If you have been asked to provide a certificate of insurance (COI), you are not being singled out. This is a standard, and important, part of doing business.
General contractors, property owners, landlords, property managers, municipalities, lenders, and equipment leasing companies routinely require COIs from contractors, vendors, consultants, tenants, and other service providers before work begins.
In Texas, these requests typically involve familiar forms such as Form 1560 or ACORD 25, both used to verify that appropriate insurance coverage is in place.
Because COIs are so common, they are often treated as simple administrative paperwork. In reality, a COI is a snapshot of your risk profile. Misunderstanding what it represents, or assuming it provides protections it does not, can expose your business to unnecessary risk even on otherwise routine projects.
This article explains what a certificate of insurance actually communicates, why contracts increasingly require specific endorsements in addition to the certificate, and what Texas contractors and vendors should carefully review before signing an agreement.
A certificate of insurance (COI) is a document issued by an insurer or broker that summarizes an active insurance policy. It typically lists the types of coverage in force, such as general liability, workers’ compensation, commercial auto, and umbrella insurance, along with policy limits, effective dates, and the named insured.
Understanding certificate of insurance requirements starts with recognizing what the document is not. A COI is a summary, not the policy itself.
Risk Management magazine explains, COIs are often treated as an “express” version of an insurance policy, but they do not replace the underlying policy. In fact, standard COI language makes this explicit: “This certificate is issued as a matter of information only and confers no rights on the certificate holder.”
A COI does not modify, expand, or guarantee coverage. If a dispute arises over whether a claim is covered, the policy language, including any endorsements, governs, not the certificate. This distinction is critical. Contractors sometimes assume that if a coverage type appears on a COI, it automatically applies to every project or party involved. It does not, unless the policy and endorsements explicitly extend that coverage.
For general contractors, property managers, and municipalities, a COI functions as a quick verification tool. It allows them to confirm that a subcontractor or vendor carries baseline coverage before work begins without reviewing the full policy. However, because a COI can be issued even if coverage later lapses or changes, many Texas contracts now require additional documentation beyond the certificate itself.
One of the most common requirements tied to a certificate of insurance in Texas construction and vendor contracts is additional insured status. This is established through a specific endorsement that extends coverage under one party’s policy to another party, typically for claims arising out of the named insured’s work.
For example, if a subcontractor causes property damage or a third-party injury on a general contractor’s job site, and the general contractor is named as an additional insured on the subcontractor’s general liability policy, the general contractor can seek defense and indemnification directly under that policy. This shifts risk downstream to the party performing the work, which is why additional insured requirements are standard in many Texas contracts.
It is important to understand that additional insured status is not created by issuing a COI. It only exists if the appropriate endorsement is attached to the policy. The scope of that endorsement can vary significantly. Some apply only to ongoing operations, while others extend to completed operations, covering claims that arise after the work is finished.
Contractors and vendors should verify which form of endorsement applies to their policy, particularly on projects where liability may emerge long after completion, such as construction defect claims.
A waiver of subrogation is another provision commonly included in Texas contract insurance requirements, and one that is often misunderstood. Subrogation refers to an insurer’s right, after paying a claim, to pursue the party responsible for the loss to recover its costs. A waiver of subrogation means the insurer gives up that right against a specific party named in the contract, typically the other party to the agreement.
In practical terms, if a general contractor requires a subcontractor to waive subrogation, the subcontractor’s insurer cannot pursue the general contractor for reimbursement, even if the general contractor contributed to the loss. This helps prevent disputes between parties who are expected to maintain an ongoing working relationship.
It is important to note that a waiver of subrogation is not automatically included in standard liability policies. It must be added by endorsement, and depending on the policy, it may involve an additional cost. Before agreeing to this requirement, contractors should confirm with their insurance advisor that their policy supports the waiver and understand any cost or coverage implications.
While specific limits and endorsements vary by project, industry, and contracting party, Texas contractors commonly encounter the following insurance requirements:
Because Texas does not require workers’ compensation coverage for most private employers, contractors that operate as nonsubscribers should expect many general contractors and property owners to decline to work with them regardless of legal minimums. In practice, contract requirements often exceed state law, making it important to understand those expectations before bidding on a project.
A mismatch between contract requirements and what a COI actually reflects often surfaces at the worst possible time, typically after a loss has already occurred. If a general contractor assumes a subcontractor carries additional insured status, or that a waiver of subrogation is in place, without verifying the required endorsements, the resulting coverage gap becomes a real financial exposure rather than a simple administrative oversight.
For contractors and vendors, the key takeaway is to treat COI requests as more than a formality. Before signing any agreement that specifies certificate of insurance requirements, additional insured status, or a waiver of subrogation, it is worth consulting an independent insurance advisor. They can confirm that the required endorsements are in place, correctly worded, and accurately reflected in the supporting documentation.
Insurance requirements in Texas construction and vendor contracts are rarely one-size-fits-all, and the language can vary significantly by project, owner, or general contractor. An experienced commercial insurance advisor can review contract requirements before you sign, confirm whether your current policies meet those obligations, and identify gaps before they turn into costly claims.
If your business regularly works with general contractors, property owners, or municipalities, it is worth proactively aligning your coverage with those expectations. Certificates of insurance, additional insured endorsements, and waivers of subrogation should not be left to assumption.
Dean & Draper works with Texas contractors and vendors to review contract insurance requirements, structure policies to meet endorsement demands, and ensure documentation accurately reflects coverage in place. Contact their team to review your current policies or prepare for upcoming contract requirements with confidence.