Procurement of Insurance
Third Party Procurement
Frequently Asked Questions
Q = Question; A = Answer
Q. Does the renewal of insurance policies for the transit agency, such as worker's compensation or liability coverage fall under Procurement guidelines? Are we required to have our broker approach the insurance market every year for quotes or can we ask them to approach carriers about our account to determine if there is a lower cost than our incumbent carrier?
A. Procurement of insurance that is financed with FTA grant funds (e.g., an operating grant) would be covered by FTA Circular 4220.1F. If, however, the agency pays for the insurance entirely out of its own funds, then 4220.1F would not apply. Circular 4220.1F requires that you award the insurance contracts competitively but the length of these contracts is up to your good business judgment as to how long it is prudent to continue before requesting quotes from different carriers. That may be one year or it may be some longer period. Your broker could advise you on this issue. (Posted: December 2009)