Operator guide
What your certificate of insurance actually proves
Your landlord asked for a million-dollar certificate. You sent it. Everyone moved on. Here's the part nobody explains: that certificate satisfied the lease. That is a different thing from being covered.
What a certificate is
A certificate of insurance — an ACORD form, usually — is a snapshot. It says that on the day it was issued, certain policies existed, with certain limits, for certain dates. That's the whole job.
Read the fine print on the form itself and it tells you as much, in language carefully written by people who did not want to be sued: the certificate confers no rights, does not amend or extend the policy, and is issued as a matter of information only. It is a receipt, not a promise.
The certificate satisfies the lease. It doesn't mean your coverage is built for how a restaurant actually loses money.
Three things it doesn't do
It doesn't make anyone an additional insured. This is the big one. Your lease almost certainly requires the landlord be named as an additional insured. Typing their name in the certificate box does not accomplish that — only an endorsement on the actual policy does. Plenty of operators are walking around with a certificate that names the landlord and a policy that doesn't.
It doesn't survive a change. A certificate issued in March tells you nothing about whether the policy was still in force in November. If a payment was missed or coverage was restructured mid-term, the piece of paper in your landlord's file looks exactly the same.
It doesn't say anything about exclusions. A certificate shows you a limit. It shows you nothing about what's carved out beneath that limit — and for a restaurant, the carve-outs are usually where the trouble is. A $1M general liability limit with a liquor liability exclusion is a $1M limit that may do very little on the claim you're most likely to have.
The endorsements that do the real work
When a lease requires "insurance," what it usually means in practice is three specific policy endorsements. Worth confirming you actually have them:
- Additional insured. Extends your liability coverage to the landlord for claims arising out of your operations. There are several versions of this endorsement and they are not interchangeable — some cover ongoing operations only, some include completed operations, and leases often require both.
- Primary and non-contributory. Says your policy pays first and doesn't ask the landlord's policy to share. Without it, insurers argue about who goes first while everyone's lawyers bill.
- Waiver of subrogation. Stops your carrier from turning around and suing the landlord to recover what it paid. Most commercial leases require it.
Ask for copies of the endorsements, not just the certificate. If your agent sends you a certificate when you asked for endorsements, ask again.
And then the limits question
Say all of that is in order. The certificate is accurate, the endorsements are on the policy, the landlord is happy. There's still a question sitting underneath all of it, and it's the one I actually care about: is a million dollars the right number for your operation?
That number usually didn't come from an analysis of your business. It came from a lease template. For a single quick-service unit it might be generous. For a group with a heavy bar program, late-night hours, and valet, it can be thin enough to be decorative — which is what an umbrella policy is for.
What to actually do about it
Pull your lease and find the insurance section — usually a dense paragraph nobody has read since signing. Write down what it requires: limits, endorsements, notice periods. Then pull your declarations page and your endorsement list and compare the two, line by line.
Two outcomes. Either they match, and you can stop thinking about it — genuinely, a good outcome. Or there's a gap, and you'd very much rather find it now than in the first week of a lawsuit.