What municipalities require of contractors: public works insurance specifications and how a contractor proves it meets them

What a city or county requires before a contractor is awarded public work

QUICK ANSWER

A municipal public works contract typically requires general liability of $1M per occurrence and $2M aggregate, often more on larger projects, with the city, its officials and employees as additional insureds on a primary and non-contributory basis for ongoing and completed operations, a waiver of subrogation on every policy, commercial auto of $1M combined single limit, statutory workers' compensation with $1M employers' liability, an umbrella of $2M to $10M, and performance and payment bonds for the contract amount.

Reviewed by Michael LaBarbera, Licensed property & casualty agent, Provident Financial Group · Reviewed Oct 11, 2026 Updated Oct 14, 2026

Typical requirements and how to check them
Requirement	What they usually ask for	How to check what you have
Commercial general liability	$1M each occurrence / $2M aggregate as a floor, $2M / $4M or per-project aggregates on road, utility and building projects, on an occurrence form with no exclusion for the work; explosion, collapse and underground coverage where excavation is involved	Dec page limits and the exclusions page; confirm the XCU (explosion, collapse, underground) coverage is not excluded for utility and road work.
Additional insured: the public entity and its people	The city or county, its elected officials, officers, employees, agents and volunteers as additional insureds for ongoing and completed operations, primary and non-contributory	An additional insured form that covers the individuals as well as the entity, often ISO CG 20 10 and CG 20 37 with the public-entity wording or a manuscript form; many blanket forms cover organizations only, which fails the spec.
Waiver of subrogation	In favour of the public entity on general liability, auto, workers' compensation and umbrella	Waiver endorsement on each policy.
Commercial auto	$1M combined single limit on any auto, with MCS-90 or hazardous materials coverage where the work hauls them	Auto dec page symbol and limit; the MCS-90 endorsement where federal motor carrier rules apply.
Workers' compensation and employers' liability	Statutory for the project state plus employers' liability of $1M / $1M / $1M, with a waiver; some specs require coverage under the state fund where the state has one	Information page with the project state, Part Two limits and the waiver endorsement.
Umbrella or excess liability	$2M to $10M following form over general liability, auto and employers' liability, scaled to the contract value and the public's exposure	Umbrella dec page and underlying schedule; confirm it follows form on additional insured status and completed operations.
Performance and payment bonds	100% of the contract amount for each bond on projects above the state's statutory threshold, issued by a surety authorized in the state	Bond forms from the surety naming the public entity as obligee; bonds are credit instruments, not insurance, and underwriting depends on the contractor's financials.
Pollution and railroad protective where the work requires	Contractors' pollution liability for excavation, demolition and remediation; railroad protective liability when work is within a railroad right of way	A pollution policy or endorsement; a railroad protective policy purchased in the railroad's name for the project.
Certificate specifics	Certificate and endorsements delivered before notice to proceed, naming the exact entity and the project or contract number, with thirty days' notice of cancellation to the city	Certificate description-of-operations box with the project reference; the endorsement copies attached, which most public agencies require rather than the certificate alone.

Requirement

What they usually ask for

How to check what you have

Commercial general liability

$1M each occurrence / $2M aggregate as a floor, $2M / $4M or per-project aggregates on road, utility and building projects, on an occurrence form with no exclusion for the work; explosion, collapse and underground coverage where excavation is involved

Dec page limits and the exclusions page; confirm the XCU (explosion, collapse, underground) coverage is not excluded for utility and road work.

Additional insured: the public entity and its people

The city or county, its elected officials, officers, employees, agents and volunteers as additional insureds for ongoing and completed operations, primary and non-contributory

An additional insured form that covers the individuals as well as the entity, often ISO CG 20 10 and CG 20 37 with the public-entity wording or a manuscript form; many blanket forms cover organizations only, which fails the spec.

Waiver of subrogation

In favour of the public entity on general liability, auto, workers' compensation and umbrella

Waiver endorsement on each policy.

Commercial auto

$1M combined single limit on any auto, with MCS-90 or hazardous materials coverage where the work hauls them

Auto dec page symbol and limit; the MCS-90 endorsement where federal motor carrier rules apply.

Workers' compensation and employers' liability

Statutory for the project state plus employers' liability of $1M / $1M / $1M, with a waiver; some specs require coverage under the state fund where the state has one

Information page with the project state, Part Two limits and the waiver endorsement.

Umbrella or excess liability

$2M to $10M following form over general liability, auto and employers' liability, scaled to the contract value and the public's exposure

Umbrella dec page and underlying schedule; confirm it follows form on additional insured status and completed operations.

Performance and payment bonds

100% of the contract amount for each bond on projects above the state's statutory threshold, issued by a surety authorized in the state

Bond forms from the surety naming the public entity as obligee; bonds are credit instruments, not insurance, and underwriting depends on the contractor's financials.

Pollution and railroad protective where the work requires

Contractors' pollution liability for excavation, demolition and remediation; railroad protective liability when work is within a railroad right of way

A pollution policy or endorsement; a railroad protective policy purchased in the railroad's name for the project.

Certificate specifics

Certificate and endorsements delivered before notice to proceed, naming the exact entity and the project or contract number, with thirty days' notice of cancellation to the city

Certificate description-of-operations box with the project reference; the endorsement copies attached, which most public agencies require rather than the certificate alone.

What the public entity is protecting

A city or county is spending public money and exposing the public to construction. Its specification protects the entity and the individuals who act for it, demands evidence rather than assurances, and adds bonds so the project is finished and the subs are paid if the contractor fails. The insurance exhibit is usually a standard document reused across contracts, so the limits reflect the entity's policy rather than the size of the job.

The lines a public works contract names

General liability with the entity and its people added, read on its exclusions for XCU and the work type. Waivers on every policy. Auto, often with federal motor carrier endorsements. Workers' compensation in the project state. An umbrella scaled to contract value. Performance and payment bonds above the statutory threshold. Pollution and railroad protective coverage where the work calls for them. And a certificate package that names the exact entity and project with the endorsements attached.

How to check your policies against the specification

Match the general liability limits, confirm XCU is not excluded, and read the additional insured form for whether it covers individuals. Confirm the waiver on each policy. Match auto, workers' compensation and the umbrella's underlying schedule. Confirm bond capacity with your surety before bidding. Assemble the certificate with the project reference and the endorsement copies the spec lists.

Keep the certificate current

Public agencies require the certificate before notice to proceed and at every renewal through final acceptance and the warranty period. A live certificate link stays current as policies renew, carries the endorsements as attachments and notifies the agency when a line changes.

Questions people actually ask

Why does the city want copies of the endorsements and not just a certificate?

Because a certificate is an information document that confers no rights. Public agencies read the actual additional insured, primary and waiver endorsements to confirm the coverage exists, and reject certificates that arrive without them.

Our blanket additional insured form covers organizations. The spec names officials and employees. Is that a problem?

Often yes. Public-entity specs want the individuals covered too, and many blanket forms cover only entities that require it by contract. Ask the carrier for the public-entity additional insured form or a manuscript endorsement.

What is XCU coverage and when does a municipality ask for it?

Explosion, collapse and underground property damage coverage, which some general liability policies exclude for contractors. Road, utility and site work specs ask for it because that is exactly the damage excavation causes.

Are performance and payment bonds insurance?

No. They are surety credit backed by your financials, and the premium is a fee for the guarantee. Bond capacity is a separate conversation from insurance and worth starting before you bid public work.