Insurance and Bonds

Each lease requires the lessee to carry
commercial general liability
 insurance insuring against injury and damage during the lease term. Depending on the use, the lessee may be required to carry additional insurance such as environmental or liquor liability. Specific coverages are described in the liability insurance provisions in the lease. All liability insurance policies must be with companies licensed by the Texas Department of Insurance and must include the following endorsements:
  • TxDOT is to be included as an additional insured
  • a waiver of subrogation in favor of TxDOT
  • a thirty day notice of cancellation to TxDOT if the insurance is canceled.
The lessee must furnish
RES
 with a certificate of insurance providing the required coverage.
If improvements will be constructed under a lease, the lessee may be required to furnish TxDOT with a surety bond as security to ensure that, upon expiration of the lease, the lessee will fulfill its obligation to remove the improvements. The amount of the bond should be for the cost of removing the improvements as estimated by
the District
.
Pursuant to Texas Government Code, Section 2252.909, for leases entered or renewed on or after September 1, 2023, the lessee shall:
  • include in each contract for the construction, alteration, or repair of an improvement to the leased property a condition that the contractor execute a payment bond that conforms to Subchapter I, Chapter 53, of the Texas Property Code;
  • include in each contract for the construction, alteration, or repair of an improvement to the leased property a condition that the contractor execute a performance bond in an amount equal to the amount of the contract for the protection of TxDOT and conditioned on the faithful performance of the contractor's work in accordance with the plans, specifications, and contract documents; and
  • provide a notice of commencement to RES and the District at least 90 days before the construction, alteration, or repair of any improvement to the leased property begins. The notice is to identify the leased property where the work is to be performed, include copies of the performance and payment bonds described in (a) and (b) above, describe the work to be performed, state the total cost of the work to be performed, and include a written acknowledgment signed by the contractor stating that copies of the bonds will be provided to all subcontractors not later than the fifth day after the date a subcontract is executed.
RES will receive and maintain the certificate of insurance and surety bond information that is provided.