For most transactional, routine and complex contracts, the Commonwealth expects the supplier to propose and maintain a prudent level and type(s) of insurance appropriate to the risks and complexities of the goods or services being procured. For strategic contracts, the Commonwealth may require the supplier to obtain and maintain a particular level and/or type of insurance, or may allow the supplier to propose and maintain a prudent level and type(s) of insurance appropriate to the risks and complexities of the goods or services being procured.
The contract provisions usually provide the Commonwealth with the right to seek confirmation of the type and level of insurance held by the supplier, and to seek evidence that the insurance is being maintained. The contract provisions may also specify a period for which the insurance is to be maintained by the supplier, which may sometimes extend past the completion of the contract (eg professional indemnity insurance, defects insurance).
When managing a contract, it is vital that you are familiar with the specific provisions in your contract that relate to the insurance to be maintained by the supplier.
You should establish systems and processes to seek evidence that the agreed level and type(s) of insurance has been obtained by the supplier, and that this is maintained over the period specified in the contract.