Certificate of Insurance Requirements for Vendors: Limits, Endorsements and a Sample COI Requirements Clause

Once your requirements are written, the work shifts to checking them. Our certificate of insurance tracking software reads each ACORD 25 and its attachments, and COI verification software compares what it found against the tier you assigned. If your requirements name specific endorsements, the certificate of insurance endorsements reference covers every ISO form a vendor might send back, and vendor insurance compliance software handles the chasing when a renewal is late.

Sample certificate of insurance requirements clause

This is the shape of a clause that produces the right endorsements instead of the right adjectives. Have your own counsel adapt it; the point is the level of specificity, not the exact wording.

Vendor shall maintain, at its own expense and for the duration of this Agreement and for three years after completion of the Work, commercial general liability insurance on an occurrence form with limits of not less than $1,000,000 each occurrence, $2,000,000 general aggregate and $2,000,000 products and completed operations aggregate; commercial automobile liability of not less than $1,000,000 combined single limit; and workers compensation at statutory limits with employers liability of not less than $1,000,000. Company and its affiliates shall be named as additional insureds for both ongoing and completed operations by endorsement forms CG 20 10 and CG 20 37, or their equivalents. Such insurance shall be primary and non-contributory by endorsement form CG 20 01, or its equivalent, and shall include a waiver of subrogation in favor of Company by endorsement forms CG 24 04 and WC 00 03 13, or their equivalents. Vendor shall deliver a certificate of insurance together with copies of the required endorsement pages before commencing the Work, and shall deliver renewal documentation before each policy expires. All insurers shall carry an A.M. Best rating of A- VII or better.

Four details in that clause do real work. It names forms rather than phrases. It asks for the endorsement pages, not only the certificate. It requires completed operations to survive the end of the job, which is when construction claims actually arrive. And it sets an insurer quality floor, because a $1,000,000 limit from a carrier that cannot pay is not a $1,000,000 limit.

Which additional insured form to require, by vendor type

Additional insured is not one status. The ISO CG 20 series splits it by relationship, and requiring the wrong member of the family is one of the quietest ways to end up uncovered.

For a vendor performing operations for you, CG 20 10 is the ongoing operations form and CG 20 37 is the completed operations form. Since the 10 01 edition, CG 20 10 stops at the end of the work, which is why the two are normally required together. The 12 19 revision added CG 20 39 and CG 20 40, automatic status forms that include completed operations, so a packet issued after December 2019 with no CG 20 37 in it is not automatically a gap; check what else is attached before you reject it.

For a supplier whose products you resell, the form is CG 20 15 Additional Insured - Vendors. It grants status only for bodily injury or property damage arising out of the products shown in its schedule, distributed or sold in the regular course of your business. CG 20 10 would not respond to a products claim of that kind, so a distributor that copies a construction requirements list is asking for a form that does not fit its exposure.

Blanket forms, CG 20 33 and CG 20 38, grant status automatically wherever a written agreement requires it. CG 20 33 reaches only a party the vendor contracted with directly. CG 20 38 was introduced partly to handle the long entity lists that owners and lenders demand. Both share one condition worth understanding: no qualifying written agreement, no status. The Independent Insurance Agents of Texas put it plainly in their certificate manual, warning that if there is no contract between the insured and the entity requesting additional insured status, the endorsement does not cover that entity, whatever the certificate says.

What your own requirements clause does to your limits

This one surprises people who write requirements. From the 04 13 editions onward, the CG 20 10 and CG 20 37 forms carry language limiting the insurance afforded to the additional insured so that it will not be broader than what the named insured was required by contract to provide, and capping the limits at the amount the contract required. Your requirements clause therefore became a ceiling as well as a floor. If you require $1,000,000 and the vendor happens to carry $10,000,000, the endorsement gives you $1,000,000. Requiring limits of not less than a stated amount, rather than limits of a stated amount, is the usual drafting response, and it costs nothing to fix before the contract is signed.

Primary and noncontributory, and the two places it does not exist

CG 20 01 makes the vendor's general liability primary and non-contributory, but only where the additional insured is a named insured under the other insurance and the vendor agreed in writing that it would be. It does nothing at all for the automobile policy; the auto equivalent is CA 04 49. ISO publishes no workers compensation primary and noncontributory endorsement, so a requirement demanding one from every line of coverage will simply go unanswered on the comp policy.

There is a second gap on the certificate itself. The ACORD 25 carries exactly two endorsement columns, ADDL INSD and SUBR WVD. There is no primary and noncontributory column, which means a checkbox review structurally cannot confirm it. If primary and noncontributory matters to you, the endorsement page is the only place to verify it, and asking the agent to type the phrase into the Description of Operations box does not substitute. The IIAT manual is direct about that too: a certificate should not make a declaratory statement that coverage for the additional insured will be primary and non-contributory, because saying so does not make it so.

Waivers of subrogation cost the vendor money

On general liability the waiver is CG 24 04, with CG 24 53 as the automatic version added in December 2019. On automobile it is CA 04 44 scheduled or CA 04 43 automatic. On workers compensation it is WC 00 03 13, and this one carries a price: the California version of the form states an additional premium of five percent of the California workers compensation premium on the payroll segregated to the waiver. That is worth knowing when a small vendor pushes back on a blanket waiver requirement across every line. Requiring waivers only where the contract exposure justifies them is a reasonable position, and it removes a real cost argument from the onboarding conversation.

What to require on the certificate itself

Ask for the certificate and the endorsement pages together, because they answer different questions. The certificate tells you which policies exist, their numbers, their dates and their limits. The endorsements tell you whether your company actually has status under them. The ACORD 25 says as much in its own IMPORTANT block, noting that if the certificate holder is an additional insured the policies must have additional insured provisions or be endorsed, and that a statement on the certificate does not confer rights in lieu of such endorsements.

One more thing not to require: a specific number of days notice of cancellation written onto the certificate. The 2016/03 ACORD 25 cancellation legend says only that notice will be delivered in accordance with the policy provisions. Producers in many states are prohibited from altering it. Texas Senate Bill 425 and the Texas Department of Insurance rules that followed bar an agent from issuing a certificate that alters, amends or extends the coverage or terms of the policy, and several states run comparable statutes. Put your notice requirement in the contract, where it binds the vendor, rather than on a form the agent is not allowed to change.