5.4.4 Insurance Requirements - Vendors, Service Providers, Contractors, Consultants, and Outside Users of Facilities

General Policy

The University can be exposed to risk when using contractors, consultants, service providers, and/or vendors to provide goods or services or when outside organizations and individuals use University premises and/or facilities. University policy requires that contractors, consultants, service providers, and/or vendors doing business with the University, as well as outside organizations and individuals using University premises and/or facilities, maintain liability insurance and other insurance as necessary to reasonably protect the University's financial interests, and in amounts deemed adequate by the University.

In order to protect the University's interests, and other parties as necessary, the University must receive a Certificate of Insurance prior to the commencement of any work and/or scheduled event.

Certificates of Insurance

Certificates of Insurance are issued to the University by:

1. Insurance carriers and/or self-insurance plan administrators underwriting risks of:

• Independent contractors performing construction or other services to the University;
• Businesses providing services to the University;
• Vendors providing any type of work, activity or product, and
• Miscellaneous other activities as agreed upon in any other contract or Memorandum of Understanding entered into by the University; and
• Insurance carriers and/or self-insurance plan administrators underwriting risks of outside organizations and individuals using University premises and/or facilities.

2. Insurance carriers and/or self-insurance plan administrators underwriting risks of outside organizations and individuals using University premises and/or facilities.

Large companies that have self-insurance liability programs may not be able to provide a Certificate of Insurance. In this case, a liability coverage statement signed by an authorized corporate officer assuming liability is acceptable if the company has the necessary financial resources to guarantee payment when the law imposes such liability. When evaluating the acceptability of a self-insurance program, the University may request a recent audited financial statement and description of how the Self-Insurance Program is funded.

Indemnification

Contractors, (including subcontractors), consultants, service providers and/or vendors who provide goods or services to the University, as well as outside organizations and individuals who use University premises and/or facilities, (hereafter referred collectively to as "Providers/Users") shall indemnify the University against all loss, damage, and expense which it may sustain or for which it will become liable on account of injury to or death of persons, or on account of damage to or destruction of property resulting from the performance of work, the provision of goods or services, and/or the use of University premises and/or facilities, or due to or arising in any manner from Providers'/Users' wrongful acts or negligence, or of any employee of any of them.

University guidelines state the following parties will defend and hold the University harmless from any loss, injury, or damage occurring during the performance of any work or activity and to indemnify The Board of Trustees of Illinois State University for any loss sustained as a result of negligence:

• Independent contractors or consultants (including their employees, agents or sub-contractors) performing work under contracts, service agreements, and/or Memorandums of Understanding;
• Outside organizations and individuals (including their employees, agents or sub-contractors) using the University's premises and/or facilities; and

Businesses (including their employees, agents, and sub-contractors) providing services as outlined above.

University Minimum Insurance Requirements

All parties who are required to show evidence of satisfactory insurance coverage must furnish the University a Certificate or Certificates of Insurance indicating compliance with all requirements. These Certificates must:

• Provide for thirty days (30) advance written notice to the University of any modification, change, or cancellation of any of the insurance coverages.
• List "The Board of Trustees of Illinois State University" as an additional insured on the insured parties' commercial general liability policy. This provision must state that it shall apply in proportion to, and to the extent of the negligent acts or omissions of the non-University party or any person or persons under the non-University parties' direct supervision and control.
• The insurance companies providing coverage must have a B+:VI or better rating as indicated by the A.M. Best Ratings and Analysis website at the time of submission, and the contractor, consultant, vendor, affiliate, or service provider must agree to maintain such insurance for the duration of the project or the term for which services will be rendered.

Following are the required coverages:

• Subcontractors must comply with the same insurance coverage requirements as Contractors.
• Subcontractors must submit the required Certificate of Insurance through the primary Contractor.
• When any professional services are performed in connection with an agreements, Professional Liability for the Contractor and its employees and agents (if appropriate) must be maintained to include coverage for errors, omissions, and negligent acts related to the rendering of such professional services with limits not less than $1,000,000 per claim and $3,000,000 in the aggregate. Coverage extensions must include contractual liability. When policies are renewed or replaced, any retroactive date must coincide with, or precede commencement of services by Contractor or sub-contractor under this Contract. A claims-made policy that is replaced or not renewed must have an extended reporting period not less than two (2) years.

Note: Units should forward the "University Minimum Insurance Requirements" to the Providers/Users who are providing services or using University facilities and premises. The Providers/Users, in turn, should forward it to their insurance agent or broker for compliance with the requirements set forth.

Contract Approval Requirements

It is imperative that all ISU contracts contain language to adequately protect university resources. All contracts for services provided to ISU entities are to be reviewed and approved by ISU General Counsel. Further all contracts are to be signed only by those with delegated contract signature authority (formally delegated by the University President).

Exceptions to Insurance Limits

Exceptions to the insurance limit requirements outlined may be developed by University Risk Management, in conjunction with affected Administrators, following a process of risk identification and evaluation. In such situations, it may be determined that little or no risk is involved, in which case the limits may be lowered or the requirement eliminated. Conversely, it may be determined that additional risk is involved, in which case the limits may be raised.