FAR 28.302—Notice of cancellation or change.
Plain-English Summary
FAR 28.302 addresses how the Government protects its interest when a contractor is required to maintain insurance or self-insurance. It covers two related topics: first, the required policy endorsement for insurance provided by an insurer, and second, the restriction on changing or reducing self-insurance coverage. In the insured-coverage context, the section requires an endorsement stating that any cancellation or material change that would adversely affect the Government is not effective unless written notice is given in the manner and timeframe required by the contracting officer. In the self-insurance context, the contractor may not change or decrease the coverage without prior approval from the administrative contracting officer, with a cross-reference to FAR 28.308(c). Practically, this section ensures the Government is alerted before coverage disappears or is weakened, so it can assess risk, enforce contract requirements, and avoid gaps in protection.
Key Rules
Required insurance endorsement
If the Government requires the contractor to carry insurance, the policy must include an endorsement protecting the Government’s interest. The endorsement must state that cancellation or any material change adversely affecting the Government is not effective unless written notice is provided as required by the contracting officer.
Notice must follow CO instructions
The timing, recipient, and form of notice are controlled by the contracting officer’s requirements. The contractor and insurer must ensure the notice provisions in the policy match the contract’s specific notice instructions.
Material changes are covered
The rule is not limited to outright cancellation. Any material change in coverage that could harm the Government’s interest is also subject to the notice requirement.
Self-insurance needs prior approval
When coverage is provided through self-insurance, the contractor may not change or reduce the coverage without prior approval from the administrative contracting officer. This creates a separate control point for nontraditional coverage arrangements.
Cross-reference to FAR 28.308(c)
The self-insurance restriction must be read together with FAR 28.308(c), which provides additional guidance on self-insurance approval and administration. Contractors should treat the two provisions as part of the same compliance framework.
Responsibilities
Contracting Officer
Specify the required notice for cancellation or material change, including how notice must be given and to whom. Ensure the contract’s insurance requirements protect the Government’s interest.
Administrative Contracting Officer
Approve any proposed change or decrease in self-insurance coverage before the contractor implements it. Evaluate whether the revised coverage remains adequate.
Contractor
Obtain insurance policies with the required endorsement, ensure the insurer and policy language comply with the contract, and avoid any coverage change that could affect the Government without following the required notice process. If using self-insurance, seek prior approval before changing or reducing coverage.
Insurer
Provide written notice of cancellation or material change as required by the contracting officer when the policy includes the required endorsement.
Practical Implications
This section is a risk-control provision: it helps prevent the Government from unknowingly losing protection because a policy was canceled, narrowed, or otherwise changed.
A common pitfall is assuming standard commercial policy notice language is enough; the policy must match the contracting officer’s specific notice requirements.
Another frequent issue is overlooking material changes that are not full cancellations, such as reduced limits, exclusions, or other changes that weaken coverage.
For self-insurance, contractors should not treat coverage levels as an internal business decision only; any reduction or change requires prior ACO approval.
Contracting officers and contractors should verify insurance endorsements early, because fixing noncompliant policy language after award can be time-consuming and may leave a compliance gap.
Official Regulatory Text
When the Government requires the contractor to provide insurance coverage, the policies shall contain an endorsement that any cancellation or material change in the coverage adversely affecting the Government’s interest shall not be effective unless the insurer or the contractor gives written notice of cancellation or change as required by the contracting officer. When the coverage is provided by self-insurance, the contractor shall not change or decrease the coverage without the administrative contracting officer’s prior approval (see 28.308 (c)).