MST Attachment B - Insurance and Risk of Loss.pdf

Mainframe Services

MST Attachment B

Insurance and Risk of Loss

RFP 3525R03

MST Attachment B: Insurance and Risk of Loss Page 2 of 5

1 INSURANCE

(a) Service Provider Insurance Requirements. During the Contract Term, Service Provider shall maintain at its own expense, insurance of the type and in the amounts specified below and issued by companies authorized to conduct such business under the laws of Pennsylvania:

(i) Statutory workers' compensation in accordance with all applicable Federal, state and local requirements, and employer liability in an amount not less than $2,000,000 per occurrence;

(ii) Commercial general liability (including coverage for Contractual Liability assumed by Service Provider under this Agreement, Premises-Operations, Completed Operations-Products and Independent Service Providers and, to the extent commercially reasonable, coverage for explosion, collapse, and underground property damage hazards) in an amount not less than $5,000,000 per occurrence;

(iii) Commercial business automobile liability covering all vehicles that Service Provider owns, hires, or leases in an amount not less than $1,000,000 per occurrence (combined single limit for bodily injury and property damages).

(iv) Professional liability/errors & omissions and Cyber Risk Insurance (including coverage for Technology Professional Liability and ransom payments) covering acts, errors and omissions arising out of Service Provider’s operations or Services in an amount not less than $35,000,000 per occurrence and policy aggregate.

(v) Comprehensive crime insurance including Employee Dishonesty Insurance and Computer Fraud Insurance, covering the loss of money, securities, and other property belonging to PennDOT resulting from any fraudulent or dishonest acts committed by Service Provider employees, acting alone or with others, in an amount of not less than $5,000,000 per occurrence.

(vi) Umbrella/excess in an aggregate amount of not less than $30,000,000.

(vii) All-risk property insurance covering loss or damage to Service Provider owned or leased Equipment and other tangible assets used to provide the Services in an amount not less than the full replacement cost of such Equipment and assets.

(b) Insurance Requirements for Subcontractors. During the Contract Term, Service Provider shall require each of its approved Subcontractors and any other Subcontractors performing any Services on-site at any of the Service Provider Services Locations, to maintain at their own expense or Service Provider's expense, insurance of the type and in the amounts specified below:

MST Attachment B: Insurance and Risk of Loss Page 3 of 5

(i) Statutory workers' compensation in accordance with all applicable Federal, state and local requirements, and employer liability in an amount not less than $2,000,000 per occurrence;

(ii) Commercial general liability (including coverage for Contractual Liability assumed by Service Provider under this Agreement, Premises-Operations, Completed Operations-Products and Independent Service Providers and, to the extent commercially reasonable, coverage for explosion, collapse, and underground property damage hazards) in an amount not less than $5,000,000 per occurrence;

(iii) Commercial business automobile liability covering all vehicles that Service Provider owns, hires, or leases in an amount not less than $1,000,000 per occurrence (combined single limit for bodily injury and property damages).

(iv) Personal property insurance, on a replacement basis, covering all of Service Provider's and Service Provider's SubService Providers' personal property located at any Service Provider Services Location.

(v) Professional liability/errors & omissions and Cyber Risk Insurance (including coverage for Technology Professional Liability and ransom payments) covering acts, errors and omissions arising out of Service Provider’s operations or Services in an amount not less than $15,000,000 per occurrence and policy aggregate.

(vi) Comprehensive crime insurance including Employee Dishonesty Insurance and Computer Fraud Insurance, covering the loss of money, securities, and other property belonging to PennDOT resulting from any fraudulent or dishonest acts committed by Service Provider employees, acting alone or with others, in an amount of not less than $5,000,000 per occurrence.

(vii) All-risk property insurance covering loss or damage to Service Provider owned or leased Equipment and other tangible assets used to provide the Services in an amount not less than the full replacement cost of such Equipment and assets.

(c) Prior to the expiration of any then effective insurance policy, Service Provider shall furnish to Commonwealth certificates of insurance or other appropriate documentation (including evidence of renewal of insurance) evidencing all coverage referenced in this Section, as applicable, and naming Commonwealth as an additional insured to the extent of Service Provider's indemnities contained in this Contract. The policy required under Section (a)(ii) shall have no cross-suits exclusion, or any similar exclusion that excludes coverage for claims brought by one insured under the policy against another insured under the policy. Service Provider shall have included in all policies of insurance required hereunder a waiver by the insurer of all right of subrogation against Commonwealth in connection with any loss or damage thereby

MST Attachment B: Insurance and Risk of Loss Page 4 of 5 insured against. Such certificates or other documentation will include a provision whereby thirty (30) days' notice must be received by Commonwealth prior to coverage cancellation or alteration of the coverage by either Service Provider or its Subcontractors or the applicable insurer. Such cancellation or alteration shall not relieve Service Provider of its continuing obligation to maintain insurance coverage in accordance with this Section . Should any policy expire or be canceled during the Term and should Service Provider thereafter fail to immediately procure replacement insurance as specified, PennDOT may at its option procure such insurance and to deduct the cost thereof from any sums due Service Provider under this Contract.

(d) For purposes hereof, Service Provider and its Subcontractors may maintain “umbrella” insurance policies to fulfill the foregoing insurance requirements, as appropriate.

(e) Approved Companies. All such insurance shall be procured with reputable insurance companies and in such form as is usual and customary to Service Provider’s business.

Such insurance companies shall maintain a rating at least “A-” and be at least a Financial Size Category VIII as both criteria are defined in the most current publication of Best’s Policyholder Guide or comparable rating agency equivalent where applicable.

(f) All insurance required under this Section shall be primary insurance and any other valid insurance existing for the Commonwealth’s benefit shall be noncontributory with respect to the scope of this Agreement and Service Provider’s liability.

(g) Minimum Amounts, Self-Insurance. These insurance provisions set forth the minimum amounts and scopes of coverage to be maintained by Service Provider and are not to be construed in any way as a limitation on Service Provider’s liability under this Agreement. Any and all deductibles in the above-referenced insurance policies shall be assumed by, for the account of, and at the sole risk of the Service Provider.

(h) Certificates. Service Provider shall provide PennDOT with certificates of insurance evidencing compliance (including evidence of renewal of insurance) signed by authorized representatives of the respective carriers for each year that this Agreement is in effect.

(i) No Implied Limitation. The obligation of Service Provider to provide the insurance specified herein shall not limit or expand in any way any obligation or liability of Service Provider provided elsewhere in this Agreement. The rights of PennDOT to insurance coverage under policies issued to or for the benefit of it are independent of this Agreement and shall not be limited by this Agreement.

(j) Waiver of Subrogation. With respect to insurance coverage to be provided by Service Provider pursuant to Sections (a) (ii) and (iii) herein, the insurance policies shall provide that the insurance companies waive all rights of subrogation against PennDOT, and its Affiliates, officers, directors and employees. Service Provider waives its rights to recover against PennDOT and its respective officers, directors, employees, agents, successors and assigns in subrogation or as subrogee for another

MST Attachment B: Insurance and Risk of Loss Page 5 of 5 party and shall, to the extent available on a commercially reasonable basis, similarly arrange for such waiver with respect to the coverage provided by Service Provider pursuant to Section (a)(i). Notwithstanding the foregoing, Service Provider acknowledges and agrees that the enforceability of any such waivers is effective to the extent authorized by applicable Laws.