March 29, 2026 · 5 min read
How to Check If Your Insurance Meets Contract Requirements
By Don Janacek, Founder & CEO
To check if your insurance meets contract requirements, compare every insurance clause in the contract against your actual policy declarations page. Check: required per-occurrence and aggregate limits, additional insured requirements, specific coverage types, and any endorsement or rider requirements.
Most businesses sign contracts without checking insurance compliance. According to common compliance scan results, the average contract contains 6 insurance requirements and the average business meets only 4 of them. That is a 33% non-compliance rate on day one.
What Contracts Typically Require
Most commercial contracts include an insurance requirements section (often Section 11 or "Insurance" or "Indemnification"). These clauses specify:
Minimum coverage limits. "Contractor shall maintain Commercial General Liability insurance with per-occurrence limits of not less than $2,000,000." If your GL is $1M/$2M per-occurrence, you meet the $2M requirement. If the contract says $2M aggregate minimum and your aggregate is $2M, you are at the floor with no room for multiple claims.
Specific coverage types. "Contractor shall maintain Workers Compensation, Commercial General Liability, Commercial Auto, and Umbrella/Excess Liability." If you do not carry umbrella coverage, you are non-compliant.
Additional insured status. "Owner shall be named as Additional Insured on Contractor's GL and Umbrella policies." This requires a specific endorsement on your policy (typically CG 20 10 or CG 20 37). If your policy does not have it, you need to request it from your broker before signing.
Waiver of subrogation. "Contractor shall provide waiver of subrogation in favor of Owner." This prevents your carrier from suing the contract counterparty after paying a claim. Requires a specific endorsement.
Primary and non-contributory. "Contractor's insurance shall be primary and non-contributory." This means your policy pays first, before the other party's insurance. Another endorsement requirement.
Common Compliance Failures
Limits too low. Contract requires $2M per-occurrence GL. You carry $1M. This is the most common failure.
Missing coverage type. Contract requires umbrella/excess. You do not carry umbrella. You cannot comply without purchasing a new policy.
No additional insured endorsement. Contract requires you to name the other party on your GL. Your policy does not have the endorsement. Your broker needs to request it.
Hired and non-owned auto not included. Contract requires hired and non-owned auto coverage. Your commercial auto policy only covers owned vehicles. Employees using personal vehicles for business are uninsured.
What Happens If You Are Not Compliant
Breach of contract. Non-compliance with insurance requirements is a material breach. The counterparty can terminate the contract, withhold payment, or pursue damages.
Lost bids. If you cannot provide a compliant certificate of insurance, you lose the bid before work begins. One contractor lost a $2M project because they could not show $5M umbrella coverage in time.
Personal liability. If a claim occurs and your insurance does not meet contract requirements, the indemnification clause may make you personally liable for the other party's losses.
How to Check Compliance
Upload any contract to CoverageShield. The AI extracts every insurance requirement and compares them against your actual policies. In 30 seconds, you see exactly which requirements you meet and which you do not.