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work on County property, contractors who are in possession of valuable County property,
contractors who are operating motor vehicles in the performance of their contract duties, and
contractors who are handling hazardous waste. It will be the obligation of each department to
research and include in the contracts the appropriate insurance requirements for each applicable
circumstance.
(4) Bid and Performance Bonds: Bid and performance bonds will be required from vendors in those
situations where they are required by statute or ordinance or when less than faithful performance
of the contract would create considerable loss to the County. In requiring bid and performance
bonds, consideration will be given to the impact these requirements will have on the ability of small
businesses to participate in the contracting process. Bond information should be submitted to
CEO/Risk Management as early in the contract development process as possible. Submission of
the bond information to CEO/Risk Management allows the confirmation that the bond issuer meets
financial, rating, licensing and other legal criteria.

(5) Liquidated Damages: Liquidated damages clauses are enforceable if: (1) damages are difficult to
ascertain or estimate at the time the contract is formed; and (2) the amount is a reasonable forecast
of compensatory damages in the case of breach. Specifically, if the liquidated damages amount
significantly exceeds the amount of damages prospectively probable, the liquidated damages clause
may not be enforceable. Thus, liquidated damage clauses may be included in service contracts when
the County could suffer financial loss due to delays in performance. Consistent with legal
requirements, the amount of damages listed in the contract must be a “reasonable forecast” of the
County’s actual damage.

§2.3-103 Risk Identification

(1) Examples of significant risk activities are: transportation of hazardous materials, tunneling and
excavation, new construction of buildings over four stories and/or any activity that potentially could
cause pollution to the environment. For additional information refer to the Insurance Requirements
and Reference Manual maintained on the County Risk Management website -
http://www.ocgov.com/gov/risk

§2.3-104 Responsibility

(1) The County Risk Manager or authorized designee and the Office of County Counsel collaboratively
review bonds, limitation of liability provisions and indemnification provisions. The County Risk
Manager or authorized designee is responsible for assessing and determining the appropriate levels
of insurance.

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