Guides
Insurance requirements by contract type: a side-by-side guide
How AIA and ConsensusDocs construction contracts, MSAs, commercial leases, franchise agreements and federal contracts differ in the insurance they demand.
Almost every business contract with an insurance clause asks for the same core: commercial general liability, auto, workers' compensation, often an umbrella, with the other party as an additional insured. What changes by contract type is everything around that core. Construction contracts add builder's risk, completed operations and bonds; service agreements add professional, cyber and crime coverage; leases focus on the premises and property; franchise agreements protect the brand; federal contracts set regulatory floors and notice rules.
This hub compares the six contract families we cover in detail and links to the guide for each. Use it to know what to expect before the draft arrives.
The comparison at a glance
| Contract | Who usually drafts | Core lines demanded | Who is protected and how | Property side | Bonds |
|---|---|---|---|---|---|
| AIA A201-2017 / A101 Exhibit A | Owner, on AIA standard forms | CGL (occurrence, with completed operations), auto, workers' comp and employer's liability, umbrella allowed; professional and pollution if applicable | Owner, architect and consultants as additional insureds, CG 20 10 / CG 20 37 07 04 standard, primary and noncontributory | Owner buys builder's risk by default; mutual property waiver of subrogation | Performance and payment bonds if the exhibit calls for them, on AIA A312 terms |
| ConsensusDocs 200 / 750 | Owner or contractor, on ConsensusDocs forms | CGL with one year of completed operations, auto, comp and employer's liability; pollution optional | Owner protection is optional: additional insured or OCP policy, owner pays the cost | Constructor buys builder's risk by default; mutual property waiver | Optional; penal sum does not rise automatically with price increases |
| Master service agreement | Customer | CGL, auto, comp, umbrella, plus E&O, cyber or crime depending on the service | Customer as additional insured on liability lines, primary and noncontributory, waivers | Rarely; sometimes crime with customer as loss payee | Rare (sometimes a fidelity bond) |
| Commercial lease | Landlord | CGL, tenant's property and improvements, business income, comp; liquor or pollution by use | Landlord, manager and lender as additional insureds (often CG 20 11) | Tenant insures contents and improvements; landlord insures the building; mutual waiver common | Rare; security deposit or guaranty instead |
| Franchise agreement | Franchisor | CGL, comp, property, business income; auto, liquor, cyber, EPLI by concept | Franchisor and affiliates as additional insureds (CG 20 29 or blanket), primary, waivers | Franchisee insures its unit | Rare |
| Federal contract (FAR) | Contracting agency | Comp and employer's liability, general liability, auto, plus anything the schedule adds | Government protected through notice and minimums rather than additional insured status, unless the contract adds it | Government property clauses vary by contract | Miller Act bonds on construction above $150,000 |
Construction: AIA and ConsensusDocs
Construction contracts are the most detailed because the risks are physical and long-tailed. Both standard families require the contractor's CGL to cover completed operations, both allow umbrella layers to make up limits, both contain a mutual waiver of subrogation for losses covered by property insurance, and both contemplate performance and payment bonds.
They split on two points that change pricing. Under AIA's 2017 documents, the owner buys builder's risk unless the parties check the box shifting it to the contractor; under ConsensusDocs 200, the constructor buys it unless the owner directs otherwise. And AIA's Exhibit A requires the owner, architect and consultants to be additional insureds at a stated ISO standard, while ConsensusDocs leaves owner protection to an owner election between additional insured status and an Owners and Contractors Protective policy, with the owner paying any added premium. Indemnity differs too: AIA's is one-way and limited to the contractor's fault; ConsensusDocs' is mutual and comparative.
Read the provision-by-provision walk-throughs in AIA A201-2017 insurance requirements, provision by provision and ConsensusDocs 200 and 750 insurance requirements explained. If you are the contractor passing terms down, the subcontractor insurance requirements builder helps you write a subcontract exhibit that matches what you owe upstream.
