Supplier Insurance Requirements: A Manufacturer Checklist (2026)

Supplier insurance requirements for a product brand come down to four asks you write into the supply agreement: require your manufacturer or supplier to carry product liability coverage, get your brand named additional insured by a vendors endorsement, lock in indemnification for defects, and verify the certificate against the actual policy. Each ask decides who pays when a product you sold injures a customer, and by default that bill lands on you as the seller.

Here is the clause-by-clause checklist, the limits to require, and the coverage you still carry on your own.

What insurance should I require from my manufacturer?

Start with product liability coverage on the goods your manufacturer makes for you, then build the other three asks around it. Get your brand named additional insured through the vendors endorsement, so you're covered under the supplier's policy instead of just listed on a certificate. Add a mutual indemnification clause for defects, and demand a certificate of insurance you can verify against the actual policy. These four supplier insurance requirements decide who absorbs a customer-injury claim.

Treat each as a term you negotiate, not boilerplate you skim past. Here's what to confirm on each ask and the wording to write into the agreement.

This checklist covers the factory you buy from. The fulfillment warehouse that ships your orders runs on a separate set of clauses, so for that side see the 3PL contract insurance terms checklist. These vendor insurance terms also sit apart from your own program, the ecommerce insurance you carry as the seller of record regardless of what the factory holds.

What does being additional insured on my supplier's policy cover?

Being named additional insured on a supplier's policy through the vendors endorsement (ISO form CG 20 15) covers your brand only for bodily injury or property damage arising out of the supplier's product. It does not cover your own relabeling, repackaging, sole negligence, or marketing claims. That gap is exactly why you still carry your own product liability insurance.

The common assumption is that the supplier's additional-insured slot fully protects the brand once you "get named additional insured." A vendors endorsement is narrower than that. It extends the manufacturer's policy to you as the seller, but only for a defect in the goods the manufacturer made. It works the same way an additional insured endorsement does in reverse, when you add a retailer to your own policy.

The form carries built-in exclusions. CG 20 15 drops coverage for your own relabeling, repackaging, failure to inspect, and unauthorized warranties. It also won't respond to a claim that arises from your sole negligence. So if your brand relabels, repackages, or kits the product, the endorsement can fall away on the exact claim you most need it for.

You're still exposed regardless. Under strict products liability, a commercial seller in the chain of distribution answers for a defect even one it didn't make (Cornell LII). That's why you keep your own product liability insurance. When you write the clause, name CG 20 15 by form number. A generic "additional insured" request often produces CG 20 10 or CG 20 33, which are premises-and-operations forms that won't respond to a product-defect claim.

How much product liability should I require from a supplier?

Require at least $1M per occurrence and $2M aggregate in product liability from a supplier, stepping up to $2M/$4M for higher-risk goods like supplements, cosmetics, food, and children's products. Match the limit to the floors your sales channels already set. Walmart requires $1M/$2M once a seller passes $100,000 in sales, and Amazon requires $1M once monthly proceeds top $10,000.

Set the floor by how much harm the product could cause, then let your highest sales-channel requirement pull it up.

The marketplace floors are the part founders miss most often. Walmart already demands $1M/$2M in general and product liability once a seller crosses $100,000 in twelve-month sales. Amazon's Business Solutions Agreement requires at least $1M per occurrence once monthly proceeds exceed $10,000. If your own program has to hit those numbers, your supplier's should too.

For example, a supplements brand selling on Walmart already carries $1M/$2M, so requiring the same from the co-packer that makes its capsules is the floor, not a stretch. For anything ingestible, $2M/$4M is the more realistic ask. Match the supplier's limit to your own so neither side is the weak link. The product liability additional insured status you negotiate is only as good as the limit standing behind it.

What if my manufacturer is overseas?

If your manufacturer is overseas, treat its insurance and indemnity promise as a backstop you probably cannot collect on, and carry your own US product liability policy. Under US law the importer is treated as the manufacturer, and there is no US-China treaty to enforce a US judgment against a foreign factory. The brand becomes the deep pocket a plaintiff actually reaches.

Picture the chain when a claim hits. A customer in Ohio is injured by a product you sold. They sue the party they can actually serve and collect from, which is your US brand sitting in the chain of distribution. Say you win a judgment against the overseas factory anyway, and now you have to enforce it abroad. According to Harris Sliwoski, Chinese courts do not enforce US judgments, so a US judgment against a Chinese factory is often uncollectable in practice.

Many overseas factories also sign an insurance clause and never carry US-admitted coverage, so the additional-insured slot you negotiated points at a policy that does not exist where you need it. The asks still belong in the contract, but assume they may be worth nothing when a claim lands, and price the risk into your own program.

How that changes what you require depends on where the supplier sits.

Supplier trouble does not stop at injury claims. A factory that goes under or a shipment seized at the border is a different problem, and that is where supply chain disruption insurance picks up where a liability policy leaves off.

How do I verify the coverage and lock it into the contract?

Verify a supplier's coverage by demanding the actual endorsement alongside the certificate. A certificate of insurance proves a policy existed on a date and confers no coverage rights by itself, per the Texas Department of Insurance. A certificate holder is not the same as an additional insured. Ask for the vendors endorsement by form number, confirm the indemnification clause sits in the policy, and re-verify at every renewal.

Coverage can lapse or change quietly between renewals, so a one-time check on signing day tells you nothing about the policy in force when a claim lands. Run these four steps before you trust the paperwork:

• Get the certificate from the supplier's broker, not the sales rep who wants the deal closed.
• Confirm the additional-insured or vendors endorsement is attached and identified by its form number.
• Confirm the waiver of subrogation and the primary and non-contributory language are both on the policy.
• Re-verify at each renewal, since limits and endorsements shift without anyone telling you.

The indemnification clause matters just as much. The duty to defend is broader than the duty to indemnify, and it's triggered by the allegations in a claim. So the supplier picks up your defense as suits arise, not only after fault is settled. (An indemnity is also only as good as the insurance behind it, which is the whole problem with an uncollectable overseas factory.)

Coverwatch works the buyer's side of these contracts, benchmarking the supplier's limits and endorsements against what the product is actually worth. The one thing to do today: pull your supply agreement, find the insurance and indemnification clauses, and check them against this list before you sign or renew. Then fold that check into your annual insurance audit so it happens every year.