Risk Assessment Guidelines Procedures

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					                             Risk Assessment Guidelines & Procedures


Risk Assessment: An evaluation that provides advance planning for losses so that when they
do occur, adequate resources are available. While most losses relate to contracts involving
damage to property or injury to persons, they can also include legal issues, such as breach of
contract and failure to perform.


Purpose: Review specifications to determine potential loss to the City. Measures include
identifying incidents (events that disrupt normal activities and may become a loss or claim) and
assessing the frequency (number of times an incident occurs) and the severity (dollar impact of
a loss) to determine whether to retain or transfer the risk.


Retention: Absorb cost of a loss internally


Transfer: Require insurance from a third party (contractor)


Identify Exposure:
         What are we purchasing? Goods, Services, Construction including alteration, renovation
          or repair
         What activities are involved in order to complete the procurement? Delivery, Installation,
          Assembly, Renovation, Non-Professional services (equipment maintenance, janitorial,
          herbicide/pesticide application, ground/lawn maintenance, window washing, etc.),
          Professional services (architect, engineer, consultant, accountant, medical, translation,
          auditor, attorney, environmental testing, land survey, etc.)
         What injuries could result? To city employees, citizens, contractors employees, etc.
          (bodily injury, personal injury, death, etc.)
         What property damage could result? To city, employees, citizens, environment, etc.
          (buildings, vehicles, other personal property, pollution spill/cleanup, etc.)


Measures:
         Frequency
             o Low – seldom occurs
             o High – often occurs
         Severity

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             o Low – minor injury, property damage = minor cost paid if a loss occurs
             o High – major injury, property damage = major cost paid if a loss occurs


Responsibilities:


Procurement of Goods, including on-site delivery, installation or routine maintenance:
Departments do a risk assessment for all contracts. If a hazardous activity is involved,
departments will call Risk Management for assistance.


Procurement of Services and Construction, including alteration, renovation or repair: Risk
Management reviews specifications and does a risk assessment for contracts that are greater
than $25,000 and provides written documentation to departments. For contracts that are less
than $25,000, departments do a risk assessment with the assistance of Risk Management.




External (Departmental) Guidelines when purchasing


Goods with on-site delivery, installation or routine maintenance
Service and Construction, including alteration, renovation or repair, less than $25,000


         Low Severity/Low Frequency: Seldom a loss would happen, but if it did, cost would be
          small.
          Retention


             o Goods drop shipped by a common carrier (i.e., office/industrial/plumbing/electrical
                   supplies, building materials, furniture, vehicles, uniforms, library materials, etc.)


             o Service (i.e., printing general orders, etc.)


          On the above, there will be no need to require a certificate of insurance from the
          contractor. However, if department feels an unusual exposure is present, call Risk


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          Management to discuss the procurement. A recommendation may be made for the bid
          specifications to include the following language: “For the duration of the contract, the
          successful bidder(s) will provide a certificate of insurance evidencing insurance that is
          purchased for their business operations. The City of Dallas will be shown as the
          certificate holder.” Risk Management will provide a confirmation memo, to include in the
          procurement file, with above language, a recommendation to provide to City Attorney for
          contract preparation, and provide to procuring department if Purchasing not responsible
          for contract maintenance.


         Low Severity/High Frequency: Loss occurs often (one example, slip & fall), but cost
          would be relatively small.
          Transfer


             o Goods with on-site delivery by contractor (not common carrier), installation or
                 routine maintenance


             o Services - Short term (six months or less) non-professional: (i.e., plumbing
                 services, carpet, furniture, card key entry, etc. installation not associated with a
                 construction project)


          On the above, the bid specifications will need to include the following language: “For the
          duration of the contract, the successful bidder(s) will provide a certificate of insurance
          evidencing proof of General Liability, Automobile Liability and Workers’ Compensation
          insurance coverages. The City of Dallas will be shown as the certificate holder.”


          Note 1: There is no need to require specific limits of liability on the coverages and no
          need to provide a copy of the certificate of insurance to Risk Management for review.
          However, when a certificate of insurance is received and there are questions or
          concerns, call Risk Management.


          Note 2: If department feels an unusual exposure is present that might warrant preparing
          an insurance attachment, call Risk Management to discuss the procurement.




