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Tools & Programs: SEP-15

Texas Toll Roads Statewide Open-Road Toll Collection System Project (TX Toll Collection System)

Comprehensive Development Agreement TxDot Statewide Open-Road Toll Collection System

SECTION 9. INSURANCE

Developer shall purchase and continuously maintain in full force and effect through the expiration of the time periods specifically provided below, the insurance coverages and limits specified in this Section 9. The insurance provided hereunder shall be available for the benefit of TxDOT and Developer with respect to covered claims, but shall not be interpreted to relieve Developer of any obligations hereunder. All insurance required hereunder shall be procured from insurance or indemnity companies with an A.M. Best and Company rating level of A- or better, Class VIII or better, or as otherwise approved by TxDOT and authorized or approved to do business in the State. All limits of liability set forth below are in U.S. dollars.

9.1 Developer Provided Insurance

Developer shall provide, at its own expense, insurance acceptable to TxDOT as described herein and shall maintain such insurance in full force and effect throughout the duration of this Agreement (including any Maintenance Option Term) as specified herein.

9.1.1 Commercial General Liability Insurance

Developer shall provide commercial general liability broad form coverage (for bodily injury, property damage, personal injury and advertising injury) written on an occurrence form that shall be no less comprehensive and no more restrictive than the coverage provided by Insurance Services Office (ISO) form 1988. Such insurance shall include, by its terms or appropriate endorsements, coverage for bodily injury, broad form property damage, fire legal liability (not less than the replacement value of the portion of the premises occupied), personal injury, blanket contractual, independent contractors, premises operations, and products and completed operations. This coverage shall have a minimum limit of $600,000 per occurrence and $600,000 annual aggregate and shall be endorsed to cover each Pilot System, Project Segment and Project Site for which an NTP has been issued. The policy shall include products and completed operations extended coverage for a minimum of five years following expiration of the Maintenance Term (inclusive of any Maintenance Option Term). The policy deductibles shall be subject to TxDOT's written approval. If Developer's commercial general liability insurance or other form with a general aggregate limit and products and completed operations aggregate limit is used, then the annual aggregate limits shall apply separately to the Project, or Developer may obtain separate insurance to provide the required limit which shall not be subject to depletion because of claims arising out of any other project or activity of Developer; any such excess insurance shall be at least as broad as Developer's primary insurance. Developer shall be the named insured and each of the Indemnified Parties shall be additional insureds with respect to liability arising out of the acts or omissions of any Developer-Related Entity, whether occurring on or off of each Project Site. The required limits can be satisfied by a combination of a primary policy and an excess policy.

9.1.2 Workers' Compensation Insurance

Developer shall provide worker's compensation insurance in conformance with applicable Law. Developer shall be the named insured on these policies. The worker's compensation coverage will contain the following endorsements:

(a) A voluntary compensation endorsement.

(b) An alternative employer endorsement.

(c) An endorsement extending coverage to all states operations on an "if any" basis.

9.1.3 Business Automobile Liability Insurance

Developer shall provide comprehensive business automobile liability insurance covering the ownership, maintenance or use of all owned/leased, non-owned and hired vehicles used in the performance of the Work, including loading and unloading, with limits of not less than $250,000 per person, $500,000 per occurrence for bodily injury, and $100,000 per occurrence for property damage liability. Developer shall be the named insured and the Indemnified Parties shall be additional insureds with respect to liability arising out of the acts or omissions of any Developer-Related Entity, whether occurring on or off of each Project Site. The policy deductibles shall be subject to TxDOT's written approval. The required limits can be satisfied by a combination of a primary policy and an excess or umbrella policy.

9.1.4 Professional Liability Insurance

Developer shall provide Project-specific professional liability coverage with limits not less than $5,000,000 per claim and aggregate. The professional liability coverage shall protect against any negligent act, error or omission arising out of design and/or engineering services performed by any Developer-Related Entity with respect to the Project. The policy shall have a retroactive date no later than __________ __, 2005 and shall have a five-year extended reporting period from the date of the latest Final Acceptance to occur for any Pilot System or Project Segment with respect to events which occurred but were not reported during the term of the policy. The coverage shall include all Developer-Related Entities that are performing design and/or engineering services with respect to the Project. The Indemnified Parties shall not be a named insured under the policy, but the policy shall include an endorsement to provide vicarious liability coverage for TxDOT, the State, and their respective officers, directors, agents and employees. The policy shall have a deductible of no greater than $100,000.

