The State Risk Management and Insurance Administration program (Risk Management) provides both liability and physical damage coverage (comprehensive/collision and fire/theft) for State owned and leased vehicles.
Physical damage coverage is an optional, separately billed coverage that agencies can purchase to cover damage to their vehicles. Claim payments will not exceed the actual cash value (ACV) of the covered vehicle regardless of contractual amounts owed on a lease agreement. The ACV is obtained by averaging the blue book value and market sales on comparable vehicles.
If a vehicle is stolen or damaged and declared not repairable, the amount that Risk Management will cover will not exceed the ACV. If the ACV is less than the loan or the lease agreement, the agency will be responsible for the balance. 1(back to top)
This memo updates Comptrollerís Memorandum 2007-24, issued October 23, 2007, covering general liability and automobile insurance requirements for contracts. This Comptroller Memorandum 2009-04 is to advise departments of the following:
- Standardizing the insurance requirements for Requests for Proposals (RFPs) and Invitations for Bids (IFBs) ensures consistency among State contracts and provides liability protection for the State. To achieve this standardization, Comptrollerís Memorandum 2007-24 requires that the contractual requirements for general liability (GL) be no less than $1 million per occurrence and $2 million in the aggregate (the maximum amount paid for claims during a policy term). Comptrollerís Memorandum 2007-24 also requires that automobile (auto) insurance be no less than $1 million per accident.
- Departments should review the potential risk exposure and require higher insurance limits if warranted by specific contracts.
- Individual agencies may establish below the minimum standard requirements, if deemed appropriate for particular contracts, subject to approval by the Risk Management staff before an RFP or IFB is issued. If Risk Management approval is not obtained, the department or agency will be financially responsible for the difference between the contractual insurance requirements established by the department or agency and the amount set forth in Comptrollerís Memorandum 2007-24.2
1 Comptrollerís Memorandum 2009-03, dated January 20, 2009
2 Comptrollerís Memorandum 2009-04, dated April 6, 2009