COI requirements aren't universal. A construction general contractor requires very different coverage from a commercial tenant, and a healthcare facility vendor requires different coverage than a transportation subcontractor. Understanding what each industry typically requires helps you set appropriate requirements for your vendors and understand what requirements you'll face as a vendor yourself.
Why Requirements Vary
Typical Umbrella Limits by Industry
Requirements are driven by:
- The nature of the work (physical labor vs. professional services vs. goods delivery)
- The risk of injury to third parties
- The value of assets at risk
- Regulatory and licensing requirements
- Industry custom and practice
- The contracting party's own insurance program requirements
A mismatch between the risk and the requirement - in either direction - creates problems. Under-insured vendors leave the hiring party exposed. Over-insured requirements drive vendor costs up unnecessarily and can price out qualified smaller contractors.
Construction
Construction has the most complex COI requirements of any industry. Standard requirements for subcontractors on commercial projects:
General Liability: $1M-$2M per occurrence, $2M-$4M general aggregate. Additional insured (CG 20 10 + CG 20 37) for ongoing and completed operations. Primary and non-contributory. Waiver of subrogation.
Workers' Compensation: Statutory limits in all applicable states. Employer's liability $500K-$1M. Waiver of subrogation.
Commercial Auto: $1M combined single limit. Hired and non-owned auto typically required.
Umbrella/Excess: $5M-$25M depending on project size and contract tier. Must follow form over GL, WC, and auto.
Professional Liability: Required for design-build, architects, engineers, and specialty consultants. $1M-$5M depending on scope.
Builders Risk: Often provided by the GC or owner under a project policy; subcontractors may need their own for tools and equipment.
Construction requirements can also include pollution liability (for excavation, demolition, or hazmat work), riggers liability, and installation floaters for major equipment.
Commercial Real Estate
Property managers and landlords deal with two categories: tenants and service vendors.
Commercial Tenants: Standard commercial lease insurance requirements include $1M-$2M GL, workers' comp if applicable, and naming the landlord and property management company as additional insured. Lease forms often specify the certificate holder language exactly.
Property Service Vendors (janitorial, HVAC, landscaping, security): $1M GL with AI and WOS as standard. Workers' comp required. Higher limits for vendors with significant physical risk (window washing, roof work, structural work).
Construction and Renovation Contractors: Requirements mirror commercial construction standards, adjusted for scale.
Oil and Gas
Oil and gas has among the highest insurance requirements of any industry, reflecting the catastrophic loss potential in upstream operations.
General Liability: $1M-$5M per occurrence, $2M-$10M aggregate. AI required.
Workers' Compensation: Statutory plus $1M employer's liability. Some operators require stop-gap coverage for work in monopolistic WC states.
Commercial Auto: $1M-$5M CSL.
Umbrella/Excess: $25M-$100M or more depending on contractor tier and work scope.
Pollution Liability: $5M-$25M for contractors with environmental exposure.
Control of Well: Required for well service contractors working on or near wellheads.
Professional Liability/E&O: Required for engineering, inspection, and consulting services.
Oil and gas MSA insurance exhibits also routinely include knock-for-knock provisions (each party bears their own losses) that interact with insurance requirements in specific ways. Verification requires understanding both the requirement and the contractual context.
Healthcare
Healthcare vendors face requirements driven by HIPAA, patient safety, and malpractice exposure:
General Liability: $1M/$3M standard, higher for vendors with direct patient contact.
Professional Liability/E&O: Required for any vendor providing clinical or medical services - staffing agencies, clinical services, medical equipment maintenance.
Cyber Liability: Increasingly required for any vendor with access to electronic health information.
Workers' Compensation: Standard statutory requirements.
Transportation and Logistics
Commercial Auto: $750K-$1M CSL is the Federal Motor Carrier Safety Administration minimum for commercial truckers. Many shippers require $1M+.
Cargo Insurance: Required for carriers handling high-value goods. Limits depend on commodity type and shipment values.
GL: $1M standard.
Umbrella: $5M+ for larger transportation relationships.
Motor carrier authority (FMCSA operating authority) confirmation is also standard in transportation contracts - a step beyond COI verification.
Franchises
Franchisors typically have system-wide insurance requirements in their franchise agreements:
GL: $1M-$2M per occurrence. Franchisor named as additional insured.
Commercial Auto: $1M if franchisee operates vehicles.
Workers' Compensation: Required for any franchisee with employees.
Business Interruption/Property: Often required to protect the value of the franchise investment.
Franchise agreements specify requirements centrally, and the franchisor often uses a compliance monitoring system to track all franchisee COIs across the system.
How to Set Appropriate Requirements for Your Vendors
The right requirements for your organization depend on: the type of work performed, the value of assets at risk, your own contractual obligations (your upstream contracts may require you to flow down insurance requirements), and your risk tolerance.
Start with your highest-risk vendor category and build requirements from there. For most organizations, a tiered approach - Tier 1 (standard), Tier 2 (elevated), Tier 3 (high-risk) - is workable without requiring a custom requirements document for every vendor.
Bramble reads your contracts and extracts the requirements specific to each vendor, then compares submitted COIs automatically against those requirements. See how it works.