Sooner or later a customer sends a machine shop or manufacturer a page that has nothing to do with the parts and everything to do with whether you get the work: their insurance requirements. It might arrive bundled with a purchase order, buried in a master supply agreement, or as a flat request from a procurement department — “send us a certificate, name us as additional insured, here are the limits.” For a lot of owners it lands as a hassle and a mystery at once. It is neither. It is a standard, learnable checklist, and clearing it cleanly is part of winning and keeping accounts.
This is a practical guide to that checklist — what each requirement means, which of your coverages it touches, and why the wording matters as much as the numbers. It is operational, not legal advice, and it deliberately avoids quoting limit figures, because the only limits that matter are the ones your specific contracts demand. The goal is simple: understand what your customers are asking for so a coverage requirement clears the deal instead of stalling it.
The certificate of insurance is the proof, not the policy
Start with the document everything else rides on. A certificate of insurance — a COI — is a one-page summary that proves your coverage is in force: which lines you carry, at what limits, with what endorsements and named parties, and through what dates. It is not the policy itself, and it does not change your coverage; it reports it. A customer’s risk department relies on the COI to confirm, before they take on the exposure of buying from you, that you actually carry what your contract said you would.
Because a COI is a condition of doing business in most supply relationships, a stale, lapsed, or wrong certificate can quietly cost you. A purchase order can be held, a payment can be delayed, an account can go looking elsewhere — not because your work was wrong, but because the paperwork that proves your coverage did not match what the contract required. Keeping current, accurate certificates flowing to the customers who require them is unglamorous and genuinely important.
Additional-insured status: ongoing and completed operations
The most consequential requirement, and the one most worth understanding, is additional-insured status. When a customer asks to be named as an additional insured on your liability policy, they are asking your policy to cover them, too, for claims that arise out of your work or your product. The logic is sound: if your part fails downstream or your operation causes a third-party injury, the customer can be dragged into the claim alongside you, and they would rather have the protection of the policy closest to the risk — yours — than lean only on their own.
It is added by endorsement, and for a manufacturer the wording carries a distinction that matters. In the standard ISO system, the endorsement that covers a customer for your ongoing operations is along the lines of CG 20 10, while the one that covers them for your completed operations — after the product has shipped or the job is finished — is along the lines of CG 20 37; editions vary by carrier, so the exact form on your policy is what actually controls. The reason a manufacturer has to watch the completed-operations side specifically is the same reason products liability matters so much in this trade: a product you made keeps existing long after it leaves your dock, and a claim can surface well after the sale. An additional-insured endorsement that only reaches your ongoing operations can leave the customer — and the relationship — exposed for exactly the long-tail product claim the manufacturing class is defined by. Matching the right endorsement to what the contract demands is the whole job.
Limits, waivers, and primary wording
Three more requirements show up on almost every serious contract, and each is handled through your policy rather than just signed on paper.
- Minimum limits. The contract sets a floor on how much coverage you carry. A small account may ask for modest general-liability limits; a large OEM or distributor often requires substantially higher ones, sometimes more than a primary general-liability policy carries on its own — which is where an umbrella layer stacked above your primary policy comes in. There is no universal number, and quoting one here would be guessing; the practical move is to build your program to the highest limit your real contracts demand.
- Waiver of subrogation. Subrogation is your insurer’s right, after paying a claim, to recover from whoever was actually at fault. A waiver of subrogation is your agreement — backed by your insurer through an endorsement — not to pursue the customer even if they contributed to the loss, so that doing business with you cannot come back as a claim from your own carrier against them. It is common in supply contracts and frequently required on workers compensation as well as general liability.
- Primary and non-contributory. This wording settles whose insurance pays first. When your customer is an additional insured on your policy, primary-and-noncontributory language means your policy responds first and in full for claims arising out of your work or product, without forcing the customer’s own coverage to contribute. It makes being named on your policy real protection rather than a shared bill.
The thread through all three is the same: the contract states the requirement, but it is the endorsements and wording on your policy that actually satisfy it. A certificate that lists the right limits but lacks the endorsements behind it is a promise the policy does not keep.
Which coverages the requirements touch
The requirements rarely land on a single policy. General liability is almost always named, because it carries the products-liability and products-completed-operations exposure that a product or operation claim runs through — and the additional-insured, waiver, and primary-wording requirements usually attach here. Commercial property can come into it where you hold a customer’s tooling or materials at your facility. Workers compensation is commonly required, frequently with its own waiver of subrogation, because your crew works on the product. And an umbrella layer is often required when a contract’s limits run above your primary general liability. The contract decides which lines and what limits; the work is matching your actual program — the right endorsements on the right lines — to what the document in front of you demands, line by line.
A contract review that saved the account
Picture a shop that lands a long-courted account with a large OEM. The parts are quoted, the capacity is there, and the deal is all but done — until the OEM’s procurement department sends over a supply agreement with two pages of insurance requirements: a certificate, additional-insured status on general liability, a specific minimum limit, a waiver of subrogation, primary-and-noncontributory wording, and additional-insured coverage extended to completed operations.
The owner reads it before signing instead of after. Two things turn out to need attention. The minimum limit the contract specifies runs above what the shop’s primary general liability carries, so an umbrella layer has to sit above it to reach the number. And the existing additional-insured endorsement reaches the shop’s ongoing operations but not its completed operations — exactly the long-tail product side the OEM is most concerned about. Because the owner caught both before signing, the agent arranges the umbrella and the completed-operations endorsement, the certificate goes out matching the contract on every line, and the account closes on schedule. Had the same gaps surfaced when the certificate request landed after signing, the deal would have stalled — or worse, the shop would have signed a promise its policy could not keep. The difference was reading the requirements as a checklist to satisfy, not paperwork to rubber-stamp.
That habit — treat the requirements as part of winning the work — protects accounts the same way diversifying the book does; passing a customer’s insurance checklist cleanly is one more way you keep an account rather than lose it, which is why it belongs alongside reducing customer concentration and the broader work of business continuity and equipment-breakdown planning. The coverages the requirements touch are the ones to read closely: general liability for the products and additional-insured piece, and workers compensation for the crew and its waiver. Browse more owner resources as the library grows, and when a customer’s requirements page is sitting on your desk and you want the policy built to match it, start a quote.