Handbook of Business Procedures
June 6, 2011
June 6, 2011
19.1.10. GENERAL CONTRACT INSURANCE REQUIREMENTS
Insurance requirements are present in most business contracts and should be reviewed by the Office of the Vice President and Chief Financial Officer Business Contracts to ensure language is included to protect the interests of The University of Texas at Austin and its staff and faculty. Insurance requirements placed on the university by vendors or other third-parties in contracts should also be reviewed by Business Contracts to be certain requirements are appropriate.
The Office of Accounting Risk Management often works with The Office of the Vice President for Legal Affairs and with The University of Texas System Risk Management to ensure requirements are adequate and cover such items as sovereign immunity; the Texas Tort Claims Act; indemnification; other statutory requirements; and minimum insurance coverage requirements, which are dependent upon the activity. For more information about insurance requirements, contact the university’s Risk Management.
B. Certificate of Insurance
A Certificate of Insurance (COI) is often required by contracts and is issued by an insurance company. The COI verifies insurance coverage(s) granted to listed individuals. It should correspond to the contract’s requirements and include the effective date of the policy, as well as the type and amount of coverage. Note: The COI is not in and of itself an insurance policy and it does not provide any coverage to the certificate holder. Insurance coverage is only in effect after the insurance policy is endorsed by the insurer.
When a third party provides the university with a COI, Office of Accounting Risk Management is available to verify that the COI reflects the appropriate insurance requirements. To request a review, forward a copy of the COI to Risk Management.
When a third party requires the university to provide a COI, please contact Office of Accounting Risk Management.
Other requirements include the following:
- All coverage that the university requires of vendors and other third parties shall be underwritten by companies authorized to do business in the state of Texas and are currently rated A-VII or better by A.M. Best Company.
- Vendors or third parties must provide the university with thirty days’ written notice of insurance cancellation.
- All auto and liability policies shall name UT System, its Board of Regents, and The University of Texas at Austin’s officers, agents, and representatives as additional insureds.