the "Board of Regents of the University of Wisconsin System, its officers, employees, and agents" as an additional insured under the commercial general liability policy.

    In addition to these coverages the contract must contain all of the clauses listed under the Special Terms and Conditions for the UW System.

    Limits For High Risk Service Vendors

    Air Charter

    Coverage Type Minimum Limit
    A. Worker's Compensation REQ'D NO EXCEPTIONS
    B. Commercial General Liability Each Occurrence $1,000,000
     Gen. Aggr. Incl. Prdts/CO    $2,000,000
    C. Aircraft Liability
        Piston $5,000,000
        Jet $25,000,000
    D. Additional Insured Provision:
    The contractor shall add the, "Board of Regents of the University of Wisconsin System, its officers, employees, and agents" as an additional insured under the commercial general and aircraft liability policy.

    In addition to these coverages the contract must contain all of the clauses listed under the Special Terms and Conditions for the UW System.

    Ambulance Service

    Coverage Type Minimum Limit
    A. Worker's Compensation REQ'D NO EXCEPTIONS
    B. Commercial General Liability Each Occurrence $1,000,000
    Gen. Aggr. Incl. Prdts/CO $2,000,000
    C. Automobile Liability Combined Single Limit $2,000,000
    D. Professional Liability Insurance $2,000,000
    E. Additional Insured Provision:
    The contractor shall add the, "Board of Regents of the University of Wisconsin System, its officers, employees, and agents" as an additional insured under the commercial general, automobile, and professional liability policies.

    In addition to these coverages the contract must contain all of the clauses listed under the Special Terms and Conditions for the UW System.

    Asbestos Abatement

    Coverage Type Minimum Limit
    A. Worker's Compensation REQ'D NO EXCEPTIONS
    B. Commercial General Liability Each Occurrence $1,000,000
    Gen. Aggr. Incl. Prdts/CO $2,000,000
    C. Automobile Liability Combined Single Limit $1,000,000
    D. Contractor's Pollution Liability Insurance
    (With one year extended reporting period.)
    Each Occurrence $1,000,000
    Aggregate $2,000,000
    E. Additional Insured Provision:
    The contractor shall add the, "Board of Regents of the University of Wisconsin System, its officers, employees, and agents" as an additional insured under the commercial general and contractor's pollution liability policies.

    In addition to these coverages the contract must contain all of the clauses listed under the Special Terms and Conditions for the UW System.

    Building Remodeling and Construction

    Coverage Type Minimum Limit
    A. Worker's Compensation REQ'D NO EXCEPTIONS
    B. Commercial General Liability Each Occurrence $1,000,000
    Gen. Aggr. Incl. Prdts/CO $2,000,000
    C. Automobile Liability Combined Single Limit $1,000,000
    D. If hazardous substance is involved:
    Contractor's Pollution Liability
    (With one year extended reporting period.)
    Each Occurrence $1,000,000
    Aggregate $2,000,000
    E. Additional Insured Provision:
    The contractor shall add the, "Board of Regents of the University of Wisconsin System, its officers, employees, and agents" as an additional insured under the commercial general, automobile and contractor's pollution liability policies.

    In addition to these coverages the contract must contain all of the clauses listed under the Special Terms and Conditions for the UW System.

    Custodial Services

    Coverage Type Minimum Limit
    A. Worker's Compensation REQ'D NO EXCEPTIONS
    B. Commercial General Liability Each Occurrence $1,000,000
    Gen. Aggr. Incl. Prdts/CO $2,000,000
    C. Automobile Liability Combined Single Limit $1,000,000
    D. Additional Insured Provision:
    The contractor shall add the, "Board of Regents of the University of Wisconsin System, its officers, employees, and agents" as an additional insured under the commercial general liability policy.

    In addition to these coverages the contract must contain all of the clauses listed under the Special Terms and Conditions for the UW System.

    Daycare

    Coverage Type Minimum Limit
    A. Worker's Compensation REQ'D NO EXCEPTIONS
    B. Commercial General Liability Each Occurrence $1,000,000
    Gen. Aggr. Incl. Prdts/CO $2,000,000
    C. Automobile Liability Combined Single Limit $1,000,000
    D. Additional Insured Provision:
    The contractor shall add the, "Board of Regents of the University of Wisconsin System, its officers, employees, and agents" as an additional insured under the commercial general liability policy.
    In addition to these coverages the contract must contain all of the clauses listed under the Special Terms and Conditions for the UW System.

    Elevator Maintenance - This applies to all passenger and freight elevators.