9.2 General Insurance Requirements

9.2.1 Premiums, Deductibles and Self-Insured Retentions

Developer shall timely pay the premiums for all insurance required under this Section 9. Developer agrees that, for each claim, suit or action made against insurance provided hereunder, with respect to all matters for which Developer is responsible hereunder, Developer shall be solely responsible for all deductibles, self-insured retentions and amounts in excess of the coverage provided. Subject to the other terms of this Agreement, with respect to all matters for which TxDOT is responsible hereunder, TxDOT shall remain fully responsible for amounts in excess of the coverage provided.

9.2.2 Verification of Coverage

9.2.2.1 Policies. Concurrently with Developer's execution hereof, Developer will deliver to TxDOT (1) a certificate of insurance with respect to each policy required to be provided by Developer under this Section 9 and (2) copies of all endorsements to the policies that set forth the required additional insureds and other amendments to the policy forms. The required certificates must include original signatures by the authorized representative of the insurance company shown on the certificate with proof that he/she is an authorized representative thereof and is authorized to bind the named underwriter(s) and their company to the coverage, limits and termination provisions shown thereon. TxDOT shall have no duty to pay or perform under this Agreement until such certificate(s) and endorsements, in compliance with all requirements of this Section 9, have been provided. Upon TxDOT's request, certified, true and exact copies of each of the insurance policies (including renewal policies) required under this Section 9 shall be provided to TxDOT. Prior to issuance of any NTP subsequent to Pilot System NTP 1, Developer shall deliver to TxDOT a certificate of insurance or other evidence acceptable to TxDOT confirming that the Work and obligations of Developer with respect to such Pilot System or Project Segment shall be covered by the insurance coverages required pursuant to this Section 9.

9.2.2.2. Renewal Policies. Developer shall promptly deliver to TxDOT a certificate of insurance and copies of all endorsements with respect to each renewal policy, as necessary to demonstrate the maintenance of the required insurance coverages for the terms specified herein. Such certificate shall be delivered not less than 45 Days prior to the expiration date of any policy and shall bear a notation evidencing payment of the premium therefore. If requested by TxDOT from time to time, certified duplicate copies of the renewal policy shall also be provided.

9.2.3 Subcontractor Insurance Requirements

Developer shall cause each Subcontractor to provide insurance that complies with requirements for Developer-provided insurance set forth in this Section 9 in circumstances where the Subcontractor is not covered by Developer-provided insurance and provided that Developer shall have sole responsibility for determining the limits of coverage required to be obtained by Subcontractors, which determination shall be made in accordance with reasonable and prudent business practices. Developer shall cause each such Subcontractor to include each of the Indemnified Parties as additional insureds under such Subcontractor's general liability and motorized vehicle liability insurance policies. Developer shall require each such Subcontractor to require that its insurer agree to waive any subrogation rights the insurers may have against the Indemnified Parties. If requested by TxDOT, Developer shall promptly provide certificates of insurance evidencing coverage for each Subcontractor. TxDOT shall have the right to contact the Subcontractors directly in order to verify the above coverage.

9.2.4 Endorsements and Waivers

All insurance policies required to be provided by Developer hereunder shall contain or be endorsed to comply with the following provisions, provided that, for the workers' compensation policy, only the following clauses (d) and (f) shall be applicable:

(a) For claims covered by the insurance specified herein, said insurance coverage shall be primary insurance with respect to the insureds, additional insureds, and their respective members, directors, officers, employees, agents and consultants, and shall specify that coverage continues notwithstanding the fact that Developer has left a Project Site. Any insurance or self-insurance beyond that specified in this Agreement that is maintained by an insured or additional insured shall be excess of such insurance and shall not contribute with it.

(b) Any failure on the part of a named insured to comply with reporting provisions or other conditions of the policies, any breach of warranty, any action or inaction of a named insured or others, any foreclosure relating to the Project or any change in ownership of all or any portion of the Project shall not affect coverage provided to the other insureds or additional insureds (and their respective members, directors, officers, employees, agents and consultants).

(c) The insurance shall apply separately to each insured and additional insured against whom a claim is made or suit is brought, except with respect to the aggregate limits of the insurer's liability.

(d) Each policy shall be endorsed to state that coverage shall not be suspended, voided, canceled, modified or reduced in coverage or in limits except after 30 Days' prior written notice by certified mail, return receipt requested, has been given to TxDOT. Such endorsement shall not include any limitation of liability of the insurer for failure to provide such notice.

(e) All endorsements adding additional insureds to required policies shall be on form CG-20-10 (1985 edition) or an equivalent form providing additional insureds with coverage for "completed operations".

(f) Each policy shall provide coverage on an "occurrence" basis and not a "claims made" basis (with the exception of professional liability and errors and omissions policies).

