Insurance clause: Copy, customize, and use instantly
Introduction
An insurance clause sets out the specific types of insurance coverage required under a contract. It ensures that both parties are adequately protected against risks related to the agreement. These clauses are especially critical in agreements involving liability, high-value transactions, or ongoing services.
Below are insurance clause templates for different situations. Copy the one you need, customise it, and include it in your contract.
Standard insurance clause
This clause sets out basic insurance requirements for the parties.
Each party shall, at its own expense, maintain during the term of this agreement and for a period of [insert time, e.g., "one year"] thereafter, insurance policies providing adequate coverage for its obligations under this agreement, including but not limited to general liability insurance with coverage limits of not less than [insert amount] per occurrence and [insert amount] in the aggregate.
Professional liability insurance clause
This clause is tailored for agreements where professional services are provided.
The service provider shall maintain professional liability insurance with coverage limits of not less than [insert amount] per claim and [insert amount] in the aggregate during the term of this agreement and for a period of [insert time, e.g., "two years"] thereafter. Proof of such insurance must be provided to the other party upon request.
Comprehensive insurance clause
This clause requires multiple types of insurance coverage.
Each party shall maintain the following insurance coverage during the term of this agreement: (i) general liability insurance with limits of not less than [insert amount], (ii) workers' compensation insurance as required by applicable law, and (iii) property insurance covering any assets used in connection with this agreement. Proof of all policies must be provided upon request.
Insurance with waiver of subrogation clause
This clause prevents insurers from seeking recovery from the other party.
Each party shall maintain insurance as required under this agreement and shall ensure that its insurers waive any right of subrogation against the other party. Proof of such waiver must be included in the certificates of insurance provided to the other party.
Insurance with additional insured clause
This clause requires one party to name the other as an additional insured.
The [insert party, e.g., “contractor”] shall maintain general liability insurance with coverage limits of not less than [insert amount] and shall name [insert other party] as an additional insured under its policy. Proof of additional insured status must be provided before commencing work under this agreement.
Insurance with notice of cancellation clause
This clause ensures the other party is notified if insurance is cancelled or altered.
Each party shall maintain the required insurance coverage and provide the other party with at least [insert timeframe, e.g., “30 days”] prior written notice of any cancellation, non-renewal, or material change in such coverage.
Insurance for high-risk activities clause
This clause addresses agreements involving inherently dangerous activities.
The [insert party, e.g., “service provider”] shall maintain insurance coverage appropriate for the high-risk activities contemplated under this agreement, including general liability insurance with coverage limits of not less than [insert amount] and umbrella liability insurance of [insert amount]. Proof of such insurance must be provided prior to commencement of any activities.
Insurance with self-insured option clause
This clause allows a party to self-insure instead of purchasing traditional insurance.
Either party may satisfy its insurance obligations under this agreement through self-insurance, provided that it maintains sufficient financial resources to meet the coverage limits specified in this agreement. Written notice of intent to self-insure must be provided to the other party.
Insurance with indemnity clause
This clause links insurance coverage to indemnification obligations.
Each party shall maintain insurance coverage sufficient to fulfill its indemnity obligations under this agreement, including general liability insurance with limits of not less than [insert amount]. Proof of such coverage must be provided upon request.
Insurance for subcontractors clause
This clause requires subcontractors to maintain insurance.
The [insert party, e.g., “contractor”] shall ensure that any subcontractors engaged in connection with this agreement maintain insurance coverage consistent with the requirements set forth in this agreement. Proof of subcontractor insurance must be provided to the other party upon request.
Insurance with minimum rating requirement clause
This clause specifies minimum ratings for insurers.
All insurance policies required under this agreement shall be issued by insurers with an A.M. Best rating of at least [insert rating, e.g., “A-”] or equivalent. Proof of such ratings must be provided upon request.
Insurance with strict compliance clause
This clause takes a formal and no-tolerance tone, emphasizing adherence to insurance requirements.
Each party shall strictly comply with the insurance requirements set forth in this agreement. Failure to maintain the specified coverage or to provide proof of compliance within [insert timeframe] upon request will constitute a material breach of this agreement.
Insurance with mutual trust clause
This clause uses a collaborative tone, emphasizing mutual responsibility.
Both parties agree to maintain appropriate insurance coverage to protect against risks associated with this agreement. Each party trusts the other to notify promptly of any changes or lapses in coverage that could impact the agreement.
Insurance with broad interpretative scope clause
This clause adopts a comprehensive tone, covering unexpected scenarios.
The insurance obligations under this agreement shall be interpreted broadly to include all risks reasonably associated with the performance of this agreement, including risks not explicitly detailed herein. Each party shall maintain coverage that reasonably aligns with its obligations.
