$1,000,000 insurance policy?

[Profits]

I was looking over a State of California vending "Invitation For Bid" doc, and it requests the following:

2)

Certificate of Insurance: Mandatory limits of $1,000,000.00 each on

Commercial General Liability, Commercial Automobile Liability and Workers’

Compensation Insurance if applicable or Exemption/Waiver Statement. Unless

otherwise stated, the bidder shall meet all qualifications and insurance

requirements at the time of the bid opening by submitting evidence of

current insurance(s) certificates. (See Exhibit D for complete details

regarding insurance requirements).

EXHIBIT D

SPECIAL TERMS AND CONDITIONS

Contractor shall supply a Certificate of Insurance, with the appropriate

coverage and limits as required. The Certificate of Insurance shall state a limit

of liability not less than $1,000,000.00 (one million dollars) per occurrence

and $2,000,000.00 (two million dollars) aggregate for bodily injury and

property damage liability combined; plus automobile liability of not less than

$1,000,000.00 (one million dollars) combined single limit; plus $1,000,000.00

(one million) Worker’s Compensation Insurance. The Certificate of Insurance

1) Commercial General Liability: General Aggregate; Products; Personal and

Advertising Injury; each occurrence for a minimum of $1,000,000.00 (one

million dollars) and aggregate for $2,000,000.00 (two million dollars).

2) Automobile Liability must include any-auto, hired-autos, non-owned

autos, and any other auto used in performing services under the

contract for a minimum of $1,000,000 combined single limit.

3) Workers’ Compensation Insurance and Employers’ Liability:

Workers’ Compensation Insurance with Employer’s Liability for a minimum of

$1,000,000.00 (one million dollars), issued by an insurance carrier licensed

to underwrite Workers’ Compensation Insurance in the State of California.

The Certificate of Insurance (i.e., Accord Certificate) that includes record on

the General Liability Insurance Certificate, must also include the following

endorsements, word for word:

1 ) The insurer will not cancel the insured’s coverage without 30 days prior

written notice to the State.

2 ) The State of California, its officers, agents, employees, and servants are

included as additional insured, but only insofar as the operations under

this Contract are concerned.

The Contractor agrees that bodily injury liability insurance herein provided

shall be in effect at all times during the term of this Contract. In the event

said insurance coverage expires at any time, or times, during the term of

this Contract, the Contractor agrees to provide at least 30 days prior to said

insurance expiration date a new Certificate of Insurance evidencing insurance

coverage as provided for herein for not less than the remainder of the term of

the Contract or for a period of not less than one (1) year. New Certificates of

Insurance are subject to approval by the Department of General Services and the

Contractor agrees that no work or services shall be performed prior to receiving

Department of General Services’ approval. In the event the Contractor fails to

keep in effect, at all times, insurance coverage as herein provided, the State

may, in addition to any other remedies it may have, terminate this Contract upon

occurrence of such event.

The Department of Rehabilitation will not provide for, nor compensate, the

Contractor for any insurance premiums or cost for any type or amount of

insurance.

Contractor will submit current insurance documents yearly on the anniversary

date of the contract. Contract may be canceled at Departmental discretion, if all

current insurance forms are not received within 30 days of contract anniversary

date.

   Insurance Companies

Insurance companies issuing any of the policies required by these provisions

shall have a rating classification of “B” or better and a financial size category

rating of “VII” or better according to the latest edition of the A.M. Best Key

Rating Guide. Any other rating classification requires State approval.

All insurance companies issuing any of the policies required by these provisions

shall be licensed to do business in the State of California.

Expiration date of Insurance must not expire prior to receipt of renewal. Should

lapse of insurance occur, a $1,000 Liquidated Damages as defined in Exhibit E

Additional Provisions may apply.

Where does one go to obtain an insurance policy such as this?  And how much does something like this cost?

And I guess another question is why is it needed?  In case a machine burns starts shooting flames and burns a building down?

[agrantha]

Kelly that is a good deal! 

I pay $195/year for general liability.  When I start making above $15,000 per year, my premium will increase.

I use Montgomery Insurance, a subidiary of Wells Fargo.  You can contact Jim.J.Brakken at Jim.J.Brakken@wellsfargo.com

Or call Wells Fargo Insurance, Inc. @

1-866-647-6199

[mizugori]

State farm has vending liability insurance - 327/yr for New York City for a $2,000,000 policy

[Bender]

I'm interested in more referrals for insurance agents or brokers for the state of California.

Regarding this IFB, it makes for a high startup cost.  They want liability insurance, commercial auto insurance, and worker's compensation insurance.  I didn't read the IFB, but it seems like you'll have to pay the premiums to get all those just to submit the bid.  Let's say it's $1,000 for the first year's premiums.  Add to that the cost of equipment, delivery and inventory.

Looks like an opportunity for an existing full-line vending company who already has these in place.

Department of Rehabilitation?  Would this be prison bending machines for inmates, or for employees?

[amc-vending]

My policy runs 225 a year with State Farm here in Phoenix, but I opted out of the mechanicial breakdown rider.

[Profits]

I'm interested in more referrals for insurance agents or brokers for the state of California.

Regarding this IFB, it makes for a high startup cost.  They want liability insurance, commercial auto insurance, and worker's compensation insurance.  I didn't read the IFB, but it seems like you'll have to pay the premiums to get all those just to submit the bid.  Let's say it's $1,000 for the first year's premiums.  Add to that the cost of equipment, delivery and inventory.

Looks like an opportunity for an existing full-line vending company who already has these in place.

Department of Rehabilitation?  Would this be prison bending machines for inmates, or for employees?

Thanks for the information guys!  Very helpful.

This particular contract requires 38 full line machines.  I suppose you'd have to be fairly well established to afford the $100k+ cash outlay for the machines alone.

Cool thing is all the buildings are very close together.