What are insurance requirements in a contract?

What do insurance requirements usually include?

These clauses often list specific types of insurance, such as general liability insurance or workers' compensation if you have employees.

They may also set minimum coverage limits and require proof of insurance, like a certificate of insurance, before work begins.

What happens if you don't meet insurance requirements?

Not having the required insurance can be considered a contract breach. This may allow the other party to cancel the agreement or seek damages.

It can also mean you are personally responsible for costs or claims that the insurance was supposed to cover.

What to do next...

1. Review the types and limits of coverage required.
2. Confirm your current insurance meets those requirements.
3. Obtain proof of insurance if needed.
4. Address any gaps before starting work.

What to consider in your specific situation

While insurance clauses are common, what you need depends on your contract and business risks.

• The type of work or services you provide.
• The specific insurance policies required.
• The coverage limits listed in the contract.
• Local laws or industry standards.
• The level of risk involved in the work.
• The financial impact of potential claims.

Meeting insurance requirements can help protect both your business and your clients from unexpected costs. Since every situation is different, consider more information through Rocket Copilot, a Legal Pro, or a legal document review to move forward with confidence.