Contracts often transfer more risk than expected. Insurance requirements in agreements can create exposure if coverage is not aligned.
Common Insurance Requirements in Contracts
• General liability limits
• Workers’ compensation coverage
• Additional insured endorsements
• Certificates of insurance
Additional Insured vs. Certificate Holder
Understanding the distinction is critical:
• Certificate holder = proof of coverage
• Additional insured = extended coverage under your policy
Indemnification Clauses and Risk Transfer
Contracts may require one party to assume responsibility for certain losses. These provisions can expand liability beyond standard policy intent.
Where Coverage Gaps Occur
• Limits below contractual requirements
• Missing endorsements
• Policy exclusions
• Assumptions that agreements are standard
Why This Matters for Texas Businesses
As operations grow, contract complexity increases. Each agreement introduces new exposure that should be reviewed alongside insurance coverage.
Frequently Asked Questions
What does additional insured mean?
It extends coverage to another party under your policy.
Is a certificate of insurance enough?
No. It only verifies coverage and does not extend protection.
Should insurance be reviewed before signing contracts?
Yes. Coverage should align with contractual obligations.
Connect with our Sanger & Altgelt team before signing your next agreement to ensure coverage aligns with contractual risk.