    Coverage Type Minimum Limit
    A. Worker's Compensation REQ'D NO EXCEPTIONS
    B. Commercial General Liability Each Occurrence $1,000,000
    Gen. Aggr. Incl. Prdts/CO $2,000,000
    C. Automobile Liability Combined Single Limit $1,000,000
    D. Additional Insured Provision:
    The contractor shall add the, "Board of Regents of the University of Wisconsin System, its officers, employees, and agents" as an additional insured under the commercial general liability policy.

    In addition to these coverages the contract must contain all of the clauses listed under the Special Terms and Conditions for the UW System.


    Food Service(food supply, vending, manual/catered)

    Coverage Type Minimum Limit
    A. Worker's Compensation REQ'D NO EXCEPTIONS
    B. Commercial General Liability Each Occurrence $1,000,000
    Gen. Aggr. Incl. Prdts/CO $2,000,000
    Fire Legal $100,000
    C. Liquor Liability (When applicable) $1,000,000
    D. Automobile Liability Combined Single Limit $1,000,000
    E. Additional Insured Provision:
    The contractor shall add the, "Board of Regents of the University of Wisconsin System, its officers, employees, and agents" as an additional insured under the commercial general liability policy.

    In addition to these coverages the contract must contain all of the clauses listed under the Special Terms and Conditions for the UW System.

    High Risk Entertainment/Speakers - This applies to a broad range of contracted services including, but not limited to pyrotechnical displays, controversial speakers, and the like.

    Coverage Type Minimum Limit
    A. Worker's Compensation REQ'D NO EXCEPTIONS
    B. Commercial General Liability Each Occurrence $1,000,000
    Gen. Aggr. Incl. Prdts/CO $2,000,000
    C. Automobile Liability Combined Single Limit $1,000,000
    D. Umbrella Liability $1,000,000
    E. Additional Insured Provision:
    The contractor shall add the, "Board of Regents of the University of Wisconsin System, its officers, employees, and agents" as an additional insured under the commercial general liability policy.

    In addition to these coverages the contract must contain all of the clauses listed under the Special Terms and Conditions for the UW System.

    Medical Services (including optical and laboratory) - This applies to all contracted medical services including, but not limited to, assisted physician services, laboratory equipment maintenance and patient testing.

    Coverage Type Minimum Limit
    A. Worker's Compensation REQ'D NO EXCEPTIONS
    B. Commercial General Liability Each Occurrence $1,000,000
    Gen. Aggr. Incl. Prdts/CO $2,000,000
    C. Automobile Liability Combined Single Limit $1,000,000
    D. Professional Liability Insurance (malpractice) $2,000,000
    E. Additional Insured Provision:
    The contractor shall add the, "Board of Regents of the University of Wisconsin System, its officers, employees, and agents" as an additional insured under the commercial general, automobile and professional liability policies.

    In addition to these coverages the contract must contain all of the clauses listed under the Special Terms and Conditions for the UW System.

    Recreational Services - This applies to a broad range of contracted services including, but not limited to golf course management, carnival activities, audience participation activities, third parties hosting camps and clinics at our institutions, and the like.

    Coverage Type Minimum Limit
    A. Worker's Compensation REQ'D NO EXCEPTIONS
    B. Commercial General Liability Each Occurrence $1,000,000
    Gen. Aggr. Incl. Prdts/CO $2,000,000
    C. Automobile Liability Combined Single Limit $1,000,000
    D. Umbrella Liability $1,000,000
    E. Additional Insured Provision:
    The contractor shall add the, "Board of Regents of the University of Wisconsin System, its officers, employees, and agents" as an additional insured under the commercial general liability policy.

    In addition to these coverages the contract must contain all of the clauses listed under the Special Terms and Conditions for the UW System.

    Refuse Transportation and Disposal

    Coverage Type Minimum Limit
    A. Worker's Compensation REQ'D NO EXCEPTIONS
    B. Commercial General Liability Each Occurrence $1,000,000
    Gen. Aggr. Incl. Prdts/CO $2,000,000
    C. Automobile Liability
    Combined Single Limit $1,000,000
    D. Contractor's Pollution Liability (with 1 year extended reporting period)
    Each Occurrence $1,000,000
    Aggregate $2,000,000
    E. Additional Insured Provision:
    The vendor shall add the, "Board of Regents of the University of Wisconsin System, its officers, employees, and agents" as an additional insured under the commercial general and contractor's pollution liability policies.

