Get Help With Insurance Buying and Renewals.
Get help buying coverage and managing renewals, with less paperwork for your team. Start with a free consultation.
Insurance for Federal Government Contractors
Federal contracting does not give every business one insurance schedule. FAR examples depend on contract type, work, and incorporated clauses: for instance, a particular fixed-price contract involving work at a Government installation may include FAR 52.228-5, with exceptions and contract-specific amounts. Read the solicitation, final contract, and Schedule with your broker, then compare the required terms with the proposed forms and endorsements.[1][2][3]
Which Insurance Should You Consider?
Consider general liability, workers’ compensation, commercial auto, professional errors and omissions (E&O), cyber liability, and surety bonds. Start with the coverages tied to your day-to-day operations, then use the situations and buying questions below to compare your options.
General liability
The solicitation or contract includes FAR 52.228-7, FAR 52.228-5, or another clause that lists general liability or requires a stated limit for your work.
FAR 52.228-7 names general liability for bodily injury when that clause is included; FAR 52.228-5 instead points to the insurance types and minimum amounts stated in the Schedule or elsewhere in the contract. Neither clause creates one limit for every federal award.[4][3][1]
Ask Before Buying
Which clause is included, what bodily-injury or property-damage terms and limits are in the Schedule, and which policy form and endorsements meet the actual contract language for the named entity and operations?
Workers’ compensation
A federal clause, state work location, or contract schedule calls for workers compensation or employers liability, or your workforce spans states or contract sites.
FAR 52.228-7 lists workers compensation and employers liability when the clause applies. FAR does not establish a universal federal insurance rule for every fixed-price contractor; disclose the actual locations and duties and check each applicable state requirement separately.[4][5][8]
Ask Before Buying
Which work states, employee duties, contract periods, workers-compensation terms, and employers-liability limits appear in the proposal and contract? Does the clause apply to this contract type and award?
Commercial auto
Your contract work uses owned, leased, rented, or employee vehicles, or the solicitation includes an auto-liability clause or schedule requirement.
FAR 52.228-7 names automobile liability for bodily injury and property damage when included. Separately, FAR 28.307-2 contains contract-context auto provisions; the actual contract and work facts determine which terms to check.[4][6][8]
Ask Before Buying
Which vehicles, drivers, states, and contract uses are covered by the proposed policy? What auto-liability limits, physical-damage terms, and endorsements are stated in the applicable clause or Schedule?
Professional errors and omissions (E&O)
You provide consulting, software, engineering, analytics, training, or another service whose deliverable or performance is material to the customer’s work.
Describe the professional services and deliverables in the quote submission. NAIC and SBA explain professional liability as a distinct general category for service work, but the reviewed FAR provisions do not establish a universal federal professional E&O requirement or show that a particular form covers your services.[8][9]
Ask Before Buying
Which services, deliverables, contract obligations, and financial-loss allegations fit the insurer’s professional-services definition? Is technology E&O treated separately, and what exclusions, limits, and retentions apply?
Cyber liability
Your federal work stores, processes, or accesses agency, employee, customer, or other sensitive information, or depends on a cloud, software, or subcontractor service.
Inventory data, system access, service providers, customer contract duties, and interruption scenarios before asking about cyber insurance. FTC and NAIC guidance supplies general buyer questions; it does not establish that an award requires cyber coverage or that a policy covers agency data, cyber events, or outages.[10][8]
Ask Before Buying
Does the contract impose data-security or incident terms, and which proposed policy definitions address vendor-held data, response costs, third-party claims, restoration, interruption, and regulatory costs? What limits, exclusions, and sublimits apply?
Surety bonds
A federal solicitation includes a bid guarantee provision or requires a performance bond or performance-and-payment bond.
FAR 28.101-1 says a contracting officer may not require a bid guarantee unless a performance bond or performance-and-payment bond is also required; a bid guarantee is generally required when one of those bonds is required, subject to the rule’s waiver. A surety bond is a financial guarantee, not liability or property insurance.[7]
Ask Before Buying
Does the solicitation require a bid guarantee, a performance bond, or a performance-and-payment bond? What acceptable guarantee form, amount, and delivery deadline does it specify? Ask the surety what information it needs for the required bond.
