Here’s something to think about. Most business owners perfectly understand who their vendors are. What’s less obvious, but far more important for commercial insurance, is how these vendors operate inside your business. At Commercial One Insurance Service, serving the Burlingame, CA area, we regularly see insurance exposure driven not by big decisions, but by often overlooked vendor details.
Control Matters More Than the Contract
If something happens, many business owners are shocked to realize their insurance doesn’t just look at who performs the work; it looks at who controls it. If your business sets the schedule, directs how tasks are done, oversees day-to-day activity, or even just provides the tools necessary, that vendor may not be viewed as fully independent, and that often affects your liability and whose insurance will have to cover it.
And that holds even if a vendor is clearly “external.” Operation control can blur responsibility, and that distinction matters when insurance carriers evaluate liability following an incident.
Why Occasional Vendors Are Often the Biggest Blind Spot
Ironically, vendors who show up the least often create the biggest exposure. Think IT support, specialty maintenance, or seasonal service providers. Because they’re not part of your daily operations, they’re frequently ignored when it comes to ensuring proper insurance protection is in place.
But infrequent doesn’t mean low impact. These vendors often:
- Operate without a clear and updated agreement
- Work unsupervised or after hours
- Use their own equipment on your premises
That combination can be deadly when it is necessary to figure out responsibility when something goes wrong.
The Common Assumption That Trips Businesses Up
But the biggest danger is complacency. Many business owners simply assume a vendor’s insurance will automatically pick up the bill for any damage caused by the vendor. It doesn’t, at least not by default. How control, frequency, and access are structured determines whether that assumption holds.
Reach out to Commercial One Insurance Service, serving Burlingame, CA, to protect your business. Our knowledgeable advisers will walk you through the important factors that may affect your protection.
