The practical answer
Every vendor agreement needs an insurance clause, and most are copied from a document nobody remembers drafting. This is the practical version: what to require, when to require more, and how to make requirements enforceable rather than decorative.
The baseline (almost every vendor)
- Commercial General Liability: $1,000,000 each occurrence / $2,000,000 aggregate is the standard floor for vendors doing physical work on your property.
- Workers Compensation: statutory limits, for any vendor with employees — this is the one that protects you from their injured worker's claim.
- Additional insured status on the GL, via CG 20 10 (ongoing ops); add CG 20 37 (completed ops) for construction trades.
- Waiver of subrogation and primary & non-contributory wording — the endorsements that stop their insurer from clawing back at you and arguing about whose policy pays first.
When to require more
- Vehicles on site (deliveries, landscaping, snow removal): Auto Liability, $1,000,000 combined single limit.
- High-severity trades (roofing, structural, demolition, crane, electrical): umbrella/excess of $2–5M over the GL.
- Professional services (engineers, architects, consultants): professional liability / E&O, typically $1M.
- Anyone handling your data or systems: cyber liability — increasingly required by insurers upstream.
- One-day/low-risk vendors: consider a lighter tier so requirements don't become a reason small vendors can't work with you.
Making requirements enforceable
Three rules turn a clause into a control: (1) put the exact limits AND endorsement form numbers in the contract, so the vendor's agent knows precisely what to issue; (2) collect and verify the certificate — including the endorsement pages — before work starts, not after; (3) track expirations continuously, because a requirement that's only checked at onboarding is a requirement for the first year only.
Keep coverage decisions human and evidence explicit
CoverWarden records submitted evidence, requirements, findings, and authorized decisions. It does not issue coverage, guarantee claim outcomes, or replace your broker, attorney, or risk professional.
What teams usually ask
What insurance should a vendor have at minimum?
For on-site vendors: $1M/$2M general liability with additional insured status, plus statutory workers comp if they have employees. Scale up by trade risk and vehicle use.
Can I have different requirements for different vendors?
You should — a roofer and a window-washer don't carry the same risk. Good tracking systems support org-wide defaults with per-vendor overrides.
What are typical insurance requirements in a contract?
GL limits, auto and workers comp where applicable, umbrella for high-severity work, plus additional insured, waiver of subrogation and primary & non-contributory endorsements evidenced by attached endorsement pages — not just certificate checkboxes.