Collecting Certificates of Insurance from Vendors

Certificate of Insurance

Collecting Certificates of Insurance from Vendors

When running a sports organization, managing vendor relationships is a key part of operations. From event-day concessions to on-site security, vendors provide essential services that help ensure smooth operations and positive experiences for attendees. However, alongside these benefits comes risk — and that’s where Certificates of Insurance (COIs) become vital.

Understanding how and why to collect COIs from vendors is critical to protecting your organization from potential liability. In this guide, we’ll break down the importance of collecting insurance documentation, explore real-world examples of vendor-related claims, and outline the types of insurance vendors should carry to mitigate risk.

Why Vendors Need to Provide Certificates of Insurance

Sports organizations regularly partner with a wide variety of vendors. These can include:

  • Security teams
  • Broadcasting crews
  • Food and beverage providers
  • Merchandise and team gear sellers
  • Event photographers
  • Equipment rental companies

Whether vendors are present during the regular season or special tournaments, their activities expose the hosting organization to liability. If a vendor’s operations cause injury or property damage, the sports organization can be named in a lawsuit — even if it wasn’t directly involved in the incident.

In many cases, vendors work on-site and interact directly with the public. This increases the risk of accidents that could result in claims such as:

  • Bodily injury
  • Property damage
  • Personal injury
  • Advertising injury

Requiring vendors to carry General Liability insurance — and to provide evidence of this coverage via a Certificate of Insurance — offers a legal buffer that can help reduce or eliminate the financial impact of these claims.

Real-Life Claims: How Vendor Operations Lead to Lawsuits

To better understand the risks, consider the following real-world examples of claims that have arisen from vendor actions:

Bodily Injury Claims

  • A customer gets food poisoning from a contaminated concession item.
  • A spectator breaks a tooth after biting a foreign object in stadium food.
  • A display booth collapses during an event, injuring passersby.
  • An unsecured extension cord causes a slip-and-fall accident.
  • A child chokes on a promotional item at home.
  • Alcohol served to an intoxicated patron leads to a drunk driving accident.
  • A player collides with a photographer who is standing in an unauthorized area, resulting in injury.

Property Damage Claims

  • A vendor’s faulty electrical setup sparks a fire, destroying part of the venue.
  • A security guard gives incorrect parking instructions, resulting in a vehicle collision.

Personal & Advertising Injury Claims

  • A patron is falsely detained by security under suspicion of starting a fight.
  • A vendor makes defamatory statements about another vendor, prompting a lawsuit.
  • A shopper is held for questioning after being falsely accused of theft.

These examples illustrate how vendor actions can unintentionally lead to costly legal consequences for sports organizations — reinforcing the importance of collecting and verifying proper insurance.

What Is a Certificate of Insurance (COI)?

A Certificate of Insurance is a document issued by an insurance provider that verifies a vendor has an active insurance policy. It includes key information such as:

  • Policy type
  • Coverage limits
  • Effective and expiration dates
  • Policyholder details
  • Insurance carrier’s rating
  • Additional insured parties (if applicable)

COIs act as proof of coverage and are essential in the vetting process for third-party vendors. Without one, your organization might be exposed to financial liability from lawsuits or claims resulting from a vendor’s negligence.

General Liability Insurance: The Minimum Requirement

At a minimum, all vendors should carry General Liability insurance and provide a valid COI before beginning work. Here’s what to look for:

  • Insurance Carrier Rating: The insurer should have at least an A- rating from AM Best to ensure financial stability and credibility.
  • Coverage Limits:
    • Each Occurrence: At least $1,000,000
    • General Aggregate: At least $2,000,000
    • Products-Completed Operations Aggregate: At least $1,000,000

Additionally, the policy should name both the sports organization and the facility owner as “Additional Insured” parties. This extension ensures that your organization benefits from the vendor’s coverage in case of a lawsuit.

Tip: Make sure the policy period covers the full duration of the vendor’s services, including setup and takedown days.

Additional Insurance Requirements for Higher-Risk Vendors

Some vendors pose more significant risks than others. In these cases, additional types of insurance coverage should be required.

1. Workers’ Compensation Insurance

For vendors with three or more employees, require proof of Workers’ Compensation insurance, which includes:

  • Statutory benefits for the state in which services are provided
  • Employers’ Liability Limits:
    • $100,000 per accident
    • $500,000 disease – policy limit
    • $100,000 disease – per employee

This ensures that injuries to vendor employees on-site don’t become your organization’s responsibility.

2. Liquor Liability Insurance

Vendors serving alcohol must carry Liquor Legal Liability coverage with a limit of at least $1,000,000. This protects against claims stemming from over-service or serving underage or intoxicated patrons.

3. Automobile Liability Insurance

If a vendor is using vehicles as part of their setup or display, they should provide Auto Liability insurance for:

  • Owned
  • Non-owned
  • Hired vehicles

The minimum required limit is typically $300,000 combined single limit for bodily injury and property damage.

Best Practices for Collecting and Managing COIs

To streamline your insurance compliance process, consider implementing the following practices:

  • Request COIs early: Make this a required step before any vendor is allowed on-site.
  • Track expiration dates: Use a COI management system or spreadsheet to track policy validity.
  • Verify policy terms: Check that coverage amounts meet your requirements and that your organization is named as an Additional Insured.
  • Reassess annually: Update insurance requirements regularly based on changing risks or legal standards.
  • Centralize documentation: Keep digital copies of all COIs in a shared, secure folder accessible to relevant staff.

Final Thoughts

Requiring and verifying Certificates of Insurance from all vendors is not just a best practice — it’s a critical risk management strategy. In today’s litigious environment, failing to secure proper insurance documentation can expose your sports organization to unnecessary and avoidable liability.

By clearly outlining insurance expectations and collecting documentation in advance, your organization can protect itself, comply with venue and regulatory standards, and maintain professionalism in all vendor relationships.