Understanding DFARS Insurance Clause Requirements is essential for contractors working with the Department of Defense.
Many contractors mistakenly assume their standard commercial insurance package automatically satisfies any DFARS insurance clause in a DoD contract. That assumption tends to surface at the worst possible moment, when a contracting officer flags a certificate of insurance as non-compliant shortly before a proposal deadline. The Defense Federal Acquisition Regulation Supplement insurance framework is not one single rule. It’s a set of DoD-specific clauses layered on top of the FAR baseline, each triggered by contract type, place of performance, and work category. Miss the applicable clause and you risk award delays, CO compliance notices, or potential disqualification. This article breaks down exactly which DFARS insurance clauses apply, what coverage they mandate, and how to document compliance in a way contracting officers will accept. In this post, I will detail the DFARS Insurance Clause Requirements.
What the DFARS insurance framework actually covers
FAR Part 28 sets the federal baseline for bonds and insurance on government contracts. DFARS Part 228 supplements that baseline with DoD-specific rules that apply when work involves unique risk categories: overseas performance, aircraft operations, vessel work, or country-specific requirements. The two frameworks operate simultaneously, so a contractor on a DoD contract must often satisfy both sets of rules at the same time.
One point worth understanding early: the DFARS insurance framework addresses risk categories that commercial general liability policies weren’t designed to cover, specifically, war-hazard losses, aircraft ground and flight risk, and longshore and harbor workers’ compensation (per DFARS 252.228-7001, DFARS 252.247-7007, and related clauses under DFARS Part 228). A contractor can hold a valid, active general liability policy and still be non-compliant under a DFARS insurance clause that requires a separate coverage type entirely.
Contracting officers don’t passively accept certificates of insurance. Under DFARS clauses such as 252.228-7001 and 252.247-7007, the CO is required to review submitted documentation and confirm the commercial insurance actually provides the coverage the applicable clause demands, often described in clause language as “satisfactory evidence” of coverage. That makes documentation quality as important as the coverage itself. An accurate, complete submission tells the CO exactly what they need to see. An incomplete one creates a compliance gap that can delay an award or trigger a notice after contract execution.
Which DFARS insurance clauses trigger requirements
The following clauses represent the core of the DFARS insurance framework. Understanding which ones appear in a solicitation, and what each one actually requires, is the first step toward a compliant submission.
DFARS 252.247-7007, Stevedoring
DFARS 252.247-7007 applies to contracts involving stevedoring services. It requires the contractor to maintain workers’ compensation, employer’s liability, longshore and harbor workers’ compensation, bodily injury liability, and property damage liability throughout contract performance. This is one of the few DFARS insurance clauses with explicit minimum dollar thresholds stated directly in the clause text: $300,000 per occurrence for both bodily injury and property damage liability, removing any ambiguity about what the CO will expect to see on your documentation.
DFARS 252.217-7012, Vessel and salvage work
DFARS 252.217-7012 applies to certain salvage, transportation, and vessel-related work. It requires the contractor to obtain casualty, accident, and liability insurance approved by the contracting officer, along with workers’ compensation for employees engaged on the work. Unlike 252.247-7007, this clause states no fixed dollar minimum. The CO approves the amounts based on the scope of work, which means the conversation with the CO matters more than the policy itself during the pre-award phase. This clause also contains explicit mandatory flowdown language, any prime holding a contract that includes it must ensure subcontractors performing covered work carry the required insurance.
DFARS 252.228-7001, Ground and Flight Risk
DFARS 252.228-7001 is the Ground and Flight Risk clause. It applies to contracts involving aircraft acquisition, development, production, modification, maintenance, repair, or overhaul. This clause defines how the risk of loss or damage to covered aircraft is allocated between the contractor and the Government. Under it, the Government assumes the risk of physical loss or damage to the covered aircraft itself, which directly affects what insurance the contractor is expected to carry and, critically, what should not be priced into the proposal. Per clause requirements and related DoD cost principles, contractors are specifically prohibited from pricing premiums or reserves for risks the Government has assumed.
Defense Base Act and overseas performance
Contracts performed outside the United States trigger Defense Base Act coverage requirements and war-hazard protection under DFARS Part 228. These aren’t optional add-ons. They’re statutory obligations tied to overseas performance on federal contracts, and they apply regardless of the employee’s nationality. DBA coverage replaces domestic workers’ compensation for those employees and carries different benefit structures and underwriting requirements than a standard workers’ comp policy.
DFARS 252.228-7006, Spain-specific requirements
DFARS 252.228-7006 applies to contractors performing work in Spain. It requires a written representation that the contractor has obtained insurance in specified minimum amounts for work performed there. It’s narrow in scope but a practical illustration of how country-specific requirements exist within the DFARS framework alongside the broader risk categories.
Minimum coverage thresholds: what the clauses actually require
DFARS 252.247-7007 is the clearest clause in the framework. As stated in the clause text, it requires $300,000 per occurrence for both bodily injury liability and property damage liability, a fixed floor with no ambiguity. DFARS 252.217-7012 sets no fixed amount. Limits under that clause are CO-approved, meaning the contractor needs to engage the CO early in the process to understand what coverage amounts are expected before finalizing the program.
Workers’ compensation requirements appear across multiple DFARS clauses, and the applicable law depends on where and how the work is performed. For domestic work on government installations, state workers’ compensation typically applies. For overseas performance, DBA coverage replaces it entirely and carries different statutory benefit structures. Contractors who treat DBA as a simple substitution for their domestic workers’ comp policy often find the underwriting and compliance requirements are significantly more involved than anticipated.
