How to Determine Insurance & Bond Requirements
Vendors that do business in cities and municipalities are typically required to provide evidence of having adequate insurance and bond coverage. This will need to be provided to the city, where you plan to do business, before you can start work or provide services in the city. Cities typically have the same or similar insurance and bond requirements. You can determine insurance and bond requirements by contacting the city or municipality administrator.
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Instructions
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Insurance Requirements
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1
Contact a local insurance agent or any insurance company located within the state and purchase a required insurance policy. You will need to purchase a Commercial General Liability policy, an Automobile Liability policy or a Workers' Compensation policy. A specific amount of coverage may also be required depending on the state.
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Obtain a copy of the Certificate of Insurance from your agent or the insurance company. A certificate can be printed at the agent's office or it can be mailed to you from the insurance company.
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Verify that it has the full name and address of the city named as an additional insured, if applicable, on a Commercial General Liability policy and an Automobile Liability policy.
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Verify that the Certificate of Insurance also has the signature of the agent or an authorized representative of the insurance company on the document.
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Provide the Certificate of Insurance to the city as proof that you have proper insurance coverage.
Bond Requirements
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Contact a local insurance agent or any insurance company located within the state and purchase a required bond. You will need to purchase the type of bond required for your type of business or activity. This can include a performance bond, payment bond or warranty bond. These types of bonds are known as surety bonds.
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Obtain a certificate of purchase from the agent or insurance company.
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Provide the certificate of purchase to the city or municipality as proof that you have fulfilled the bond requirement.
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Tips & Warnings
Go to the city's website or contact the city administrator via telephone to see what the insurance and bond requirements are for doing business as a vendor within the city.
The typical amount or limit of Commercial General Liability coverage that needs to be purchased is $1,000,000.
A surety bond is used to ensure the terms of a contract are fulfilled.
Failure to purchase insurance or a bond can lead to a fine and the inability to due business in the city.
