Open almost any commercial contract — a lease, a subcontract, a vendor agreement, a service deal — and somewhere in the back you'll find a block of dense text headed "Insurance" (usually right next to "Indemnification"). Most people skim it and sign. That block is quietly one of the most important parts of the whole agreement: it dictates the coverage you must carry, the endorsements you must bolt on, and the paperwork you must produce — and if your policy doesn't actually deliver what it demands, you can be in breach of contract *and* uninsured at the same time. Here's how to read it, requirement by requirement.
"Minimum limits of $1,000,000 per occurrence / $2,000,000 aggregate"
This sets the floor on your general liability coverage. Per occurrence is the most the policy pays for any single claim; aggregate is the most it pays in total for the policy year. The combination most contracts ask for is $1M/$2M, and larger projects or landlords often want an umbrella stacked on top to reach $2M, $5M, or more.
The trap: carrying a $1M aggregate and burning through it on an earlier claim can leave you technically out of compliance for the rest of the year. Match the limits to what you actually sign for.
"Additional insured"
The other party wants to be covered under your policy, not just protected by it. That's done with an additional-insured endorsement — and the specific form matters more than most people realize. There's a difference between coverage for ongoing operations and completed operations, and between a scheduled endorsement (naming one party) and a blanket one (covering anyone you're contractually required to add). Agreeing to the words "additional insured" without checking the form is how a party ends up named but not actually covered when it counts.
"Primary and non-contributory"
This tells the insurers whose policy pays first. By default, when two policies could respond, they share. Primary and non-contributory wording flips that: it makes *your* policy pay first and in full, before the other party's coverage is touched. Contracts demand it so the risk they transferred to you doesn't quietly leak back onto their own policy. It's a specific endorsement, not automatic.
"Waiver of subrogation"
Subrogation is your insurer's right to chase whoever caused a loss to recover what it paid. A waiver of subrogation gives up that right against the other party — so after your carrier pays a claim, it can't turn around and sue the very party you signed the contract with. Landlords, general contractors, and large customers routinely require it. It's an endorsement you add, and it can slightly affect pricing, which is why it belongs in the conversation before you sign.
"Indemnification" / "hold harmless"
This is usually its own section, right beside insurance, and it's the one that transfers the most risk. A hold-harmless agreement is a promise to absorb certain losses *for* the other party. The broader the wording, the more you've taken on — and in some states, a broad "I'll cover you even for your own negligence" clause is exactly what triggers an action-over claim, where an injured worker's suit routes back to you. Your insurance has to be built to back the indemnity you agreed to, or the promise is one you're funding personally.
"Workers' compensation and employers liability"
If you have employees, contracts almost always require workers' compensation at statutory limits plus employers liability (commonly $500,000 or $1M). General contractors collecting this from subcontractors do it for a concrete reason: an uninsured sub's injured employee becomes the GC's problem. Even owner-only operations get asked for proof — which is its own conversation about whether you can waive it.
"Certificate of insurance" (and why it's not enough on its own)
Finally, the contract wants proof — a certificate of insurance. Important to understand: a certificate is a *snapshot*, not coverage. It shows what you carried on the day it was issued; it doesn't grant anyone additional-insured status or guarantee the coverage is still in force. The real protection comes from the actual endorsements on your policy — the certificate just evidences them. Don't let a clean certificate lull you into thinking the underlying endorsements are actually there.
Read it before you sign — not after a claim
The through-line: every line in the insurance section is a specific, separate thing your policy has to be set up to deliver. Limits, additional insured (the right form), primary and non-contributory, waiver of subrogation, the coverages themselves, and the proof. Miss one and you can be in breach the day you sign — and discover the gap only when a claim lands on the one requirement you didn't actually meet.
Our approach
At Cory Washington & Co., we read the insurance and indemnity section before you sign. We tell you plainly whether your current policy already meets it, which endorsements you'd need to add and what they cost, and where a clause is asking for more risk than the deal is worth. The goal is simple: you meet every requirement in the contract without overpaying for coverage it doesn't actually demand — and without discovering a gap at claim time.
About to sign a lease, a subcontract, or a vendor agreement? Send it over with a quote request and we'll decode the insurance section with you. If you're the one *writing* the requirements — a GC collecting from subs — see what insurance a contractor should collect before work starts.
Frequently Asked
What does the insurance section of a contract usually require?
Most commercial contracts require some mix of: minimum liability limits (often $1M per occurrence / $2M aggregate), specific coverages (general liability, workers' compensation, auto, sometimes professional or umbrella), additional-insured status for the other party, primary and non-contributory wording, a waiver of subrogation, and a certificate of insurance proving it all. Many also include an indemnification (hold-harmless) clause. Each of those is a separate, specific thing your policy has to be set up to deliver.
What happens if I sign a contract I can't meet the insurance requirements for?
You've taken on a contractual obligation your policy may not back. If a claim arises and you didn't actually carry the required coverage or endorsements, you can be in breach of contract on top of the loss — and you may have promised an indemnification your insurer won't fund because the supporting coverage was never in place. The time to check the insurance section is before you sign, not after a claim.
Can my insurance agent review a contract's insurance requirements?
Yes, and they should. A good agent reads the insurance and indemnity section before you sign, tells you whether your current policy already meets it, what endorsements you'd need to add, and roughly what it costs — so there are no surprises and no gaps. At Cory Washington & Co. we do this as a standard part of placing and servicing an account.
This article is general information for business owners, not insurance or legal advice, and does not bind or alter coverage. Policy terms, eligibility, and pricing vary by carrier and state — confirm specifics with our licensed team before making decisions.