For aviation-related contracts, the Government’s assumption of risk under 252.228-7001 creates a pricing implication that runs in both directions. Underinsuring creates a compliance problem. Pricing in premiums or reserves for risks the Government has already assumed creates a separate cost allowability problem in the proposal, one that CO price reasonableness reviews or audit findings can surface after award. Understanding exactly which risks remain with the contractor versus which the Government has assumed is the only way to price and insure correctly under this clause.
How FAR and DFARS insurance clauses interact in a DoD contract
A DoD contract can include both FAR 52.228-series clauses and DFARS 252.228-series clauses at the same time. In that scenario, the contractor must satisfy both unless the DFARS clause expressly modifies the FAR rule or the CO grants a specific waiver where the regulation permits one. The DFARS clause doesn’t override FAR, it adds to it. Checking only one set of clauses in a contract is a reliable way to miss a compliance obligation.
The government self-insurance concept matters most under the Ground and Flight Risk clause. DoD treats the Government as self-insuring when a contract clause explicitly allocates the risk of loss to the Government rather than requiring the contractor to purchase coverage against it. That allocation determines what the contractor must buy, what gets priced into a proposal, and what documentation the CO expects to see in the award file. Getting that allocation right requires reading the specific clause carefully, not applying a general assumption about how DoD contracts work.
What a compliant certificate of insurance looks like under DFARS
An ACORD certificate alone is rarely sufficient for DFARS compliance. The documentation package typically requires the COI plus policy declarations pages, endorsement forms proving required contract language, and in some cases a letter from the insurer confirming specific policy details. The insured name must match the contractor named in the contract. Effective dates must show coverage is in force before performance begins. These aren’t bureaucratic preferences, they’re the documentation standards COs use to verify clause compliance.
The endorsements contracting officers flag most often include missing additional insured designations for the U.S. Government, cancellation notice provisions that don’t align with the contract requirement, and policies that exclude the specific risk category the clause addresses. Those gaps aren’t minor. They’re the kinds of documentation deficiencies that delay contract awards or generate compliance notices after award, when you’re already in performance and a CO audit surfaces the issue.
A complete documentation package for a DFARS-covered contract generally includes an ACORD-style certificate, the policy declarations page, endorsement pages showing required contract language, and a signed insurer certification when requested. If your broker isn’t familiar with what “primary and noncontributory” or “additional insured for the U.S. Government” means in a DoD context, assembling this package becomes a time-consuming education exercise rather than a straightforward documentation task. Risk Reconnaissance LLC builds endorsement-ready COI packages aligned to specific clauses in each solicitation as part of the pre-proposal workflow, before a CO sends anything back.
Flowing DFARS insurance requirements to your subcontractors
Not every DFARS insurance clause requires flowdown to subcontractors. DFARS 252.244-7000 establishes that for commercial-item subcontracts, DFARS clauses generally don’t flow down unless the specific clause itself mandates it. The prime contractor’s obligation is to check each applicable insurance clause for explicit flowdown language. Phrases like “insert the substance of this clause in subcontracts” are the signal that the requirement passes through. DFARS 252.217-7012 contains exactly this kind of mandatory flowdown language, so any prime holding a contract with that clause must ensure subcontractors performing covered work carry the required insurance.
Effective subcontract clause language should specify that the subcontractor must obtain and maintain all required coverages before commencing work, furnish evidence of coverage to the prime upon request, and notify the prime immediately of any cancellation or material policy change. If the applicable DFARS clause requires verbatim inclusion in subcontracts, only substituting party names is permitted. Paraphrasing isn’t sufficient when the clause demands exact inclusion, a CO who reviews your subcontract file and finds a loose paraphrase where verbatim text was required has grounds to flag the prime for non-compliance.
Record-keeping is the area primes most often underestimate. Primes are responsible for retaining proof of subcontractor insurance and, in some cases, providing it to the CO on demand. The right time to collect COIs from subcontractors is before performance begins, not during it. A consistent pre-performance checklist for sub insurance documentation protects the prime from being caught without evidence when a CO or audit request arrives unexpectedly.
Before your next proposal deadline
DFARS insurance clause requirements aren’t complicated once you know which ones apply to your contract type and work category. The real risk is assuming a standard commercial package covers everything, or waiting until after award to sort out documentation. Review the specific DFARS clauses referenced in each contract vehicle. Confirm your coverage types and limits match what each clause requires. Prepare a complete documentation package, and address flowdown obligations before your subcontractors start work.
The pre-proposal checklist is straightforward:
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- Identify which DFARS Part 228 clauses appear in the solicitation
- Confirm coverage types and minimum limits for each applicable clause
- Verify that endorsements reflect any required additional insured or cancellation notice language
- Prepare a COI package that includes declarations pages and endorsement forms
- Document your flowdown obligations in the subcontract before any sub begins performance
If your current broker doesn’t immediately recognize terms like 252.247-7007 or DBA flowdown, that’s a gap worth closing before your next proposal deadline, not after a CO sends back your COI. The difference between a compliant DFARS insurance clause submission and a flagged one is often knowing the clause language before you’re on the clock. Risk Reconnaissance LLC specializes in exactly this kind of GovCon-specific compliance work, helping defense contractors get documentation right at the proposal stage rather than correcting it under pressure after award.