Insurance certificates are the starting point, not the finish line
Every vendor contract should require the vendor to carry general liability and, where employees are involved, workers' compensation coverage, and to provide a current Certificate of Insurance before work begins. A certificate alone is not enough — it should specifically show the association listed as an additional insured, ideally on a primary and non-contributory basis, meaning the vendor's policy pays first rather than the association's own coverage being tapped alongside or instead of it. A board that files away a certificate without checking these two details has confirmed only that the vendor has some insurance, not that the association is actually protected by it.
Reading indemnification language the way it's actually written
Indemnification clauses should make the vendor responsible for damage or injury caused by its own work, equipment, or employees — but the exact wording matters enormously. A clause covering damages "arising from the vendor's negligence" is meaningfully narrower than one covering damages "arising from the vendor's work regardless of cause," and the two produce very different outcomes when something goes wrong. Boards should read this language line by line rather than assuming any indemnification clause functions the same as any other; a generic, ambiguous indemnification provision can end up interpreted against the association's interest specifically because it failed to specify the standard clearly.
Confirm the board's authority to sign this type and size of contract → obtain a Certificate of Insurance naming the association as additional insured, primary and non-contributory → read the indemnification clause for its exact triggering standard → confirm cancellation-notice requirements for the vendor's coverage → require a signed contract before work begins, not a verbal agreement.
Notice of cancellation protects against a coverage gap mid-project
A vendor's insurance can lapse or be cancelled mid-contract without the association ever finding out, unless the contract specifically requires the vendor to notify the association of any cancellation or material change in coverage. Without this clause, an association can discover — usually at the worst possible time, during a claim — that the coverage it relied on when signing no longer exists.
Contract terms beyond insurance worth checking every time
- Scope of work described specifically enough to measure whether it was completed.
- Payment terms, including any deposit and what triggers final payment.
- Term length, renewal method, and termination notice period.
- Whether subcontractors are permitted, and whether they must meet the same insurance standard.
- Dispute-resolution method specified in the contract (mediation, arbitration, or litigation).
Why a written contract matters even for a small, familiar vendor
Boards sometimes skip a formal written contract for a small or long-trusted vendor, relying instead on an informal understanding. This removes exactly the protections — insurance verification, indemnification, and a defined scope — that matter most when something does go wrong, and a familiar relationship offers no legal substitute for a signed agreement if a dispute or an injury claim eventually arises.
When to get professional help
An attorney should review any contract above a size the board considers significant, and specifically any contract with one-sided indemnification language, before signing — negotiating clearer terms before signature is far cheaper than litigating an ambiguous clause after a loss has already occurred.