The Business Corner: Obtaining insurance to handle government contracts

There are opportunities for minority and women business owners to provide goods and services to the City of Philadelphia, the Philadelphia School District, and the State of Pennsylvania.

But there’s one catch. Even if you win a request for proposal, you need the right types of insurance, at the appropriate levels required under the contract.

Without it, there is no way to close the deal and execute the contract.

In this article we’re going to discuss the types of insurance required to sign off on a contract from the City of Philadelphia for professional services.

The following information is from the General Provision for General Consultant Services, for professional services contracts. Companies that provide consulting, or public relations services such as my firm, are required to obtain and maintain these insurances to work with the City of Philadelphia.

 

Workers Compensation and Employer’s Liability

Both types of insurance cover injury to employees while working. The City requires $100,000 per accident, with a $500,000 policy limit.

General Liability

This covers property damage, medical expense, and other injury claims at your company. The City requires $1,000,000 in coverage for injury and property damage, as well as coverage for advertising injury, products and completed operations. It also requires $2,000,000 as the general aggregate coverage.

Automobile Liability

The City requires $1,000,000 in coverage for cars owned by the company, as well as rented and hired vehicles used by company staff while performing services.

Professional Liability

This coverage is also known as errors and omission insurance (E&O) and helps protect companies from lawsuits claiming they made a mistake while providing professional services.

The City requires $1,000,000 per occurrence of coverage with a deductible not to exceed $50,000.

 

I would strongly encourage any entrepreneur looking to do business for the first time with government agencies, such as the City of Philadelphia to pay close attention to the insurance requirements for any contract opportunity.

This will help you budget accordingly when considering what potential projects to take on. In addition, it will ensure that a last-minute cost of between $5,000-10,000 doesn’t come up at the last minute and prevent you from obtaining a contract.

It would be good to work with a business insurance broker to find reasonable rates and ensure you can get everything done in a timely fashion, as most business owners do.

I hope this helps as you seek out more business on your path to success.

Teresa M. Lundy is the Principal and Founder of TML Communications, a strategic public relations, crisis communications and community engagement firm serving corporations, nonprofit organizations, and government agencies. Follow Teresa on Twitter @TeresaMLundy