FAR 52.228-9—Cargo Insurance.
Plain-English Summary
FAR 52.228-9, Cargo Insurance, is a contract clause used when the Government wants the contractor to carry specific cargo insurance for property being transported under the contract. It addresses the contractor’s duty to obtain and maintain insurance at its own expense, the required dollar amounts per vehicle and for the shipment as a whole, and the need for the insurance to be written by companies acceptable to the contracting agency. The clause also requires the contractor to provide proof of acceptable coverage before starting performance and to ensure the policy contains mandatory notice provisions for cancellation, reduction in coverage, and renewal. In practice, this clause protects the Government’s property interests during transit by shifting the risk of loss to an insured carrier arrangement and by giving the agency advance warning if coverage changes. It is especially important in transportation, logistics, and shipment contracts where Government-owned or Government-controlled property is exposed to loss, damage, or theft while in transit.
Key Rules
Contractor pays for coverage
The contractor must provide and maintain cargo insurance at its own expense for the life of the contract. This is an affirmative performance requirement, not a reimbursable optional cost unless the contract otherwise allows it.
Specified coverage amounts
The clause requires two separate dollar amounts to be filled in: one amount per vehicle to cover the value of property on each vehicle, and one amount to cover the total value of the property in the shipment. The contracting activity must set these amounts to match the risk and value involved.
Agency-approved insurers
Insurance must be written by companies acceptable to the contracting agency. This gives the agency discretion to reject carriers or policies that do not meet its standards, financial requirements, or other risk-management criteria.
Agency-required policy terms
The policy must include whatever terms and conditions the contracting agency requires. This allows the agency to impose additional protections beyond basic coverage, so the contractor must review the solicitation and contract carefully for any special insurance requirements.
Proof before performance
The contractor must provide evidence of acceptable cargo insurance to the contracting agency before beginning operations under the contract. Performance should not start until the agency has accepted the proof of coverage.
Advance notice of changes
Each policy must require the insurer to give written notice to the agency 30 days before any reduction in coverage or cancellation. This protects the Government by giving it time to react if the policy is about to lapse or be narrowed.
Renewal evidence required
The policy must also require evidence of any renewal policy to be sent at least 15 days before the current policy expires. This helps the agency confirm continuous coverage and avoid gaps in protection.
Responsibilities
Contracting Officer / Contracting Agency
Insert the required insurance amounts, identify the agency name and address, determine which insurers are acceptable, and specify any additional policy terms and conditions. The contracting officer must also review and accept evidence of coverage before the contractor begins operations.
Contractor
Obtain and maintain cargo insurance for the duration of the contract, pay for the coverage, ensure the policy meets all clause requirements, submit proof of acceptable insurance before performance starts, and keep coverage current throughout performance.
Insurer / Insurance Company
Issue a policy that meets the clause requirements, provide written notice to the agency 30 days before cancellation or reduction, and provide evidence of renewal at least 15 days before expiration of the current policy.
Agency / Government Customer
Define acceptable insurers and any special policy conditions, receive and evaluate proof of insurance, and monitor notice of cancellation, reduction, or renewal to ensure continuous protection of the shipment.
Practical Implications
This clause is a gatekeeper: if the contractor cannot show acceptable cargo insurance before starting, performance should not begin. Contractors should build time into mobilization to secure and document coverage.
The dollar amounts are not boilerplate; they must be tailored to the shipment risk and value. A mismatch between the contract’s required coverage and the actual cargo value can leave the contractor noncompliant or underinsured.
A policy that lacks the exact notice language can fail to satisfy the clause even if the coverage amount is adequate. Contractors should have their broker or insurer review the clause text before binding coverage.
The agency’s approval of insurers matters. A contractor should not assume any commercially available policy will be accepted; the contracting office may reject a carrier that does not meet agency standards.
Renewal tracking is critical because the clause requires advance evidence of renewal, not just a promise to renew. Missing the renewal deadline can create a coverage gap and a contract compliance issue.
Official Regulatory Text
As prescribed in 28.313 (a) , insert the following clause: Cargo Insurance (May 1999) (a) The Contractor, at the Contractor’s expense, shall provide and maintain, during the continuance of this contract, cargo insurance of $ ______ per vehicle to cover the value of property on each vehicle and of $ _______ to cover the total value of the property in the shipment. (b) All insurance shall be written on companies acceptable to ____________ [ insert name of contracting agency ] , and policies shall include such terms and conditions as required by __________ [ insert name of contracting agency ] . The Contractor shall provide evidence of acceptable cargo insurance to ____________ [ insert name of contracting agency ] before commencing operations under this contract. (c) Each cargo insurance policy shall include the following statement: "It is a condition of this policy that the Company shall furnish- (1) Written notice to __________ [ insert name and address of contracting agency ] , 30 days in advance of the effective date of any reduction in, or cancellation of, this policy; and (2) Evidence of any renewal policy to the address specified in paragraph (1) of this statement, not less than 15 days prior to the expiration of any current policy on file with ____________ [ insert name of contracting agency ] ." (End of clause)