(g) The commercial general liability insurance policy shall be endorsed to state that coverage for Subcontractor employees shall not be excluded.

(h) The automobile liability insurance policy shall be endorsed to include Motor Carrier Act Endorsement-Hazardous materials clean up (MCS-90).

9.2.5 Waivers of Subrogation

TxDOT and Developer waive all rights against each other, against each of their agents and employees and against Subcontractors and their respective members, directors, officers, employees, agents and consultants for any claims, but only to the extent covered by insurance obtained pursuant to this Section 9, except such rights as they may have to the proceeds of such insurance and provided further that, Developer shall not be entitled to additional compensation or time extension under this Agreement to the extent compensated by any insurance specified herein. Developer shall require all Subcontractors to provide similar waivers in writing each in favor of all other parties enumerated above. Each policy, including workers' compensation, shall include a waiver of any right of subrogation against the additional insureds (and their respective members, directors, officers, employees, agents and consultants).

9.2.6 Changes in Requirements

TxDOT shall notify Developer in writing of any changes in the requirements applicable to insurance required to be provided by Developer. Pursuant to a Change Order, any additional cost from such change shall be paid by TxDOT and any reduction in cost shall reduce the applicable Price.

9.2.7 No Recourse

There shall be no recourse against TxDOT for payment of premiums or other amounts with respect to the insurance required to be provided by Developer hereunder.

9.2.8 Support of Indemnifications

The insurance coverage provided hereunder by Developer is not intended to limit Developer's indemnification obligations under Section 18.

9.2.9 Commercial Unavailability of Required Coverages

If, through no fault of Developer, any of the coverages required in this Section 9 (or any of the required terms of such coverages, including policy limits) become unavailable or are available only with commercially unreasonable premiums, TxDOT will work with Developer to find commercially reasonable alternatives to the required coverages that are acceptable to TxDOT. Developer shall not be entitled to any increase in any Price for increased costs resulting from the unavailability of coverage and the requirement to provide acceptable alternatives. TxDOT shall be entitled to a reduction in the applicable Price if it agrees to accept alternative policies providing less than equivalent coverage, with the amount to be determined by extrapolation using the insurance quotes included in the EPDs (or based on other evidence of insurance premiums as of the Proposal Date if the EPDs do not provide adequate information). TxDOT's right to a reduction in Price as set forth in the preceding sentence shall be without regard to the insurance costs expended by the Developer for the less than equivalent coverage or on other insurance required under this Section 9.

9.3 Prosecution of Claims

Unless otherwise directed by TxDOT in writing, Developer shall be responsible for reporting and processing all potential claims by TxDOT or Developer against the insurance required to be provided under this Section 9. Developer agrees to report timely to the insurer(s) any and all matters which may give rise to an insurance claim and to promptly and diligently pursue any and all insurance claims on behalf of TxDOT, whether for defense or indemnity or both. TxDOT agrees to promptly notify Developer of TxDOT's incidents, potential claims, and matters which may give rise to an insurance claim by TxDOT, to tender its defense or the claim to Developer, and to cooperate with Developer as necessary for Developer to fulfill its duties hereunder.

9.4 Commencement of Work

Developer shall not commence Work under this Agreement until it has obtained the insurance required under this Section 9, has furnished original certificates of insurance evidencing the required coverage as required under Section 9.2.2 and such insurance has been approved in writing by TxDOT, nor shall Developer allow any Subcontractor (or shall such Subcontractor be entitled) to commence work under its Subcontract until the insurance required of the Subcontractor has been obtained and approved by Developer. No delay in securing such insurance, certificates of insurance or approvals shall extend any time period or Completion Deadline or provide Developer any other relief or entitlement for a Change Order.

9.5 TxDOT's Right to Remedy Breach by Developer

If Developer or any Subcontractor fails to provide insurance as required herein, TxDOT shall have the right, but not the obligation, to purchase such insurance or to suspend Developer's right to proceed until proper evidence of insurance is provided. Any amounts paid by TxDOT shall, at TxDOT's sole option, be deducted from amounts payable to Developer or reimbursed by Developer upon demand, with interest thereon from the date of payment by TxDOT to the reimbursement date, at the maximum rate allowable under applicable Law. Nothing herein shall preclude TxDOT from exercising its rights and remedies under Section 16 as a result of the failure of Developer or any Subcontractor to satisfy the obligations of this Section 9.

9.6 Disclaimer

Developer and each Subcontractor have the responsibility to make sure that their insurance programs fit their particular needs, and it is their responsibility to arrange for and secure any insurance coverage which they deem advisable, whether or not specified herein.

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