Insurance with emphasis on renewal clause
This clause highlights the importance of renewing coverage promptly.
Each party shall ensure that all required insurance policies remain in full force and effect for the duration of this agreement. Renewal certificates must be provided to the other party at least [insert timeframe] prior to the expiration of any policy.
Insurance with proactive risk management clause
This clause emphasizes a proactive approach to managing risks through insurance.
Each party shall maintain and review its insurance coverage annually to ensure it adequately addresses evolving risks related to this agreement. Proof of updated coverage must be provided to the other party within [insert timeframe] of renewal or adjustment.
Insurance with comprehensive transparency clause
This clause underscores full transparency regarding insurance policies.
Each party agrees to provide full transparency regarding its insurance coverage, including policy terms, limits, exclusions, and endorsements. Any updates or changes must be communicated in writing to the other party within [insert timeframe].
Insurance with limited liability safeguard clause
This clause limits liability exposure if insurance requirements are unmet.
Each party acknowledges that its liability under this agreement may be limited to the extent of its insurance coverage. Any failure to maintain the required insurance does not extend liability beyond the agreed limits under this agreement.
Insurance with cooperative claims handling clause
This clause highlights collaboration in insurance claims management.
In the event of a claim covered under the required insurance, both parties agree to cooperate fully to facilitate the claims process, including providing necessary documentation and timely notifications to insurers.
Insurance with focus on long-term agreements clause
This clause is designed for multi-year contracts, emphasizing continuity.
For agreements lasting beyond [insert timeframe, e.g., “two years”], each party shall ensure continuous coverage under all required insurance policies. Proof of renewal or replacement policies must be provided annually.
Insurance with emphasis on exclusions clause
This clause clarifies the handling of coverage exclusions.
Each party acknowledges that the required insurance may include exclusions or limitations. Any such exclusions that could reasonably impact this agreement must be disclosed to the other party in advance.
Insurance with escalation in coverage clause
This clause anticipates increasing coverage needs over time.
The parties agree that insurance coverage limits may be increased during the term of this agreement to reflect changes in risk or value. Written notice of any required increase must be provided at least [insert timeframe] before enforcement.
Insurance with indemnity-linked exclusions clause
This clause ties indemnity obligations to insurance exclusions.
If any loss or damage falls outside the scope of the required insurance coverage due to exclusions or limitations, the responsible party shall indemnify the other party for such losses, provided such losses arise directly from a breach of this agreement.
Insurance with subcontractor compliance clause
This clause ensures subcontractors meet the same insurance standards as the primary parties.
The [insert party] shall ensure that all subcontractors maintain insurance coverage equivalent to the requirements set forth in this agreement. Proof of subcontractor compliance must be provided to the other party upon request.
Insurance with specified deductibles clause
This clause limits the maximum deductible amounts allowed under required insurance policies.
Each party shall ensure that all insurance policies required under this agreement have deductibles not exceeding [insert amount]. Any deviations must be approved in writing by the other party.
Insurance with adjustment to coverage limits clause
This clause allows for periodic review and adjustment of insurance coverage limits.
The parties agree to review the required insurance coverage limits annually and adjust them as necessary to reflect changes in risk or market conditions. Written confirmation of any adjustments must be provided.
Insurance with overlapping coverage clause
This clause ensures that multiple policies do not leave any gaps in coverage.
Each party shall maintain overlapping insurance policies to ensure continuous and complete coverage for all risks associated with this agreement. Any gaps in coverage will constitute a breach of this agreement.
Insurance for project-specific policies clause
This clause requires separate insurance policies tailored to a specific project under the agreement.
The [insert party] shall procure and maintain project-specific insurance policies for the duration of [insert project name]. These policies must meet or exceed the requirements of this agreement.
Insurance with no material change clause
This clause prohibits significant alterations to insurance coverage during the term of the agreement.
Each party shall ensure that no material changes are made to the required insurance coverage without providing at least [insert timeframe] prior written notice to the other party. Any unapproved changes will render the party in breach of this agreement.
Insurance with compliance certification clause
This clause requires an annual certification of insurance compliance.
Each party shall provide an annual certification confirming compliance with all insurance requirements under this agreement. The certification must include a summary of coverage limits, policy durations, and endorsements.
Insurance with event-triggered escalation clause
This clause increases coverage requirements in response to specific events.
In the event of [insert triggering event, e.g., “a liability claim exceeding $X”], the parties agree to increase the required insurance coverage limits to reflect the heightened risk. Written confirmation of compliance must be provided within [insert timeframe].
