PA ID# 000-U2DMO-00; Guam Department of Education
PW ID# 1001; Southern High School A/C System
Citation:FEMA-1426-DR-GU Guam Department of Education, Southern High School A/CSystem, Project Worksheet (PW) 1001
Reference:Insurance Purchase Requirement
Summary:The Stafford Act requires Public Assistance (PA) grant applicants to obtainand maintain insurance coverage as a condition of receiving FEMA assistance for the repair of disaster-related damage.FEMA approved PW 1001 on March 4, 2004, for repairs to Southern High School’s air conditioning system with the stated condition that the Guam Department of Education (Applicant) must obtain and maintain insurance coverage in the amount of eligible assistance provided.At project closeout the funds were deobligated because the Applicant failed to obtain the required insurance coverage.In its first appeal, May 15, 2008, the Applicant claimed that insurance is not required for Category G work.Additionally, the Applicant stated that the requirement to obtain and maintain insurance coverage is only applicable to receiving FEMA assistance in future events.On
September 4, 2008, FEMA denied the appeal stating that the air conditioning system is a component of an insurable building and the insurance purchase requirement applies.On November 7, 2008, the Applicant submitted a second appeal reiterating its position from the first appeal.
Issues:1.Is an Applicant required to both obtain and maintain insurance coverage as acondition of receiving Federal assistance?
2.Is an Applicant required to obtain and maintain insurance coverage oninsurable property regardless of the permanent work category?
Rationale:Section 311(a) and (b) Insurance of the Robert T. Stafford Disaster Relief and Emergency Assistance Act; 44 Code of Federal Regulations (CFR) §206.202(b)(4) Application Procedures. Grantee; and Disaster Assistance Fact Sheet 9580.3 Insurance Considerations for Applicants.