    In addition to these coverages the contract must contain all of the clauses listed under the Special Terms and Conditions for the UW System.

    Security

    Coverage Type Minimum Limit
    A. Worker's Compensation REQ'D NO EXCEPTIONS
    B. Commercial General Liability Each Occurrence $1,000,000
    Gen. Aggr. Incl. Prdts/CO $2,000,000
    C. Automobile Liability Combined Single Limit $1,000,000
    D. Professional Liability Insurance $1,000,000
    E. Additional Insured Provision:
    The contractor shall add the, "Board of Regents of the University of Wisconsin System, its officers, employees, and agents" as an additional insured under the commercial general liability policy.

    In addition to these coverages the contract must contain all of the clauses listed under the Special Terms and Conditions for the UW System.

    Tower Inspection and Maintenance Services

    Coverage Type Minimum Limit
    A. Worker's Compensation REQ'D NO EXCEPTIONS
    B. Commercial General Liability Each Occurrence $1,000,000
    Gen. Aggr. Incl. Prdts/CO $2,000,000
    C. Automobile Liability Combined Single Limit $1,000,000
    D. Additional Insured Provision:
    The contractor shall add the, "Board of Regents of the University of Wisconsin System, its officers, employees, and agents" as an additional insured under the commercial general liability policy.

    In addition to these coverages the contract must contain all of the clauses listed under the Special Terms and Conditions for the UW System.

  6. Transportation Services - This applies primarily to the transport of people. If air transport see Air Charter.

    Coverage Type Minimum Limit
    A. Worker's Compensation REQ'D NO EXCEPTIONS
    B. Commercial General Liability Each Occurrence $1,000,000
    Gen. Aggr. Incl. Prdts/CO $2,000,000
    C. Automobile Liability Combined Single Limit
    Wisconsin Combined Single Limit $2,000,000
    Interstate Combined Single Limit $5,000,000
    D. Additional Insured Provision:
    The contractor shall add the, "Board of Regents of the University of Wisconsin System, its officers, employees, and agents" as an additional insured under the commercial general and automobile liability policies.

    In addition to these coverages the contract must contain all of the clauses listed under the Special Terms and Conditions for the UW System.

  7. Special Terms and Conditions

    * On notification of award and prior to issuance of a contract, the contractor (vendor) shall provide the University a Certificate of Insurance with the required coverage and limits of insurance issued by an insurance company that has an AM Best Rating of A-, is licensed to do business in the State of Wisconsin, and signed by an authorized agent.

    * The University must verify the following information:

    1. Business in Wisconsin: Ensures that the insurance provider is authorized to do business in the State of Wisconsin by the Wisconsin Office of the Commissioner of Insurance by either

    a. Calling the Commissioner's Bureau of Financial Examination at (608) 267-9456

    b. Using the online Company Lookup module on the Commissioner's web page @ https://ociaccess.oci.wi.gov/CmpInfo/CmpInfo.oci

    2. A.M. Best Rating: Ensures that the insurance provider has an A.M. Best rating of A- or better by either:

    a. Calling the Commissioner's Bureau of Financial Examinations at (608) 267-9456

    b. Using the online Ratings and Analysis module on the A.M. Best web page @ http://www3.ambest.com/ratings/RatingsSearch.asp

    * All policies of insurance shall contain a covenant requiring sixty (60) days written notice by the insurer and sent certified mail to the contract administrator at the specific institution, before cancellation, reduction or other modifications of coverage. The insurance certificate shall be for the initial contract period of one (1) year and shall be renewed by the contractor for each subsequent renewal period of the contract.

    * In the event of non-renewal, cancellation, or expiration, the contractor shall provide the University evidence of the new source(s) of required insurance within twenty-one (21) calendar days after the University's receipt of the sixty (60) day notice. Failure to maintain the required insurance in force may be cause for contract termination.

    * In the event that the contractor fails to maintain and keep in force the insurance herein required, the University shall have the right to cancel and terminate the contract without notice.

    * The contractor agrees to indemnify, defend and hold harmless the Board of Regents of the University of Wisconsin System, its officers, employees and agents from and against any and all claims, losses, liability, costs or expenses (hereinafter collectively referred to as "claims") occurring in connection with or in any way incidental to or arising out of the occupancy, use, service, operations or performance of work in connection with this contract, but only to the extent that such claims are caused by or result from the negligence, misconduct or other fault of the contractor, its agents, employees, subcontractors or contractors.

Appendix 1
Appendix 2

Back to RM Table of Contents

Revised 02/24/10