D.C. Mun. Regs. tit. 27, r. 27-3332

Current through Register Vol. 71, No. 38, September 20, 2024

Rule 27-3332 - INSURANCE AND INDEMNIFICATION COSTS

3332.1

The cost of required or approved insurance that is maintained by the contractor pursuant to the contract shall be allowable.

3332.2

The cost of insurance maintained by the contractor in connection with the general conduct of its business shall be allowable, in accordance with the provisions of this section.

3332.3

The contracting officer shall determine that the types and extent of coverage follow sound business practice and that the rates and premiums are reasonable.

3332.4

Costs allowed for business interruption or other similar insurance shall exclude the cost of coverage for loss of profit.

3332.5

The cost of property insurance premiums for insurance coverage in excess of the acquisition cost of the insured assets shall be allowable only when the contractor has a formal written policy assuring that, in the event the insured property is involuntarily converted, the new asset shall be valued at the book value of the replaced asset, plus or minus adjustments for differences between insurance proceeds and actual replacement cost. If the contractor does not have a formal written policy with this assurance, the cost of premiums for insurance coverage in excess of the acquisition cost of the insured asset shall not be allowable.

3332.6

Costs of insurance for the risk of loss of or damage to District property shall be allowable only to the extent that the contractor is liable for loss or damage to District property, and to the extent that insurance does not cover loss or damage that results from willful misconduct or lack of good faith on the part of the contractor, its directors, officers, or agents.

3332.7

Actual losses shall not be allowable unless expressly provided for in the contract except as follows:

(a) Losses incurred under the nominal deductible provisions of purchased insurance, in keeping with sound business practices, shall be allowable when the contractor did not establish a self-insurance program; and

(b) Minor losses, such as spoilage, breakage, and disappearance of small hand tools, that occur in the ordinary course of doing business and that are not covered by insurance shall be allowable.

3332.8

The cost of insurance to protect the contractor against the costs of correcting its own defects in materials or workmanship shall not be allowable. However, insurance costs to cover fortuitous or casualty losses resulting from defects in materials or workmanship shall be allowable as a normal business expense.

D.C. Mun. Regs. tit. 27, r. 27-3332

Final Rulemaking published at 35 DCR 1666 (February 26, 1988),