What types of insurance do contracts usually require?

What are the most common types of required insurance?

General liability insurance is the most common. It covers injuries, property damage, and basic claims tied to your business.

Professional liability (also called errors and omissions) may be required if you provide services or advice. Workers' compensation is often required if you have employees. Commercial auto insurance may be needed if you use vehicles for work.

Contracts often also require endorsements such as additional insured status, primary and non-contributory coverage, or waivers of subrogation.

How do you know which ones apply to you?

Start with the contract—it should clearly list required policies and coverage limits. Then compare those requirements to your business activities.

For example, service providers may need professional liability, while businesses using vehicles may need commercial auto coverage. Legal requirements may also apply depending on your location and whether you have employees.

What to do next...

1. Review the contract for listed insurance types and limits.
2. Compare requirements to your current coverage.
3. Identify any gaps based on your business activities.
4. Confirm you can provide proof of insurance if required.

What to consider in your specific situation

While these are common policies, what you need depends on your business and contract details.

• The type of services or work you perform.
• The specific risks tied to your operations.
• The exact wording of the contract requirements.
• Local laws on required insurance coverage.
• Whether you have employees or use vehicles.
• The potential cost of claims or damages.

Having the right insurance in place can help you meet contract terms and reduce financial risk. Since every situation is different, consider more information through Rocket Copilot, a Legal Pro, or a legal document review to move forward with confidence.