FAR 52.228: The Insurance Clauses Your Broker Should Know by Heart

The Federal Acquisition Regulation is not light reading. It's 53 parts, thousands of clauses, and an endless maze of cross-references. But buried in Part 28 — "Bonds and Insurance" — and Part 52.228 is a set of clauses that directly govern what insurance a government contractor must carry, how it must be structured, and what happens when it isn't.

If your broker can't walk you through these clauses without looking them up, they're not a government contractor specialist. They're a generalist guessing at federal requirements. And guessing is how certificates get rejected, contracts get delayed, and compliance becomes a recurring crisis instead of a baseline condition.

Here are the clauses that matter most — and what each one actually requires.

FAR 52.228-3: Workers' Compensation Insurance (Defense Base Act)

This clause requires contractors performing work outside the United States to carry workers' compensation insurance under the Defense Base Act (DBA). The DBA extends the Longshore and Harbor Workers' Compensation Act to cover employees working on military bases, public works contracts, and federally funded projects overseas.

The critical detail: DBA coverage is not standard workers' compensation. It's a federal program with its own benefit structure, reporting requirements (Form LS-202 within 10 days of injury), and dispute resolution through the Department of Labor's Office of Workers' Compensation Programs. Many domestic workers' comp carriers either don't offer DBA coverage or offer it as a poorly understood endorsement. If your contractor performs any work at overseas installations — including temporary assignments — this clause applies, and your policy must specifically provide DBA coverage.

FAR 52.228-5: Insurance — Work on a Government Installation

This is the foundational insurance clause for contractors performing work on government property. It establishes minimum coverage requirements that the contracting officer can adjust upward based on the nature of the work.

The baseline minimums under FAR 52.228-5:

Workers' compensation: As required by applicable federal and state workers' compensation and occupational disease statutes. For work subject to the Longshore and Harbor Workers' Compensation Act, coverage must meet that Act's requirements.

Employer's liability: $100,000 minimum, unless the state of performance has a higher requirement.

Bodily injury liability: $500,000 per occurrence.

Property damage liability: $500,000 per occurrence — covering both contractor operations and completed operations.

Automobile liability: $200,000 per person / $500,000 per occurrence for bodily injury, $20,000 per occurrence for property damage.

These are minimums. Contracting officers routinely require higher limits — $1 million or $2 million per occurrence for GL, $1 million combined single limit for auto — and the solicitation or contract will specify any increased requirements. The mistake brokers make is treating these as the actual requirements rather than the floor.

FAR 52.228-7: Insurance — Liability to Third Persons

This clause applies primarily to cost-reimbursement contracts and requires the contractor to maintain insurance coverage for liabilities to third persons arising out of contract performance. It's broader than 52.228-5 in scope because it addresses the reimbursability of insurance costs under cost-type contracts.

The clause requires: general liability insurance, automobile liability, and aircraft public and passenger liability (where applicable). But the real significance is in the cost allowability provisions. Under cost-reimbursement contracts, insurance premiums that comply with FAR 31.205-19 are allowable costs — meaning the government reimburses the contractor for insurance that meets these requirements. This creates both an obligation and an opportunity: the contractor must carry adequate coverage, but the cost of that coverage is a reimbursable contract expense.

The catch is FAR 31.205-19's limitations. Self-insurance is allowable only if it's more economical than purchased coverage. Insurance against defects in the contractor's own work is not allowable. And rates must be "reasonable" — which gives the contracting officer latitude to challenge premiums that appear inflated.

FAR 52.228-8: Liability and Insurance — Leased Motor Vehicles

A narrow but frequently triggered clause. When contractors lease motor vehicles for use in government contract performance, this clause requires specific insurance provisions: the contractor must maintain adequate liability insurance, include a waiver of subrogation against the government, provide 30-day cancellation notice, and accept liability for negligence-caused damage to the leased vehicle.

The detail that trips up most brokers: the waiver of subrogation must specifically name the United States Government. A generic waiver of subrogation endorsement naming the "certificate holder" is often insufficient. The endorsement must be explicit.

The Endorsement Requirements That Kill Certificates

Beyond the specific FAR clauses, government contracts typically require a set of policy endorsements that most commercial insurance programs don't include by default. These endorsements are where the 45% certificate rejection rate originates.

Additional Insured — United States of America. The government must be named as an additional insured on the contractor's general liability and auto liability policies. This isn't a simple certificate notation — it requires an actual policy endorsement (CG 20 10, CG 20 37, or equivalent). Many carriers use restrictive additional insured forms that limit coverage to "ongoing operations" but exclude "completed operations." For government contracts, both must be covered.

Waiver of Subrogation. The contractor's insurer must waive its right to subrogate against the government and any other additional insureds. This requires endorsements on CGL (CG 24 04), workers' compensation (WC 00 03 13), and auto liability. Without waiver of subrogation on workers' compensation — which is a separate endorsement from the additional insured — the carrier retains the right to pursue the government for recovery of claim payments. Contracting officers know this and will reject certificates that don't include it.

Primary and Non-contributory. The contractor's coverage must be primary to — and not seek contribution from — any insurance the government may maintain. This endorsement (CG 20 01 or policy language) ensures the contractor's insurance responds first. Without it, the contractor's carrier may argue that the government's own liability coverage should share in the loss, creating a dispute that delays claims resolution.

Cancellation Notice. A minimum 30 days' written notice to the contracting officer before any cancellation or material change in coverage. Standard ACORD certificates now include only a "best efforts" cancellation notice — which is legally meaningless. The endorsement must be added to the policy itself, not just noted on the certificate.

DFARS Supplements: Defense Contractors Face Additional Requirements

Contractors working under Department of Defense contracts face additional requirements under the Defense Federal Acquisition Regulation Supplement (DFARS). DFARS 252.228 series clauses add requirements for aircraft liability insurance, war-hazard protection, and nuclear incident indemnification specific to DoD operations.

For contractors at DOE facilities performing defense-related work — which includes most Oak Ridge operations — both FAR and DFARS requirements may apply simultaneously. The insurance program must satisfy both sets of requirements, and the certificate must demonstrate compliance with each applicable clause.

Cost Allowability: FAR 31.205-19

For cost-reimbursement contractors, insurance costs are allowable under FAR 31.205-19 if the coverage is required by the contract, required by law, or necessary for the contractor's operations. Premiums must be at rates not exceeding those generally available to the contractor. Self-insurance programs are allowable but must be approved by the contracting officer and must be more economical than purchased insurance.

The practical implication: DOE contractors on cost-plus contracts should carry the right insurance — not the cheapest insurance. The cost is reimbursable, and the protection is real. Cutting corners on insurance to reduce reimbursable costs is a false economy that saves the government pennies and exposes the contractor to dollars in uninsured liability.

The PFTN Approach

At PFTN, we don't submit certificates and hope they pass. We read the contract first — every FAR clause, every DFARS supplement, every special provision in the solicitation. We match each insurance requirement to a specific policy endorsement. We verify endorsement language before binding. And we build the certificate as a compliance document, not an afterthought.

The FAR insurance clauses aren't complicated. They're specific. And specificity is something most brokers avoid because it requires actually understanding the regulatory framework. We don't avoid it. We live in it.