(d) Employers' liability is the liability imposed upon the employer by law for damages on account of personal injuries, including death resulting therefrom, sustained by his employees by reason of accidents.

(e) The insurance coverage with respect to employers' liability and occupational disease shall be required with a minimum limit of $100,000 per incident.

(f) With respect to workmen's compensation insurance overseas, pursuant to the Defense Base Act, as amended (42 U.S.C. 1651), the clause set forth in § 18-10.403 (a) shall be included in all construction contracts, as defined in § 18-10.101-6, to be performed outside the United States. § 18-10.501-2

ance.

General liability insur

(a) Liability insurance, commonly referred to as third-party liability insurance, protects the insured against his liability to members of the public for bodily injury or death or for damage to or destruction of the property of others. An insurance policy may be obtained to insure the several general liability hazards separately or in various combinations. The advantage of a comprehensive general liability policy is that the insurance afforded protects the insured from loss arising from any cause other than those causes specifically excluded. This contrasts with the ordinary policy, which names the hazards insured against. In this manner the danger of "uninsured gaps" in the insured's insurance program is minimized. Comprehensive general (bodily injury) liability insurance shall be required with minimum limits of $50,000 per person and $100,000 per accident.

(b) Property damage liability insurance will be required only in special circumstances. Examples of such special circumstances are:

(1) Where a commingling of operations permits property damage coverage at a nominal cost to NASA under insurance carried by a contractor in the course of his commercial operations; and

en

(2) Where the contractors are gaged in the handling of high explosives or in extrahazardous research and development activities undertaken in populated areas.

(a) Automobile liability insurance shall be required on the comprehensive form of policy and shall provide for bodily injury liability and property damage liability covering the operation of all automobiles used in connection with the performance of a contract. Such insurance will protect the contractor against (1) his liability to members of the public because of bodily injury or property damage arising out of the operations, maintenance, or use of the insured vehicles; and (2) financial loss resulting from damage to and loss or destruction of insured vehicles.

(b) An insurance policy for automobiles can be written to apply to specific vehicles, classes of vehicles, or to all vehicles in which the insured may have an insurable interest. The comprehensive automobile liability policy is generally chosen by a contractor, since it can minimize the possibility of an uninsured loss. A comprehensive automobile liability insurance policy may or may not include coverage (comprehensive physical damage and collision) for damage to and loss or destruction of insured vehicles.

(c) Automobile bodily injury liability and property damage liability insurance shall be required with minimum limits of $50,000 per person and $100,000 per accident for bodily injury liability and $5,000 for property damage liability on the comprehensive policy form covering all owned, non-owned, hired, and Government-furnished motor vehicles which will be used in the contract operations where use will not be limited exclusively to the premises on which the work under such contract is performed. Where such insurance relates to contracts to be performed outside the United States, its possessions, and Puerto Rico, the contracting office may revise downward the

monetary limits prescribed herein. The Government shall normally assume the risk of a contractor's uninsured thirdparty liability to the extent provided for by the clause entitled "Insurance-Liability to Third Persons" contained in § 18-7.203-22.

§ 18-10.501-4 Aircraft public and passenger liability insurance.

(a) This type of insurance covers the liability imposed by law upon the aircraft owner and operator. The basic coverages are bodily injury liability, property damage liability, and passenger liability. Where aircraft are used in connection with the performance of a contract, aircraft liability insurance shall be carried by the contractor to cover bodily injury, including passenger liability of the exposure exists), and property damage coverage. The minimum limits of liability shall be $50,000 per person and $100,000 per accident for bodily injury and $50,000 per accident for property damage. The Government will normally assume the risk of contractor's uninsured third-party liability to the extent provided for by the clause entitled "Insurance Liability to Third Persons," contained in § 18-7.203-22.

(b) Aircraft hull insurance covers the insured for damage to or loss of the insured aircraft when loss or damage results from an insured peril. This type of insurance will not be purchased at Government expense to cover aircraft manufactured, modified, or serviced, under a cost-reimbursement type contract, against risks which are assumed by the Government under the "Government-Furnished Property" clause or other clauses in a contract. Such insur

ance is appropriate and will be required for aircraft not owned by the Government and used in connection with operations under a cost-reimbursement type contract.

