Contractual Liability Program

For direction on contracting see UW–Madison Purchasing.

Once a contract is drafted or presented, Risk Management is available to work as needed with the respective signature authority or designee to provide review on contractual issues related to risk management such as insurance coverage for employees and agents, vendor insurance requirements, indemnification issues, workers compensation coverages, certificates of insurance, contractual liability program and other related issues.

Please review the Vice Chancellor of Finance and Administration Signature Authority Memo (PDF) for information on who is authorized to sign contracts on behalf of the University.

Contractual liability is any liability or responsibility for loss which is assumed by the University under a contract which would normally not be the responsibility of the University had the contract not existed. Certain contractual liability clauses demanded by external parties may be in conflict with our insurance program structure and/or allowance by WI State Statutes. Such transfers of liability most often come in the form of and indemnity, hold harmless, and limits of liability requests.

WI State Statutes prohibit the University from signing any contracts which contain promises of indemnification for losses that the University is not responsible for. This posture is necessary because the State, as a representative body of its tax-paying public, cannot make promises against, or be held responsible for, future unknown debts. Hold harmless and limits of liability must be scrutinized in their impact on the campus. Therefore, any time a contract is used which contains contractual language that is not within the scope of State Statutes, or places campus in unnecessarily adverse position, attempts must be made to negotiate the conflicting language out of the contract or add allowable compromise language that meets our requirements (See UWSA’s Hold Harmless and Indemnity Agreements page for further details). If unsuccessful in properly adjusting the conflicting language, contractual liability insurance may be required to cover the exposure.

To obtain insurance protection for those contracts which are incompatible with statutory requirements and our self-funded insurance programs contact UW–Madison Risk Management to discuss the situation. Risk Management will need to review copy of the completed contract. If contractual coverage is determined necessary Risk Management will send in complete contract for review by our insurance broker who will provide annual premium quote within three weeks. The annual premium is the responsibility of requesting UW-Madison to pay and a department funding string shall be sent to Risk Management.

Details of this program are found at UWSA’s Contractual Liability Program website. Premiums typically run $1800 per year/per contract and are the responsibility of the UW–Madison contracting unit/department.