SECTION 170:15-15-1. Indemnification and insurance

(a)   The Contractor must have adequate insurance coverage to indemnify the state, its political subdivisions, and its officers, agents, and employees for expenses or losses incurred in intervening in the operation of the private prison, and to indemnify and hold harmless the state, its political subdivisions, its officers and employees for acts resulting in liability by inmates, officers, and employees of the private contractor or stockholders.

(b)   The private contractor shall be responsible for all claims arising from the provisions of the individual contracts. Claims shall be defined as:

(1)   Any breach or default by the owner/operator in performance of the contract.

(2)   Claims or losses for services rendered by the owner/operator.

(3)   Claims or losses to any person injured or property damage.

(4)   Claims or losses by any person or firm injured or damaged by the owner/operator.

(5)   Failure by the owner/operator, agents, or employees to observe the Constitution or laws of the United States and the State of Oklahoma.

(c)   The owner/operator shall continuously maintain and pay for such insurance and shall protect the owner/operator, the state, the department and the board, officer, agents and employees in accordance with paragraph D.

(d)   Prior to service commencement date and upon annual renewal the owner/operator shall provide insurance policies and endorsements to the private prison administration unit evidencing insurance coverage for review. The private prison administration unit will forward documentation to the Risk Management administration for evaluation. Insurance coverage shall cover the following types and amounts:

(1)   Workmen's compensation insurance approved by the State Worker's Compensation Board with coverage limit of $1,000,000 for each accident or disease per employee with a $5,000,000 annual aggregate.

(2)   Comprehensive General Liability, Civil Rights Violation Liability and Medical Malpractice/Professional Liability coverage in an amount not less than $1,000,000 for each occurrence with an annual aggregate of $2,000,000 with a total umbrella of $5,000,000.

(3)   Automobile and other vehicle liability insurance in an amount not less than $1,000,000 per accident or occurrence.

(4)   Business interruption insurance in the amount of $7,000,000.

(5)   Fire, with uniform standard extended coverage, endorsements including damage, destruction hazard insurance and vandalism and malicious mischief, riot and insurrections insurance in a coverage amount equal to the replacement value of the facility.

(6)   All policies and certificates of insurance shall not be canceled, reduced or allowed to lapse unless and until the State has received at least ten days written notice.

(e)   The State shall have the right, but not the obligation, to advance money to prevent the required insurance from lapsing for nonpayment of premiums. If the State advances such amount, the owner/operator shall be obligated to repay the State the amount of any advance plus interest at the maximum legal rate. The State shall set off and deduct such amount from any amounts owed to the owner/operator. No election to advance money to pay insurance premiums shall be deemed to cure default by the owner/operator of its obligation to provide insurance.

(f)   At least thirty days prior to each policy anniversary date, the owner/operator shall provide the private prison administration unit with renewal information and any changes in coverage.

[Source: Added at 22 Ok Reg 2350, eff 7-11-05]