(2) Group insurance plans are either contributory, where the employees and the contractor jointly pay the costs of the benefits, or noncontributory, where the total costs of the benefits are paid by the contractor. Some group insurance plans provide for hospital and surgical benefits for the dependents of employees, and under these plans the employee usually pays all or a portion of the cost. Employees are usually eligible after one to three months of service. to participate in group insurance plans

(3) It is recognized that group insurance plans providing life insurance, surgical, hospitalization, major medical, and nonoccupational accident insurance coverages are important to industrial relations programs. Considerations which influence the benefits and the costs for benefits under a particular group insurance plan are (i) the geographical locality of the operations of the contractor,

(ii) wage levels, (iii) amount of other

fringe benefits, (iv) benefits available under applicable workmen's compensation laws, (v) union negotiations, (vi) the costs of the group insurance benefits, and (vii) the effects of such costs in competitive prices.

(b) Approval of group insurance plans. The contracting officer will determine whether the group insurance benefits are connection with the performance of reasonable in amonut and necessary in NASA contracts. Such plans will generally be approved where they are comparable to those of competing employers or industries in the contractor's operational areas. Where a contractor is working primarily on Government contracts, the restraints imposed by competition may

be lacking, and a careful review will be

made, including a determination that the contractor does not furnish his employees greater benefits under cost-reimbursement type contracts than are granted his employees engaged in regular commercial operations of the contractor. In addition, the experience of the Military Departments or other Government agencies with the particular contractor shall be investigated. Changes in previously approved group insurance plans (including changes in premium rates) must be submitted for approval by the contracting officer.

(c) The contractor is required to credit to the NASA account a share of

(a) "Use and Occupancy" or "Business Interruption Insurance" is a form of insurance which indemnifies the contractor for certain losses incurred during a period of interruption or suspension of business operations resulting from physical damage to property essential to the conduct of business. Under such insurance, the contractor is protected against loss on account of fixed charges and other expenses which accrue during such period and for loss of net profit which the contractor is prevented from earning. The amount of coverage purchased under this form of insurance is based on the probable loss the contractor would sustain during the period of interruption or suspension of business operations. The premium charge is based on the aggregate indemnity under the policy.

(b) (1) When costs in connection with use and occupancy insurance are presented for allowance, the aggregate coverage available will be analyzed. Only that percentage of total insurance cost which is identifiable with insurance benefits determined to be acceptable within the intent of paragraph (b)(2) of this section will be allowed.

(2) Costs of insuring those items of fixed charges and other expenses which are allowable items of costs in NASA contracts will be considered allowable. Such fixed charges and other expenses include but are not limited to salaries of employees under contract and other key employees, rents, most insurance premiums, and charges for noncancellable contracts for light, heat, or power.

(3) The cost of insuring the net profit a contractor is prevented from earning during a period of business interruption or suspension is unallowable. Similarly,

the costs of insuring certain items of fixed charges such as interest, Federal income taxes, donations, and certain advertising expenses are unallowable. § 18-10.502 Self-insurance.

Self-insurance may be approved by the contracting officer in lieu of the insurance requirement for one or more of the mandatory coverages required by §§ 18-10.501-1, 18-10.501-2, 18-10.501-3, and 18-10.501-4, Provided, That:

(a) The contractor has maintained the practice of self-insurance in respect to such coverage or risk for a period of not less than 3 years;

(b) Adequate safety inspection and engineering programs are carried on by the contractor;

(c) The contractor has an effective and established policy for claims investigation;

(d) The contractor has established a plan of funding so that the annual cost of "loss payments" remains reasonably constant;

(e) The charges to be made against the contract for the cost of the selfinsurance program may reasonably be expected to be less than the charge for an equivalent program of insurance; and

(f) The Government contracts will share equitably in any release of reserve funds.

Self-insurance programs which do not meet the foregoing conditions shall be submitted for approval to the Director of Procurement.

This Subpart 18-10.6 sets forth NASA policy with respect to insurance of industrial facilities held by a contractor. § 18-10.601 Responsibility for liabili ties to third persons.

When industrial facilities are provided by the Government under a facilities contract or a lease, the contract or lease shall require that during the period of construction, installation, alteration, repair, or use, and at any other time as directed by the Department concerned, the contractor or lessee shall insure or otherwise provide approved security for liabilities to third persons (including employees of the contractor or lessee) in the same manner and to the same extent as required in § 18-10.501.

