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Business and Financial Policies and Procedures

6.1.1 Determine Minimum Insurance Requirements for Vendors

Policy Statement

Units that contract with vendors must be certain those vendors meet the University of Illinois System's insurance requirements where possible and financially feasible. Vendors, including contractors, consultants, affiliates, or service providers must show evidence of satisfactory insurance coverage and, when indicated, must furnish the System certificates of insurance.

Procedure

Determine which Tier level the contract falls into according to the matrix below. Utilize the corresponding insurance requirement attached at the bottom of the matrix.

Tier 1 - High Risk Tier 2 - Medium Risk Tier 3 - Low Risk

Mutually Executed Contract with Procurement of Services Template Article 6 Insurance Language for Tier 1 Required;

Prior to Contract Execution:
1) obtain actual Certificate of Insurance; and
2) “Additional Insured” language for Tier 1 must appear on Certificate of Insurance for General Liability coverage

Mutually Executed Contract with Procurement of Services Template Article 6 Insurance Language for Tier 2 Required
Insurance language in the Purchase Order Terms & Conditions and/or Contract for Services Under $10,000 is sufficient
  • Construction contracts including the new construction, alteration, renovation, or maintenance of existing UI buildings or structures; alteration, renovation or maintenance of highways, roads, bridges, water lines, sewer lines, oil lines, and/or gas lines
  • Services where Contractor brings equipment requiring cranes, rigging, scaffolding, and/or erection equipment on UI premises

NOTE: With regard to these activities, the Certificate must show a project name, building number, and/or Purchase/Contract Number.)

  • Accounting services, must also have Professional/Errors & Omissions liability coverage.
  • Financial Services, such as investment banking, treasury, or insurance services, must also have Professional/Errors & Omissions liability coverage;
  • Legal services, must also have Professional/Errors & Omissions liability coverage.
  • Consulting services, must also have Professional/Errors & Omissions liability coverage.
  • Services provided by licensed medical/ dental/ clinical psychology/veterinarian professional(s) & ambulance services, must also have Professional Liability – Medical Malpractice coverage.
  • Custom Produced Art: including but not limited to art preservation or restoration (Consult with RISK)
  • Services, using the Contract for Services Under $10,000
  • Hauling of Hazardous Materials/Waste including chemical, gas, or liquids
  • Travel Agencies for Group Travel – must also have Professional/Errors & Omissions liability coverage.
  • Inter-agency agreements or other agreements between state agencies, state universities, and/or political subdivisions; municipalities; school districts; and park districts
  • Aviation-related activities, including air charters (Contact Risk Management)
  • Golf course manager, if applicable
  • Broadcasting Services – must also have Professional Liability/Errors & Omissions liability coverage.
  • “Brand name” companies with a national and/or regional name/presence (except if the services fall under Column I.) See Supplement – Fortune 500 list)
  • Catering services, must also have Liquor Liability coverage in the amount of $1,000,000 if liquor is being sold, served or furnished.
  • Concessionaires, must also have Liquor Liability coverage in the amount of $1,000,000 if liquor is being sold, served or furnished.
  • Bartending services – must have Liquor Liability coverage in the amount of $1,000,000.
  • Janitorial services performed on UI premises
  • Vehicle Charters:(Language is embedded into Article 6 language)
    Bus (25+ passengers) -- $10,000,000
    Mini-bus (16-25 passengers) -- $7,000,000
    Shuttle bus or van (14 passengers + driver) -- $5,000,000
    Van (8 passengers) -- $2,000,000
    Sedan -- $1,000,000
  • Mass Transit Services (Consult with RISK)
  • Purchases where services require access to the System’s information technology infrastructure (Consult with Risk)
  • Services which involve the sharing of sensitive data with outside entities (including data subject to HIPAA, FERPA, etc. (Consult with RISK)
  • Facilities for storing System property; must also have Bailee liability coverage
  • Material Transfer Agreements



  • Products that can be considered hazardous, dangerous or high risk of causing bodily injury or damage to property. This could include pacemakers, surgical robots, explosive chemicals, biologicals, lasers, etc. Contact Risk Management to confirm if your purchase falls within this category.


 NOTE: Regardless of whether the company is a “brand name,” Column I requirements shall be followed for the categories shown in Column I.    
 USE ARTICLE 6: TIER 1 HIGH RISK insurance requirements USE ARTICLE 6: TIER 2 MEDIUM RISK insurance requirements USE ARTICLE 6: TIER 3 LOW RISK insurance requirements

* A "caterer"” is a non-System entity (outside vendor) that serves food, beverages, and/or liquor at an event primarily attended by or open to the general public. Typically the vendor would provide set-up (including the use of caterer-provided equipment, food service/onsite preparation and clean-up. An example of a “non-caterer”, and not subject to this requirement, would be a vendor that did food and/or beverage drop-off, such as a food delivery person.
*A “concessionaire” is an entity that provides large scale food preparation and delivery, such as Sodexo or Aramark.

If you have any questions, consult University Risk Management.

Exceptions to Minimum Insurance Requirements

The Office of Risk Management may develop exceptions to these insurance limit requirements, in conjunction with System and university administrators, following a process of risk identification and evaluation. If they determine that little or no risk is involved, the limits may be lowered or the requirement removed. Conversely, if it is determined that additional risk is involved, the limits may be raised.

Related Policies and Procedures

17.1 Consultants and other Contractors for Professional and Artistic Services

Additional Resources

What to do if Approved Charter Vendors Are More Than Fifty Miles Away
A.M. Best Ratings and Analysis

Risk Management Insurance Matrix Supplement

Last Updated: August 15, 2017 | Approved: Senior Associate Vice President for Business and Finance | Effective: November 2010

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