Insurance with joint policy option clause
This clause allows the parties to agree on a joint insurance policy to reduce costs or overlap.
The parties may mutually agree to procure a joint insurance policy that satisfies the requirements of this agreement. Such policy must clearly delineate the respective rights and obligations of each party
Insurance with cyber-specific clause
This clause requires insurance to address cybersecurity risks.
Each party shall maintain cybersecurity insurance with coverage limits of not less than [insert amount] to address risks related to data breaches, cyberattacks, and unauthorized access during the term of this agreement.
Insurance with renewal alignment clause
This clause ensures policy renewal dates align with the agreement’s term.
All insurance policies required under this agreement must have renewal dates aligned with the term of this agreement. Proof of renewal must be submitted to the other party no later than [insert timeframe] before the expiration of the existing policy.
Insurance with minimum claims history clause
This clause requires insurers to have a proven claims payment track record.
All insurance policies required under this agreement must be issued by insurers with a history of paying at least [insert percentage, e.g., “95%”] of claims over the past [insert timeframe, e.g., “three years”]. Proof of claims history must be provided upon request.
Insurance with advance premium notice clause
This clause ensures the parties notify each other of any significant premium changes.
Each party must notify the other in writing of any significant increases in insurance premiums for policies required under this agreement at least [insert timeframe, e.g., “30 days”] before the premium adjustment takes effect.
Insurance with audit rights clause
This clause grants the right to audit insurance policies for compliance.
Each party grants the other the right to audit the required insurance policies, including coverage details, exclusions, and endorsements, at any time during the term of this agreement. The audited party must provide requested documents within [insert timeframe].
Insurance with pooled risk clause
This clause allows parties to pool insurance for shared activities under the agreement.
The parties may establish a pooled insurance policy to cover joint activities under this agreement. The policy must meet or exceed the minimum coverage requirements outlined herein and allocate costs proportionally.
Insurance with third-party beneficiary clause
This clause explicitly names a third party as a beneficiary of the insurance.
All insurance policies required under this agreement must designate [insert third party] as a beneficiary, ensuring the right to claim benefits directly from the insurer if necessary.
Insurance with exclusions notification clause
This clause mandates disclosure of any policy exclusions.
Each party must disclose any exclusions in the required insurance policies that could impact obligations under this agreement. Written notice of such exclusions must be provided before the agreement is executed.
Insurance with catastrophe coverage clause
This clause requires additional coverage for catastrophic risks.
The [insert party] must maintain insurance policies that include coverage for catastrophic events, such as natural disasters or major disruptions, with minimum limits of [insert amount]. Proof of catastrophe coverage must be provided to the other party.
Insurance with time-limited compliance clause
This clause sets a deadline for meeting all insurance requirements.
All required insurance policies must be in place within [insert timeframe, e.g., “30 days”] of executing this agreement. Failure to comply by this deadline will result in suspension of the agreement until proof of coverage is provided.
Insurance with cross-indemnity clause
This clause ties insurance obligations to mutual indemnification.
Each party agrees to maintain insurance coverage that aligns with its indemnification obligations under this agreement. Failure to maintain adequate insurance will not relieve the responsible party of its indemnity obligations.
Insurance with breach-specific penalties clause
This clause imposes penalties for failing to meet insurance requirements.
If either party fails to maintain the required insurance coverage, the non-compliant party shall be liable for a penalty of [insert amount] per day until compliance is restored. This penalty is in addition to any damages resulting from the breach.
Insurance with reinsurance requirement clause
This clause mandates the use of reinsurers for additional risk protection.
All insurance policies required under this agreement must be supported by reinsurance agreements to ensure additional risk protection. Proof of reinsurance arrangements must be provided to the other party upon request.
Insurance with in-force requirement clause
This clause ensures policies remain active during the performance of the agreement.
Each party shall ensure that all required insurance policies remain in force throughout the term of this agreement. Any lapse in coverage will constitute a material breach of this agreement.
Insurance with minimum reserves clause
This clause requires insurers to maintain sufficient financial reserves.
All insurance policies required under this agreement must be issued by insurers with financial reserves of no less than [insert amount], as verified by independent financial audits.
Insurance with capped liability clause
This clause limits liability exposure to the extent of insurance coverage.
Each party’s liability under this agreement shall not exceed the limits of its insurance coverage, provided that such coverage complies with the requirements of this agreement.
Insurance with exclusion override clause
This clause nullifies specific exclusions that could impact the agreement.
Any exclusions in the required insurance policies that would limit coverage for obligations under this agreement shall be deemed void. The insuring party must ensure compliance with this provision.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.