§ 18-10.602

Responsibility for loss or

damage to facilities.

§ 18-10.602-1 Facilities contracts.

Facilities contracts shall provide that the contractor shall not include the cost of insurance in any contract except to the extent of insurance required or approved by NASA or the Department or agency concerned. If a facilities contract or lease does not restrict the use of the facilities to work performed for the Government, provision shall be made that the contractor shall procure and maintain insurance as NASA or the Department or agency concerned may require against loss or damage to the industrial facilities (see § 18-13.411).

It is NASA policy that contractors and subcontractors will:

(a) Protect the life and health of NASA and contractor employees during their work on NASA programs;

(b) Avoid accidental work interruptions which could delay NASA programs; (c) Prevent damage to property supplies and equipment;

(d) Assure proper protection of the public from hazards introduced by NASA contractors and subcontractors; and

(e) Provide data whereby risks and loss factors in space technology related to NASA programs can be accumulated and evaluated.

§ 18-10.5002 Responsibility.

The

(a) Installation safety officer. installation safety officer will advise and assist the contracting officer in:

(1) Evaluating prospective contractors' safety and health programs pursuant to Subpart 18-1.9;

(2) Determining whether safety and health provisions should be included in a proposed procurement; and

(3) Selecting contract provisions which define the safety and health requirements applicable to a particular contract.

(b) Contracting officer. The contracting officer will obtain the advice, assistance, and recommendations from the safety officer in the following proposed procurements:

(1) Construction of facilities on Government installations;

(2) Manufacture of boosters, engines, liquid and solid fuels, oxidizers, and/or propellants;

(3) Transportation of fuels, oxidizers, space-related chemicals, and other hazardous materials;

(4) Research, development or test of engines, related components and propellants which involve hazardous operations or the use of hazardous materials, and

Hazardous materials and operations for the purpose of this subpart are those involved in or concerned with nonnuclear detonations and explosions (e.g., overpressures, fireballs, and fragmentation), fire and heat, acoustics, toxicity, nuclear radiation, electromagnetic radiation, light, fuels, acids, propellants, and environmental factors.

§ 18-10.5004 Contract provisions.

General safety and health requirements will be prescribed by the safety officer as set for in § 18-10.5002(a) (3). The following clause may be used as a guide:

SAFETY AND HEALTH (FEBRUARY 1964)

(a) In order to provide safety controls for protection to the life and health of employees and other persons; for prevention of damage to property, materials, supplies, and equipment; and for avoidance of work interruptions in the performance of the contract; the Contractor will comply with the following standards:

(Insert the standards, codes, criteria
prescribed by the Safety Officer)

Further, the Contractor shall take or cause to be taken such additional safety measures as the Contracting Officer may determine to be reasonably necessary provided, that if compliance with such additional safety measures results in a material increase in the cost or time of performance of the contract,

an equitable adjustment will be made in accordance with the clause of this contract entitled "Changes."

(b) Prior to commencement of work the Contractor will submit in writing his plan for complying with the Safety and Health provisions of this contract, and will meet with the representative of the Contracting Officer to discuss and develop mutual understandings relative to administration of the overall safety program.

(c) During the performance of work under this contract, the Contractor shall comply with all procedures prescribed by the Contracting Officer for the control and safety of persons visiting the job site and will comply with such requirements to prevent accidents as may be prescribed by the Contracting Officer.

(d) The Contractor will maintain an accurate record of, and will report to the Contracting Officer in such manner as the Contracting Officer may prescribe all accidents and incidents resulting in death, traumatic injury, occupational disease, and/or damage to property, materials, supplies and equipment incident to work performed under the contract.

(e) The Contracting Officer will notify the Contractor of any noncompliance with the provisions of this clause and corrective action to be taken. The Contractor shall, after receipt of such notice, immediately take such corrective action. (Such notice, when delivered to the Contractor or his representative at the site of the work, shall be deemed sufficient for the purpose.) If the Contractor fails or refuses to comply promptly, the Contracting Officer may issue an order stopping all or part of the work until satisfactory corrective action has been taken. No part of the time lost due to any such stop work order shall be the subject of claim for extension of time or for costs or damages by the Contractor.

(f) Compliance with the provisions of this clause by subcontractors will be the responsibility of the Contractor.