NC H740

State procurement contracts must include a liability cap for contractors, with a presumptive limit of no more than two times the contract value

Liability cap may increase to three times the contract value if the Secretary completes a risk assessment determining the higher amount is necessary and the bid solicitation discloses the increased liability requirement

Liability limits do not apply to intentional or willful misconduct, damage to tangible personal property, physical injuries to persons, or contractor liability directly to third parties

Secretary may charge up to $250 to review a contractor's financial resources and must verify contractors have sufficient resources (including insurance) to cover the liability limit

Effective October 1, 2025, for contracts awarded, renewed, or amended on or after that date; annual reporting required by March 1 on contracts exceeding the two-times liability threshold