FAR 47.207-7—Liability and insurance.
Plain-English Summary
FAR 47.207-7 tells the contracting officer how to address liability and insurance in transportation contracts. It covers three core liability topics: the contractor’s responsibility for injury to persons or damage to property other than the freight, the contractor’s responsibility for loss of or damage to the freight itself, and the amount of insurance the contractor must maintain. It also directs the contracting officer to use specific FAR clauses for personal injury/property damage, freight loss or damage for non-household goods, and freight loss or damage for household goods, including the applicable rate per pound for household goods. In addition, it points the contracting officer to the cargo insurance clause when shipments are not under released or declared value rates, and to the vehicular/general public liability insurance clause when legally required insurance is not enough for the contract. In practice, this section is about making sure the solicitation and contract clearly allocate risk, match the right clause to the type of shipment, and require enough insurance to protect the Government’s interests and the public.
Key Rules
Specify liability terms
The contracting officer must state the contractor’s liability for injury to persons or damage to property other than the freight, the contractor’s liability for freight loss or damage, and the amount of insurance the contractor must carry. These terms should be clear in the solicitation and contract so the risk allocation is not left ambiguous.
Default freight liability rule
If the contract does not specify the contractor’s liability for freight loss or damage, the default measure of liability under 49 U.S.C. 11706 applies. This means silence does not eliminate liability; it triggers the statutory standard.
Use personal injury/property clause
The contracting officer must insert FAR 52.247-21, Contractor Liability for Personal Injury and/or Property Damage. This clause addresses liability for harm to people or property other than the freight being transported.
Use freight loss clause for non-household goods
For solicitations and contracts involving freight other than household goods, the contracting officer must insert FAR 52.247-22, Contractor Liability for Loss of and/or Damage to Freight other than Household Goods. This clause governs the contractor’s responsibility for cargo loss or damage.
Use household goods clause
For solicitations and contracts involving household goods, the contracting officer must insert FAR 52.247-23, Contractor Liability for Loss of and/or Damage to Household Goods, and include the rate per pound appropriate to the situation. The rate per pound is part of the liability framework and must fit the specific shipment arrangement.
Cargo insurance when no released value
When freight is not shipped under rates subject to released or declared value, the contracting officer should look to FAR 28.313(a) and use FAR 52.228-9, Cargo Insurance. This ensures cargo coverage is addressed when liability is not otherwise limited by a released or declared value rate structure.
Additional liability insurance when needed
If legally required vehicular liability and/or general public liability insurance is not sufficient for the contract, the contracting officer must consider FAR 28.313(b) and use FAR 52.228-10, Vehicular and General Public Liability Insurance. This allows the Government to require more protection than the minimum legal insurance baseline.
Responsibilities
Contracting Officer
Identify and state the contractor’s liability for personal injury, property damage, and freight loss or damage; determine the required insurance amount; select and insert the correct FAR clauses; include the household goods rate per pound when applicable; and evaluate whether cargo insurance or additional vehicular/general public liability insurance is needed.
Contractor
Accept and comply with the liability terms and insurance requirements set out in the contract; maintain the required insurance coverage; and understand that freight liability may be governed by the contract terms or, if omitted, by the statutory default rule.
Agency
Ensure transportation requirements are structured so the contracting officer can apply the correct liability and insurance provisions; support risk decisions where higher insurance or special liability treatment is needed; and maintain consistency with transportation policy and legal requirements.
Practical Implications
This section is a clause-selection and risk-allocation checkpoint: the wrong clause, or no clause, can leave liability terms unclear and create disputes after loss or damage occurs.
Contracting officers should distinguish carefully between freight other than household goods and household goods, because the required clauses and liability treatment differ.
If the solicitation does not address freight liability, the statutory default under 49 U.S.C. 11706 may apply, which can produce an outcome the parties did not intend.
Insurance requirements should be checked against the actual transportation risk; minimum legally required coverage may be inadequate for some contracts, especially where public exposure or cargo value is high.
For household goods, the per-pound rate must be tailored to the situation; using an incorrect rate can understate or overstate the contractor’s exposure and complicate claims handling.
Official Regulatory Text
(a) The contracting officer shall specify- (1) The contractor’s liability for injury to persons or damage to property other than the freight being transported; (2) The contractor’s liability for loss of and/or damage to the freight being transported; and (3) The amount of insurance the contractor is required to maintain. (b) When the contractor’s liability for loss of and/or damage to the freight being transported is not specified, the usual measure of liability as prescribed in section 11706 of the Interstate Commerce Act ( 49 U.S.C. 11706 ) applies. (c) The contracting officer shall insert the clause at 52.247-21 , Contractor Liability for Personal Injury and/or Property Damage. (d) The contracting officer shall insert the clause at 52.247-22 , Contractor Liability for Loss of and/or Damage to Freight other than Household Goods, in solicitations and contracts for the transportation of freight other than household goods. (e) The contracting officer shall insert the clause at 52.247-23 , Contractor Liability for Loss of and/or Damage to Household Goods, in solicitations and contracts for the transportation of household goods, including the rate per pound appropriate to the situation. (f) When freight is not shipped under rates subject to released or declared value, see 28.313 (a) and the clause at 52.228-9 , Cargo Insurance. (g) When the contracting officer determines that vehicular liability and/or general public liability insurance required by law are not sufficient for a contract, see 28.313 (b) and the clause at 52.228-10 , Vehicular and General Public Liability Insurance.