The Federal Acquisition Regulation (FAR) is a comprehensive set of regulations governing federal procurement — prescribing how agencies acquire goods and services and how contractors compete for, win, and perform government contracts. This encyclopedia of federal procurement addresses everything from debriefing rights to small business subcontracting requirements to how agencies should evaluate proposals. It also speaks directly to insurance and risk allocation. This series of blog posts will examine several common FAR clauses addressing insurance and risk allocation and will explain their significance from both a government contracts and an insurance coverage perspective.
The FAR & Its Insurance Provisions
The FAR contains both explanatory guidance and model contract clauses. The guidance on insurance is found in Part 28.3, and the model contract clauses related to insurance are found in Part 52.228. Agencies must follow the guidance of Part 28.3 and, where directed to do so, insert appropriate contract clauses from Part 52.228 into solicitations (and the resulting contracts).
Reading the text of the guidance and the contract clauses is essential. Some of the clauses impose mandatory requirements, using language such as “shall” and “must,” whereas other clauses merely incorporate permissive language, stating that an agency “may” institute certain insurance requirements. For example, FAR 28.307-2 states that the agency “must require” certain liability insurance coverage, while FAR 28.306(a) states that “in special circumstances agencies may specify” certain insurance requirements.
The FAR Council is undertaking a comprehensive redesign of the FAR (for more information, see our post explaining this project). As part of this process, the FAR Council has published model deviation text for various FAR parts, and agencies are issuing class deviations indicating their implementation of that model deviation text. Importantly, Part 28 is being retained with only minor changes made for plain language clarity.
What’s Next?
Over the next few weeks, this series will continue with posts examining three key areas of insurance that may be required by your government contract: automotive liability, liabilities for workers, and liabilities to third persons.
- Automobile Liability — FAR 52.228-8 & 52.228-10: Federal contracts involving vehicles often include auto-related insurance requirements. These clauses generally identify the party responsible for injuries or property damage connected to vehicle use and ensure that contractors maintain adequate insurance to cover their share of that responsibility. In some cases — such as higher-risk transportation work — the contracting officer may require higher limits than state minimums to reflect the nature of the operations. Understanding these clauses helps contractors evaluate risk, structure insurance programs, and price work appropriately.
- Liabilities for Workers — FAR 52.228-3 (Defense Base Act and Related Requirements): When contract performance involves employees working domestically or overseas, the government may require specific protections for workplace injuries. For example, the Defense Base Act applies to certain overseas projects and establishes a mandatory workers’ compensation framework with standardized benefits. These requirements ensure injured workers receive prompt support while preventing unexpected liability disputes. Contractors must be attentive to the scope of these obligations, particularly when work crosses state or national boundaries.
- Liability to Third Persons — FAR 52.228-7: Some federal contracts address allocation of responsibility for claims brought by third parties (for bodily injury, property damage, etc.) that arise from contract performance. This clause outlines the kinds of losses the contractor is expected to cover and the circumstances under which the government may pay for or reimburse certain costs. It is designed to allocate risk fairly while ensuring claims are managed efficiently and without disrupting performance.
Together, these provisions govern major categories of operational risk. The subsequent posts in this series will take a closer look at when these clauses apply, how they affect real-world exposure, and what contractors should consider when reviewing solicitations and structuring their insurance programs. As a contractor, understanding how to map the FAR clauses in a solicitation to specific coverages, review exclusions and endorsements, and coordinate early with both government contracts and insurance coverage counsel will best position you to meet your obligations without assuming unintended exposure.