Setting the right insurance requirements

When a long-standing vendor resists new requirements, Noelle suggests explaining that your carrier expects them. It's often true: carriers commonly set minimum limits and require endorsements such as additional insured, primary and noncontributory, and waiver of subrogation.

The takeaway: Use your carrier's standards to explain why requirements changed.

A local women's club running a July 4 booth with alcohol couldn't afford the required limits. The member city had the club carry a first layer, acted as excess above it, and added an indemnification agreement, special event coverage through a broker, and help with setup and training.

The takeaway: When a small vendor can't meet a requirement, layer coverage and add controls instead of waiving it.

In California, Thor sees wildfire, public safety and now public works claims, like tree management and dangerous road conditions, drawing very large verdicts. Some jobs that once required half a million in coverage now call for $1 million, $2 million or even $5 million.

The takeaway: Revisit limits for the services where verdicts are rising.

Agencies that work with foster care, residential and behavioral health nonprofits are being asked to lower general liability requirements because sexual abuse and molestation (SAM) coverage is hard to get in California, where AB 218 opened a window for older childhood abuse claims and extended how long survivors can sue. Thor's advice is to look at the partner's prevention programs and whether it has completed a SAM risk assessment, and to ask your broker for help finding coverage. Settlements are large. Thor recalled about $900 million for LA County, though he wasn't certain of the number. For the record, the county agreed to a $4 billion settlement in April 2025 and an $828 million settlement that October.

The takeaway: Before lowering a SAM requirement, review the partner's prevention programs and risk assessment.

Underwriters often add wildfire exclusions. One of Noelle's clients, a construction company building transmission lines in California, tracked its contractor management and subcontractor requirements closely and shared the data, and got a narrow exclusion limited to that work on its umbrella and excess policies.

The takeaway: Track your contract risk management and share it with underwriters at renewal.

Noelle requires additional insured, primary and noncontributory, and waiver of subrogation on every contract. Primary and noncontributory means the vendor's insurance pays first and yours doesn't contribute. Waiver of subrogation matters most on workers' comp, where you can't be an additional insured, because it stops the vendor's carrier from suing you to recover what it paid.

The takeaway: Make these three endorsements standard in every template.

Certificates carry disclaimers saying they aren't part of the policy, and a name in the description box isn't coverage. Additional insured coverage comes in different levels, with separate forms for ongoing and completed operations. Thor's pool trains staff outside the risk team so coworkers understand why the endorsements matter.

The takeaway: Get copies of each endorsement and read them, or have your broker review them.

CIRA bought Evident so its members can track certificates and the endorsements that come with them (thanks for the plug, Thor!). Members and the pool review and approve endorsements in the tool, especially blanket endorsements, which start to blur together but still need to be read one by one. Once a version is approved, they know it's good going forward.

The takeaway: Record which endorsement versions you've approved so each review gets faster.

Most cancellation endorsements only say the carrier will endeavor to notify you, and nonpayment notice is often just ten days. Noelle instead requires current certificates and endorsements before work starts, at any time on request, and within about five business days of expiration or renewal. She skips notice of material change, which is rarely defined.

The takeaway: Write the right to request current certificates at any time into your contracts.

Thor's members specify how long coverage continues after the work, typically two to five years and especially for professional liability. Noelle adds that general liability should run through the construction statute of limitations and repose, because most general liability claims come from completed operations.

The takeaway: Set a post-completion coverage period in every agreement and keep collecting certificates.

Noelle asks for the general liability declarations page and schedule of forms, and the full umbrella or excess policy, which may not follow the underlying coverage. Keep them for the full statute of repose. In one CIRA member case, a vendor's traffic control error led to a $600,000 loss, and because the city's documents and endorsements were in order, it paid $2,000 in legal fees.

The takeaway: File certificates, endorsements and policy copies for every job until the statute of repose runs out.