If you hire contractors, vendors, or other service providers, you will want to make sure you and your business are protected from claims or losses that the service provider is responsible for. That protection starts with making sure the service provider is carrying, and providing evidence of, the insurance required in their agreement with you.
Sample Vendor/Contractor minimum insurance requirements:
1. Workers Compensation Insurance as required by the laws and regulations of the State of California, and Employers’ Liability Insurance ($1,000,000 limit) shall be carried by each Vendor/Contractor covering all persons employed or deemed to be employed by Vendor/Contractor in connection with the work performed.
2. Commercial general liability including bodily injury, property damage and personal injury with a combined single limit of not less than $1,000,000 per project, per occurrence shall be carried by each Vendor/Contractor. Coverage shall be on an occurrence form and shall include products & completed operations coverage. (Underground explosion & collapse coverage shall be included where applicable.)
3. Vendor/Contractor shall carry Business Automobile liability with a liability limit of not less than $1,000,000 per covered accident applying to all Vendor/Contractor’s owned, non-owned and hired automobiles.
4. Commercial umbrella excess liability with a limit not less than (insert limit) per occurrence/aggregate applicable in excess of the underlying general, automobile and employers’ liability coverages.
5. Each policy shall name (insert name or refer to attachment) as additional insured and shall protect them from all claims for injury or damage within the limits stated above on which claims may arise from any and all operations under this Agreement; whether such operations are by Vendor/Contractor or anyone directly or indirectly employed by Vendor/Contractor. The policy endorsement must be delivered to (insert) with Certificates of Insurance as required below.
6. Vendor/Contractor’s insurance shall be primary & noncontributory coverage: (insert name) insurance shall be excess.
7. All insurance shall be carried with responsible companies (A.M. Best rated A- X or better).
8. Before Vendor/Contractor performs any work, or delivers materials to the property, Vendor/Contractor shall deliver this agreement, fully and properly executed by Vendor/Contractor, and original Certificates of Insurance including additional insured endorsement evidencing the foregoing insurance coverage. Such certificates of insurance shall provide that the insurance is in force and will not be canceled without written notice to (insert name).
9. Vendor/Contractor shall also require that any of their subcontractors also maintain the foregoing insurance requirements. Vendor/Contractor shall maintain current certificates of insurance evidencing such for all subcontractors in any way connected with work being performed at this property.
Authorized Signature Date
Of course, if the work to be performed represents an unusual or exceptional risk, additional insurance requirements may need to be added. This could include insurance to cover professional services, environmental (pollution) exposures, or cyber risk, etc..
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