Read the Solicitation and Award
Start with the solicitation, signed contract, and Schedule. Record each insurance clause, stated kind and amount of insurance, required period, proof, notice, and requested endorsement. For fixed-price contracts, FAR 28.306 lists circumstances in which an agency may specify insurance; do not treat an example as a requirement for another award.[1][3]
For work at a Government installation, check whether the facts fit FAR 28.310: it addresses contemplated fixed-price contracts above the simplified acquisition threshold that require installation work, with stated exceptions for small amounts of work or work entirely outside the United States and its outlying areas. Confirm the current threshold and clause text against the actual award.[2]
Map Work and Subcontracts
Give your broker a list of contracting entities, sites, work activities, vehicles, staff locations, data, and subcontractors. If FAR 52.228-5 is included, its text requires the contract-specified insurance during performance and clause flow-down to subcontracts that require work on the Government installation; it also addresses notice before work begins and retaining subcontractor proof.[3]
If FAR 52.228-7 appears, read the full clause and its prescription. It lists certain liability insurance for covered contract circumstances and leaves form, amount, period, and insurer approval to the contracting officer. Its other paragraphs address cost reimbursement and claims handling; do not assume they promise reimbursement for every premium or loss.[4][5]
Separate Insurance from Bid Security
Keep policy evidence and surety bonds on separate checklists. If a solicitation requires a bid guarantee, performance bond, or performance-and-payment bond, record the required instrument and its stated form, amount, and deadline. FAR 28.101-1 links a bid guarantee to a required performance bond or performance-and-payment bond, subject to a waiver; it does not mean every federal bid needs one.[7]
Match the contract’s exact insurance wording with the insurer’s proposed forms and endorsements for the named entity and operation. Ask the broker to identify any requested term the proposal does not show, and resolve that gap before relying on the quote.[3][4]
Providers to Compare by Coverage
General liability
Alliance Risk
Spot Score
Review Score
Not enough ratings
Amelia Risk
Spot Score
Review Score
2.0/ 10
Workers’ compensation
Alliance Risk
Spot Score
Review Score
Not enough ratings
Amelia Risk
Spot Score
Review Score
2.0/ 10
Commercial auto
Alliance Risk
Spot Score
Review Score
Not enough ratings
Amelia Risk
Spot Score
Review Score
2.0/ 10Professional errors and omissions (E&O)
Alliance Risk
Spot Score
Review Score
Not enough ratings
Amelia Risk
Spot Score
Review Score
2.0/ 10
Cyber liability
Alliance Risk
Spot Score
Review Score
Not enough ratings
Amelia Risk
Spot Score
Review Score
2.0/ 10
Common Questions
Does every federal contractor have the same insurance requirements?
No single fixed-price schedule applies to every federal award. FAR 28.306 says agencies are not ordinarily concerned with a fixed-price contractor’s insurance, but may specify it in special circumstances; FAR 28.310 prescribes an installation-work clause for a narrower set of contracts, with exceptions.[1][2]
Read the Full AnswerIs a bid guarantee or surety bond the same as insurance?
No. FAR 28.101-1 addresses a bid guarantee and its relationship to a required performance bond or performance-and-payment bond. These surety instruments are separate from liability, auto, workers-compensation, cyber, or professional-liability insurance.[7][8]
Read the Full AnswerSources and Further Reading
- FAR 28.306 — Insurance under fixed-price contracts — Federal Acquisition Regulation, Acquisition.gov (U.S. General Services Administration). FAR 28.306(a)-(b); current display FAC 2026-01, effective 2026-03-13; accessed directly 2026-09-28
Conditional federal guidance on when agencies may specify insurance under fixed-price contracts.
- FAR 28.310 — Contract clause for work on a Government installation — Federal Acquisition Regulation, Acquisition.gov (U.S. General Services Administration). FAR 28.310(a)-(b); current display FAC 2026-01, effective 2026-03-13; accessed directly 2026-09-28
The specific trigger and exceptions for FAR 52.228-5.
- FAR 52.228-5 — Insurance—Work on a Government Installation — Federal Acquisition Regulation, Acquisition.gov (U.S. General Services Administration). FAR 52.228-5(a)-(c), clause dated January 1997; current display FAC 2026-01; accessed directly 2026-09-28
Contract-specific insurance, notice, and subcontract flow-down language when this clause is included.
- FAR 52.228-7 — Insurance—Liability to Third Persons — Federal Acquisition Regulation, Acquisition.gov (U.S. General Services Administration). FAR 52.228-7(a)-(g), clause dated March 1996; current display FAC 2026-01; accessed directly 2026-09-28
Clause terms for certain cost-reimbursement circumstances; read alongside the prescription and contract.
- FAR 28.311-1 — Contract clause — Federal Acquisition Regulation, Acquisition.gov (U.S. General Services Administration). FAR 28.311-1; current display FAC 2026-01, effective 2026-03-13; accessed directly 2026-09-28
- FAR 28.307-2 — Liability — Federal Acquisition Regulation, Acquisition.gov (U.S. General Services Administration). FAR 28.307-2(a)-(e); current display FAC 2026-01, effective 2026-03-13; accessed directly 2026-09-28
- FAR 28.101-1 — Policy on use — Federal Acquisition Regulation, Acquisition.gov (U.S. General Services Administration). FAR 28.101-1(a)-(c); current display FAC 2026-01, effective 2026-03-13; accessed directly 2026-09-28
Conditional federal bid-guarantee policy and its bond relationship, exceptions, and form distinctions.
- Small Business — National Association of Insurance Commissioners (NAIC). FAQ: BOP (lines 20-24); CGL and exclusions (29-54); other liability (55-63); property (102-126); work-from-home (269-283)
General descriptions of commercial insurance categories and their policy-dependent scope.
- Launch your business — U.S. Small Business Administration. Get business insurance, lines 536-566: common coverage types and buying steps
- Cybersecurity for Small Business — Federal Trade Commission. Supplier-risk and insurance guidance (lines 51-59); vendor breach response (170-173); cyber insurance section (175 onward)
General vendor-risk, contract, and cyber insurance questions for small businesses; not a federal contract requirement.
Spot, a product of Tools for Enlightenment, publishes this guide and works in the commercial insurance market. This is general buyer education; actual contract clauses, policy wording, operations, and jurisdiction determine what applies. This guide addresses federal contracting examples only, not state or local procurement or public-entity insurance.
Updated 2026-09-28. Editorial Policy
Get Help With Insurance Buying and Renewals.
Get help buying coverage and managing renewals, with less paperwork for your team. Start with a free consultation.