Contract Review for Risk Identification
All contracts and agreements create potential risk for the University and should always be reviewed from the perspective of protecting the University and its assets. The LSU Office of Risk Management staff is available to review and draft risk transfer terms in contracts and agreements for the LSU A & M campus. The main areas of concentration for Risk Management's review include: insurance, indemnification, liability, and waivers of risk.
Risk Process Overview
An Overview of the contract review process for contracts and agreements is provided below:
- Requestor initiates a review request with Risk Management.
- Complete an initial review using the Risk Management Contracts and Agreements Checklist prior to submitting.
- Consult Risk Management for all activities or high risk activities such as; activities involving alcohols, charter services, aircraft, watercraft, minors, health consultants, construction projects, engineering, environmental hazards, or information technology.
- Risk Management conducts a review, makes necessary edits, and returns to requestor.
- Risk Management reviews scope of work and agreement and determines whether to use the University standard insurance term or modify based on the risk of activity.
- Risk Management also determines the appropriate contractual risk transfer language based on the scope of work and agreement.
- Requestor returns agreement to the other party and requests Certificate of Insurance to verify required insurance coverage.
- Requestor negotiates terms until a consensus is reached, consulting Risk Management when required. Department can use the Risk Management Contracts and Agreement Checklist to aid with their review.
Request for Review
Submit any agreement for review (submit internship agreements) by completing the form below and attaching the agreement or other supporting documentation. Our office will review most agreements within 3-5 business days. For an expedited request please check the appropriate box.
Third Party Insurance
All outside parties who provide goods, services or construction for the University must a have sufficient insurance to protect the University and its assets against any financial loss. To best protect the University, these standard requirements should be incorporated into most contracts and should not be altered or waived without consulting Risk Management.
- Vendor/Contractor Insurance Guidelines
- Please consult Risk Management for insurance terms for the following services air charter; building, remodeling, and construction services; custodial services; high-risk entertainment/speakers; food services; medical service; transportation services; security, software; etc.
- Certificate of Insurance Checklist
- The Certificate of Insurance Checklist can be used to review and verify insurance coverage.
- LSU Departments can request a Certificate of Insurance.
- What is considered a contract?
According to LSU Procurement, contracts are defined as: A legally binding promise, enforceable by law. An agreement between parties, with binding legal and moral force, usually exchanging goods or services for money or other consideration. All types of agreements, regardless of what they may be called, for the procurement or disposal of supplies, services, or construction. An agreement between a contracting authority and a person or business unit to provide; a good, perform a service, construct a work, or to lease real property for appropriate consideration. Under this definition, purchase orders, memoranda of understanding (MOUs), land access permits, intern and externship agreements and other documents are considered contracts even if they are not commonly referred to as such.
- Can I sign this contract?
Contracting authority for LSU is limited to the Board of Supervisors, the President, and specified individuals or offices; Vice President for Finance and Administration, Chief Procurement Officer, Director of Sponsored Programs, etc. Most employees and departments are not authorized to sign contracts.
- Why is insurance required?
Insurance protects the University and its assets by providing the requestor with the financial means to pay towards any claims or losses that arise under the transaction or service.
- What is a certificate of insurance?
A certificate of insurance is a document issued by insurance company, typically on an ACORD form, that serves as evidence that a requestor has required insurance limits and coverages. The certificate of insurance itself does not grant or extend coverage but is an indication that coverage is in place.
- What does an additional insured status mean?
Additional insured is an endorsement to the requesters insurance policy that provides the University with coverage under the requesters insurance policy if LSU is named in a suit or claim arising out of the requesters action.
- What is indemnification?
Indemnification is a contractual agreement between the University and the requestor which requires the requestor to be financially responsible for any damage caused by the fault of the requestor. This prevents the University from having to pay for any damages caused by the requestor, because state law prohibits the University from assuming the liability of outside parties. Insurance provides the financial means to support the requesters promise to indemnify the University.
- Why do we need an indemnity clause in the contract when we are added as an additional
insured on the liability?
Insurance and indemnification are separate provisions that work together simultaneously. The indemnification language goes beyond the insurance requirements and requires the requestor to be financially responsible for losses and claims when the requestor is at fault. Indemnification requires the requesters financial responsibility even if insurance coverage isn't available. Insurance, including additional insured status, provides the financial means to support the requesters contractual promise of indemnification. Both insurance and indemnification provisions are necessary in each contract.
- Should we sign the requestor terms and conditions?
No. Please do not sign another party's terms and conditions without consulting the appropriate office.
If more assistance is needed please email Ashley McGowan.