Service work: the MSA
An MSA sets terms once for every future statement of work, so an insurance requirement written for a large project will apply to a small one later. Expect the liability core plus whatever matches the risk of the service: professional liability for advice and technology work, network security and privacy liability where the vendor touches customer data, and crime coverage with a clients' property extension for janitorial, staffing and bookkeeping vendors. Many of these are claims-made, so MSAs also ask for coverage to continue for several years after the term.
The negotiation points are scale (limits out of proportion to the work), scope (additional insured requests on policies that cannot provide it, such as E&O) and the interaction with the limitation of liability. See master service agreement insurance requirements, line by line for a sample clause read line by line.
Real estate: the commercial lease
Leases focus on the premises. The tenant's CGL protects the landlord for injuries arising from the tenant's use of the space, typically through an endorsement such as ISO CG 20 11. The property side is split: the landlord insures the building, the tenant insures its contents and the improvements it paid for, and a mutual waiver of subrogation keeps the two property carriers from suing each other's insureds. Business income coverage matters because rent usually continues after a loss unless the lease abates it. Detail is in insurance requirements in commercial leases.
Brands: the franchise agreement
Franchisors require coverage because plaintiffs sue the brand along with the operator. The franchisor wants to be an additional insured, often through ISO CG 20 29 (Additional Insured, Grantor of Franchise) or a blanket endorsement, with primary and noncontributory wording and waivers. The Franchise Disclosure Document summarizes these requirements and the estimated cost in Items 7, 8 and 9, but the franchise agreement is what binds. See franchise insurance: what franchisors require and why.
Government: federal contracts under the FAR
Federal contracts work differently. FAR 28.307-2 sets minimums the contracting officer requires on cost-reimbursement contracts and on fixed-price contracts that include clause 52.228-5: employer's liability of at least $100,000, general liability bodily injury of at least $500,000 per occurrence, and auto liability of $200,000 per person, $500,000 per occurrence and $20,000 property damage for U.S. operations (FAR 28.307-2, as published at acquisition.gov under FAC 2026-01). Under FAR 28.310, clause 52.228-5 goes into fixed-price contracts above the simplified acquisition threshold that require work on a government installation, and it requires written notice before work starts and a policy endorsement delaying cancellation until 30 days after notice to the contracting officer (or longer if state law requires). The Miller Act adds performance and payment bonds on federal construction contracts above $150,000 (FAR 28.102-1). These are floors; agencies routinely ask for more. See insurance requirements for government contractors, which walks through both clauses line by line.
State and local government contracts follow their own procurement rules and often look more like commercial contracts, with additional insured status for the agency.
Reading any insurance clause: a five-step method
- List every requirement. Coverage, limit, form, endorsement, rating, duration, notice and proof. Put them in the contract insurance requirements checker.
- Compare against your policies, not your certificate. A certificate of insurance summarizes; the endorsements decide whether the other party is actually covered.
- Price the gaps. Ask your broker what each missing endorsement or limit costs. Some, such as a blanket additional insured or waiver of subrogation endorsement on the CGL, are inexpensive; others, such as a comp waiver or a higher umbrella, carry real premium.
- Negotiate scale and scope. Limits proportionate to the work; additional insured status only on lines that can provide it; notice obligations you can actually meet.
- Track it. Renewal dates, certificate deadlines and completed operations periods outlive the signing. The Certificate of insurance (COI) review checklist helps if you are the party receiving certificates.
State law can override what a contract says, especially anti-indemnity statutes in construction and workers' compensation rules, so a broker and an attorney familiar with your state should review high-value terms.
Key takeaways
- The CGL, auto, workers' comp and umbrella core is nearly universal; the contract type determines what is added and how the other party is protected.
- AIA and ConsensusDocs differ on who buys builder's risk and whether the owner's additional insured status is automatic.
- MSAs add professional, cyber and crime coverage, and their insurance terms can reshape the limitation of liability.
- Leases and franchise agreements protect a landlord or brand through additional insured endorsements such as CG 20 11 and CG 20 29.
- Federal contracts rely on FAR minimums, 52.228-5 notice endorsements and Miller Act bonds rather than standard commercial endorsements.