The goal of Marymount University is to establish contract guidelines for insurance coverage that can be consistently applied with few exceptions. This can occur if Marymount University decides on the limits that it will require and sticks to that decision. This may involve withstanding pressure from contractors, architect and engineering (A/E) firms, and brokers. As an example, many of the large A/E firms attempt to eliminate all errors and omissions (E&O) requirements in their contracts, even though the firm carries professional liability coverage.
To ensure the continued success of Marymount University contract review program, once insurance requirements have been set, they must be communicated in all bid proposals prior to awarding the contract. The program will not be successful if the insurance is negotiated after the contractor has been selected.
These guidelines were created to assist staff who review, approve, or manage contracts. They are guidelines only. The purpose of this document is to provide examples of specific coverages, terms, and conditions you may want to consider when asked to comment on insurance requirements in your institution’s contracts. The documents and contract language specified here are intended to be template guidelines as examples of best practices. Each one should be adjusted to fit your specific institution’s risk profile. A legal opinion should be sought before making any changes to existing contract language.
General Insurance Requirements for all Insurers:
These general requirements should be incorporated into every contract and should not to be waived without consulting with the risk management department.
Marymount University requires that all insurers:
- Be licensed or approved to do business within the state of Virginia.
- Write required insurance on an “occurrence” basis (professional liability and pollution liability are acceptable written on a “claims-made” basis).
- Marymount University and its [Board of Regents/Trustees], officers, employees, agents, and volunteers as “Additional Insureds” on general liability and other policies as specified by the contract. Please refer to the Contract Language section of this white paper for acceptable wording for this requirement.
- Possess a minimum A.M. Best’s Insurance Guide rating of A VII. A.M. Best rating is composed of two parts: the letter denotes the company’s financial strength level (see Figure 1), and the Roman numeral denotes financial size. Please visit http://www3.ambest.com/ratings/default.asp for further explanation and to look up insurance company ratings.
Please contact the Department of Risk Management for further assistance.