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Goods with on-site delivery, installation or routine maintenance
Service and Construction, including alteration, renovation or repair, less than $25,000
(Continued)


         High Severity/Low Frequency: Seldom a loss would happen but if it did, cost would be
          large.
          Transfer


          On the following, call Risk Management to discuss the procurement. An actual
          insurance attachment may be prepared or a recommendation made to have the bid
          specifications reflect the contractor is to provide a certificate of insurance. Risk
          Management will provide a confirmation memo, to include in the procurement file, with
          recommended language, a recommendation to provide to City Attorney for contract
          preparation, and provide to procuring department if Purchasing not responsible for
          contract maintenance.


             o Goods with hazardous activity (i.e., delivery of chemicals, fuels, etc. where the
                   trucker will pump into our tanks, delivery of wet cement where contractor
                   dispenses cement from chute on contractor’s truck, etc.)


                   The following are examples of recommendations that Risk Management may
                   suggest:


                         “For the duration of the contract, the successful bidder(s) will provide a
                          certificate of insurance evidencing proof of General Liability and Workers’
                          Compensation insurance coverages. The City of Dallas will be provided a
                          Waiver of Subrogation on the Workers’ Compensation policy. The City will
                          be shown as the certificate holder.”



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                    Delivery of chemicals, fuels, etc. where the trucker will pump into our tanks:
                     “The successful bidder(s) shall procure and keep in full force and effect for
                     the duration of the contract liability insurance that complies with all
                     applicable Federal, State and local laws. The successful bidder(s) will
                     provide a certificate of insurance evidencing proof of Automobile Liability
                     insurance coverage. A copy of the MCS 90 Endorsement will be attached
                     to the certificate of insurance. The City of Dallas will be shown as the
                     certificate holder.”


          o Services - non-professional or professional with hazardous activity (i.e., divers to
              clean water tanks, under water pumps, grates, etc., installation of HVAC units on
              roof top, above grade window washing, herbicide/pesticide application,
              helicopter/airplane rental for aerial surveys, armed guard, security, services,
              vaccinations, etc.)


              The following are examples of recommendations that Risk Management may
          suggest:


                    “For the duration of the contract, the successful bidder(s) will provide a
                     certificate of insurance evidencing proof of General Liability and Workers’
                     Compensation insurance coverages. The City of Dallas will be provided a
                     Waiver of Subrogation waiving Rights of Recovery against City of Dallas on
                     the Workers’ Compensation/Employers Liability policy. The City will be
                     shown as the certificate holder.”




Goods with on-site delivery, installation or routine maintenance
Service and Construction, including alteration, renovation or repair, less than $25,000
(Continued)


                    Herbicide/pesticide application: “The successful bidder(s) shall procure and
                     keep in full force and effect for the duration of the contract liability insurance


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              that complies with all applicable Federal, State and local laws. The
              successful bidder(s) will provide a certificate of insurance evidencing proof
              of General Liability and Workers’ Compensation insurance coverages. The
              certificate will indicate the General Liability policy includes
              Pesticide/Herbicide Applicator Coverage Endorsement (CG 2264). The
              City of Dallas will be provided a Waiver of Subrogation waiving Rights of
              Recovery against City of Dallas on the Workers’ Compensation/Employers
              Liability policy. The City will be shown as the certificate holder.”


             Helicopter/airplane rental: “For the duration of the contract, the successful
              bidder(s) will provide a certificate of insurance evidencing proof of Aviation
              Liability insurance coverage. The City of Dallas will be shown as the
              certificate holder.”


             Armed services: “The successful bidder(s) shall procure and keep in full
              force and effect for the duration of the contract liability insurance that
              complies with all applicable Federal, State and local laws. The successful
              bidder(s) will provide a certificate of insurance evidencing proof of
              General/Security Guard Liability and Workers’ Compensation insurance
              coverages. The certificate will indicate the General/Security Guard Liability
              policy extends to include actions by armed guards. The City of Dallas will
              be provided a Waiver of Subrogation waiving Rights of Recovery against
              City of Dallas on the Workers’ Compensation/Employers Liability policy.
              The City will be shown as the certificate holder.”


             Medical services: “For the duration of the contract, the successful bidder(s)
              will provide a certificate of insurance evidencing proof of Medical
              Malpractice Liability insurance coverage. The City of Dallas will be shown
              as the certificate holder.”


             Other professional services (i.e., architect, engineer, accountant,
              consultant, auditor, attorney, land survey, environmental testing, etc.): “For
              the duration of the contract, the successful bidder(s) will provide a



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                       certificate of insurance evidencing proof of Professional Liability insurance
                       coverage. The City of Dallas will be shown as the certificate holder.”


          Note: On the above examples, there is no need to require specific limits of liability on the
          coverages and no need to provide a copy of the certificate of insurance to Risk
          Management for review. However, when a certificate of insurance is received and there
          are questions or concerns, call Risk Management.




