FAR 28.303—Insurance against loss of or damage to Government property.
Plain-English Summary
FAR 28.303 addresses insurance for loss of or damage to Government property when the Government requires or approves that coverage. It explains two acceptable ways to satisfy the requirement: a separate, specific insurance policy or coverage built into the contractor’s existing insurance program. The section also requires that the insurance policy disclose the Government’s interest in the property, so the insurer and all parties understand that the property is not solely the contractor’s. In practice, this provision matters whenever Government-furnished property, Government-owned property in the contractor’s possession, or other covered Government property is at risk and the contracting arrangement calls for insurance protection. Its purpose is to make sure the Government’s ownership interest is recognized and protected, while giving contractors flexibility in how they structure the coverage.
Key Rules
Coverage only when required or approved
This section applies when the Government requires or approves insurance for loss of or damage to Government property. It does not itself create a blanket insurance requirement; the need for coverage comes from the contract or the Government’s approval under the related property-liability rules in FAR 45.104.
Two acceptable coverage methods
The required insurance may be provided either through a specific, separate policy or by including the risk in the contractor’s existing insurance policies. The rule gives contractors flexibility, as long as the chosen method actually covers the Government property risk.
Government interest must be disclosed
The insurance policy must disclose the Government’s interest in the property. This ensures the insurer is on notice that the property belongs to, or is otherwise protected for, the Government and helps avoid disputes over ownership, insurable interest, or claim handling.
Policy language must match the risk
The coverage arrangement should be written so the relevant Government property is clearly within the scope of the policy. If the contractor relies on an existing policy, the contractor must confirm that the policy terms, endorsements, and limits are sufficient for the Government property exposure.
Responsibilities
Contracting Officer
Determine whether insurance for Government property is required or approved under the contract and related property-liability rules. Ensure the contract or approval clearly identifies the property and the coverage expectation, and verify that the contractor’s insurance arrangement discloses the Government’s interest.
Contractor
Obtain and maintain the required insurance coverage through either a separate policy or existing policies that include the risk. Make sure the policy language discloses the Government’s interest in the property and that the coverage is adequate for the property at risk.
Insurer
Issue coverage that recognizes the Government’s interest in the insured property when the policy is intended to cover Government property. Process claims and policy administration consistent with the disclosed ownership or insurable interest.
Agency
Apply the property-liability framework in FAR 45.104 when deciding whether insurance is needed and support contract administration to ensure Government property is properly protected.
Practical Implications
Contractors should not assume their standard commercial property policy automatically covers Government-owned or Government-furnished property; the policy must actually include the risk and disclose the Government’s interest.
A common pitfall is failing to add an endorsement or notice identifying the Government’s interest, which can create claim disputes or coverage gaps after a loss.
Contracting officers should confirm that the insurance arrangement is not just nominally in place, but actually aligned with the property type, location, and risk exposure.
If the contractor uses existing policies, it should review exclusions, deductibles, sublimits, and notice requirements carefully, because those terms can leave the Government underprotected.
This section is brief, but it is important because it connects contract property responsibility with insurance administration and helps prevent avoidable losses from becoming uninsured losses.
Official Regulatory Text
When the Government requires or approves insurance to cover loss of or damage to Government property (see 45.104 , Responsibility and liability for Government property), it may be provided by specific insurance policies or by inclusion of the risks in the contractor’s existing policies. The policies shall disclose the Government’s interest in the property.