FAR 52.247-21—Contractor Liability for Personal Injury and/or Property Damage.
Plain-English Summary
FAR 52.247-21 is a transportation clause that allocates risk for personal injury and property damage arising from a contractor’s performance. It covers four main topics: the contractor’s assumption of responsibility for damage or injury caused by its vehicles, equipment, employees, or agents; the requirement to carry adequate public liability and property damage insurance; the requirement to maintain workers’ compensation and other legally required insurance for its workforce; and the Government’s disclaimer of liability together with the contractor’s duty to indemnify and hold the Government harmless. In practice, the clause is designed to protect the Government when a transportation contractor’s operations create third-party claims or losses. It makes clear that the contractor—not the Government—bears the financial and legal risk associated with operating vehicles or equipment under the contract. For contractors, this means insurance planning and claims management are core contract compliance issues, not just back-office matters. For contracting officers, the clause is a risk-allocation tool that should be used when the acquisition involves transportation or transportation-related services.
Key Rules
Contractor assumes operational risk
The contractor is responsible for all damage or injury to persons or property caused by the use, maintenance, or operation of its vehicles or other equipment, or by the actions of its employees and agents. This is a broad assumption of liability tied directly to performance under the contract.
Maintain liability insurance
At its own expense, the contractor must keep adequate public liability and property damage insurance in force for the life of the contract. The insurance must protect the contractor against claims for injury or damage arising from its operations.
Carry workers’ compensation coverage
The contractor must maintain workers’ compensation and any other insurance required by law for its own employees and agents. This requirement applies regardless of whether the contract specifically mentions a particular state or local insurance regime.
Government disclaims liability
The Government is not liable for injury or damage caused by the contractor’s vehicles, equipment, employees, or agents while performing the contract. The clause expressly places those losses outside Government responsibility.
Indemnify and hold harmless
The contractor must indemnify and save the Government harmless against claims for damage or injury arising from the contractor’s covered operations. This reinforces the Government’s protection if third parties assert claims connected to the contractor’s performance.
Responsibilities
Contracting Officer
Include the clause in solicitations and contracts for transportation or transportation-related services when prescribed by FAR 47.207-7(c). Ensure the contract structure reflects the intended risk allocation and that any required insurance language is consistent with the acquisition.
Contractor
Accept responsibility for damage or injury caused by its vehicles, equipment, employees, or agents; obtain and maintain adequate public liability and property damage insurance; maintain workers’ compensation and other legally required insurance; and indemnify the Government against covered claims.
Government
Rely on the clause to avoid liability for contractor-caused injury or property damage in the performance of the contract and to seek indemnification when claims arise from the contractor’s covered operations.
Contractor’s Employees and Agents
Operate vehicles and equipment and perform contract work in a manner that does not create avoidable injury or property damage; their actions are attributed to the contractor for purposes of liability under the clause.
Practical Implications
This clause makes insurance a contract compliance issue, so contractors should verify coverage limits, exclusions, and endorsements before performance begins and keep proof of coverage current.
A common pitfall is assuming general commercial insurance is automatically sufficient; the contractor must ensure the policy actually covers the contract’s transportation risks and any required workers’ compensation obligations.
Because the Government disclaims liability, contractors should not expect the agency to absorb losses caused by accidents, vehicle damage, cargo-related incidents, or injuries tied to their operations.
Contractors should review subcontractor and agent arrangements carefully, since liability can extend to actions of employees and agents performing the work.
Contracting officers should confirm the clause is used only where prescribed and should coordinate with legal and risk personnel if the acquisition involves unusual transportation hazards or insurance concerns.
Official Regulatory Text
As prescribed in 47.207-7 (c) , insert the following clause in solicitations and contracts for transportation or for transportation-related services: Contractor Liability for Personal Injury and/or Property Damage (Apr 1984) (a) The Contractor assumes responsibility for all damage or injury to persons or property occasioned through the use, maintenance, and operation of the Contractor’s vehicles or other equipment by, or the action of, the Contractor or the Contractor’s employees and agents. (b) The Contractor, at the Contractor’s expense, shall maintain adequate public liability and property damage insurance during the continuance of this contract, insuring the Contractor against all claims for injury or damage. (c) The Contractor shall maintain Workers’ Compensation and other legally required insurance with respect to the Contractor’s own employees and agents. (d) The Government shall in no event be liable or responsible for damage or injury to any person or property occasioned through the use, maintenance, or operation of any vehicle or other equipment by, or the action of, the Contractor or the Contractor’s employees and agents in performing under this contract, and the Government shall be indemnified and saved harmless against claims for damage or injury in such cases. (End of clause)