Defense, DoD & SBIR Contracts

What the clauses require

FAR 52.228-5 (Jan 1997) applies to work on a government installation. The contractor provides and maintains the insurance the contract specifies, at its own expense, for the whole performance period; notifies the contracting officer in writing that it is in place before starting work; carries an endorsement that cancellation or material change is not effective until the longer of the state's required period or thirty days after written notice to the contracting officer; and flows the clause down to subcontractors working on the installation, keeping their proof on file.

FAR 52.228-7 (Mar 1996) appears in cost-reimbursement contracts. The contractor provides and maintains workers' compensation, employer's liability, comprehensive general liability for bodily injury, comprehensive automobile liability for bodily injury and property damage, and whatever else the contracting officer requires, with self-insurance permitted where the contractor qualifies. The clause also sets out when the government reimburses liabilities to third persons that insurance does not cover, and when it does not, including for failure to maintain the required insurance.

FAR 28.307-2 sets the minimum amounts the government uses when it requires coverage, listed in the table below. They are floors. A prime or a contract schedule usually asks for more.

Two more sit at the edges. Under DFARS 252.228-7001 (Mar 2023), Ground and Flight Risk, the government self-insures covered aircraft during performance, with exceptions for willful misconduct by management, unapproved flights or crew, and incorrectly performed tasks, and the contractor bears a capped share of each loss. That changes what hull coverage an aircraft or drone contractor buys. The Defense Base Act (42 U.S.C. 1651 et seq.) provides workers' compensation for civilian employees working outside the United States on military bases or under a public-works or national-defense contract.

What it costs

We don't publish a number. Premiums come back from the carriers' underwriters for your operation, and any figure we printed here would be a guess dressed as a fact.

A defense contract rarely changes the premium by itself. It changes the limits a prime asks for, the endorsements the certificate has to reference, and which carriers will write a company whose product is controlled for export. Those three things move the price, and the submission has to state them plainly.

What to watch for in the wording

Read every liability form for a government-use exclusion, which removes claims arising from products or services supplied to a government, and for an export-control exclusion, which removes claims connected to controlled technical data or hardware. Either one, on a generic form, takes the defense customer out of the policy without anyone noticing at purchase.

Read the certificate's requirements against the policies before issuing it. A prime's exhibit asks for additional-insured status, a waiver of subrogation and primary and non-contributory wording, and each of those is an endorsement that has to be on the policy itself. A phrase on the certificate does not add it. A contracting officer under 52.228-5 needs the thirty-day cancellation endorsement, which is not standard on every form.

Read the cyber form against the contract's data-handling clauses. Controlled unclassified information brings its own compliance regime, and a cyber policy's exclusions for regulatory fines and for failure to maintain security controls need to be read against what the contract requires you to maintain.

How to buy it

Send us the award's clause list or the prime's insurance exhibit along with what you build. The application builds the commercial submission, and a licensed broker reads the contract's clauses against it, places what is missing with carriers whose forms do not exclude a government customer, and produces the certificate in the wording the contracting officer or the prime asked for.

Quotes come back with the forms. We read them for the exclusions above, show you where each policy responds, and keep the certificate current as options are exercised and phases change.