         Miscellaneous (Regardless of contract cost)


             o Professional Services: Conceptual, feasibility, development or master plans or
                professional services in conjunction with construction (to include renovation,
                repair, update, etc.) projects. Departments normally use an RFQ (Request for
                Qualifications) or an RFP (Request for Proposal) to request from consultants,
                architects, engineers, or construction managers, letter of interest, statement of
                qualifications or proposals. The project manager must provide Risk Management
                the specifications in order to prepare an insurance attachment that will be included
                in the RFQ or RFP.


                However, in an effort to assist project managers in the departments of Aviation,
                Equipment & Building Services, Park & Recreation, Public Works & Transportation
                and Water Utilities for their construction projects, and the buyers in Business
                Development & Procurement Services on other RFQ’s, Risk Management has
                agreed the following language may be included in the specifications:


                “Commercial General Liability, Business Automobile Liability, Workers’
                Compensation and Professional Liability Insurance are required from firms that
                enter into a professional services contract with the City of Dallas. This
                information is being provided for informational purposes only. Insurance


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          coverage and limits will be determined and an actual insurance attachment
          prepared based on the proposal of services submitted by the chosen
          professional services provider. Projects that are conceptual, feasibility,
          development or master plans, etc. resulting in no construction or no
          construction oversight require Professional Liability with at least $250,000 limit
          per claim, $500,000 aggregate limit. Typically, projects that involve development
          or preparation of system specifications, diagrams, schematics, etc. or result in
          construction or construction oversight require Professional Liability with at
          least $1,000,000 limit per claim, $1,000,000 aggregate limit. Please provide a
          declaration indicating the types of insurance that is purchased for your business
          operations.”


          Note 1: There will be no need to provide a copy of the declaration to Risk
          Management for review.


          Note 2: October 1999, the City Attorney’s Office updated the professional services
          contracts (architect, engineer, consultant, construction manager). One of the
          changes was insurance was pulled out of the document and reference was made
          to an attachment or exhibit. Risk Management must prepare this (insurance
          attachment/exhibit) so it can be included in the contract. Insurance is determined
          by the scope of services. Once negotiations begin, to ensure appropriate
          insurance is required, the project manager will need to provide Risk
          Management a copy of the proposal from the chosen professional service provider
          for the project. Since the insurance document is a part of the contract, it needs to
          be prepared prior to sending information to City Attorney’s Office for them to
          prepare the contract.




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          o Most construction projects use either the North Central TxCOG (lateral [sidewalks,
             alleys, streets, etc.]), including the City’s General Supplemental Conditions, or the
             City’s General Conditions for Building Construction (vertical [new structure/facility,
             such as fire stations, libraries, recreation centers water/wastewater plant, pump
             station, pavilions, shade structures, concession stands restrooms, and includes
             renovation, alteration or repair]) construction documents. Insurance requirements
             are included in the COG supplemental (Section 1.26) and City’s General
             Conditions for Building Construction (Article 11). All insurance coverages have
             specific limits with following exceptions:


                    o COG
                              Umbrella. Risk Management must be consulted in order to
                               assist in determining the Umbrella limit of liability to be shown in
                               the construction document. Risk Management will provide a
                               confirmation memo to the project manager for documentation and
                               inclusion in the special provisions.


                               In an effort to assist project managers in the departments of
                               Aviation, Equipment & Building Services, Park & Recreation,
                               Public Works & Transportation and Water Utilities, Risk
                               Management has agreed to the following:


                               o If the project is site (playground, parking, athletic field, nature
                                      trail, etc., and does not involve pavilions, shade structures,
                                      concession stands, restrooms, etc), road (not thoroughfare),
                                      sidewalk/alley, water/sewer/waste-stormwater lines (not a
                                      pipeline) improvement, replacement or development, the
                                      Umbrella Liability limit to include in the construction document
                                      will be at least $1,000,000. There will be no need to consult
                                      with Risk Management unless the project manager feels there
                                      is an unusual exposure.




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          o City’s/Building Construction. Risk Management must be consulted
             prior to advertising, otherwise awarded contractor must provide all
             insurance required in Article 11.
                    Property Insurance. Article 11.2(a-f) – Builders Risk/Installation
                     Floater and Boiler & Machinery
                    Umbrella. Article 11.4 - $3,000,000 limit


                     Risk Management will provide a confirmation memo to the project
                     manager for documentation and inclusion in the special
                     provisions indicating what needs to be provided under article 11.2
                     and the umbrella limit in article 11.4.


          o Risk Management prepared – typically when Purchasing utilized.
             Insurance requirements will track appropriate construction document




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