The Manufacturer Named Her Boutique an Additional Insured. Repackaging the Product Erased the Endorsement Anyway.

8 min read · Last updated August 17, 2026

In this article

• What a vendors endorsement actually promises
• The exclusion that erased it
• Every other way the endorsement can fail
• A federal court has already ruled on this
• What to check before you touch the box

Meera Chandran has run Terra & Table, a small online store that resells ceramic bakeware made by a third-party manufacturer, for four years. The manufacturer’s commercial general liability (CGL) policy, the standard liability coverage a business carries for claims a customer brings against it, named Terra & Table as an additional insured through a vendors endorsement, so when a customer filed an $85,000 lawsuit over a handle that failed in a hot oven and caused second-degree burns, Meera assumed the manufacturer’s insurer would defend her too. It did not. Terra & Table had moved the bakeware sets out of the manufacturer’s plain shipping cartons and into its own branded gift boxes with a printed care card before listing them for sale, and that single decision is what took the endorsement off the table.

What a vendors endorsement actually promises

An additional insured is a person or business added to someone else’s policy, at that policyholder’s request, so a claim against the additional insured can be paid under the original policy instead of forcing them to rely only on their own coverage. The National Association of Insurance Commissioners (NAIC) describes an endorsement, also called a rider, as something that “adds, deletes, excludes or changes insurance coverage” on an existing policy, and a vendors endorsement is exactly that: a change to the manufacturer’s CGL policy that adds a retailer as an insured, but only for claims tied to the manufacturer’s own product.

The actual ISO form, CG 20 15, Additional Insured – Vendors, says the vendor is added as an insured “with respect to ‘bodily injury’ or ‘property damage’ arising out of ‘your products’… which are distributed or sold in the regular course of the vendor’s business.” That is a narrower promise than it sounds. The retailer is covered for selling the product exactly as the manufacturer made it. It is not a blanket liability policy standing in for one the retailer never bought.

The exclusion that erased it

Section B of CG 20 15 lists eight things that end the endorsement outright, and repackaging is one of them by name. The form excludes:

Terra & Table did not unpack the ceramic sets to inspect or test them. It unpacked them to move the product into new, store-branded boxes with its own printed insert, which is repackaging in the plain sense the form means, and it never went back into the manufacturer’s original container. The narrow exception in the clause, unpacking solely for inspection and then returning the product to its original box, does not reach a retailer that repackages for its own retail presentation. Once that happened, the manufacturer’s insurer had grounds to treat the vendor endorsement as if it had never applied to this claim at all, and it did.

Every other way the endorsement can fail

Repackaging is one exclusion of eight. A retailer can lose vendor coverage the same way by printing its own product claims, changing the product itself, or handling anything the manufacturer was supposed to handle.

Even a claim that survives every exclusion is capped. Section C of the endorsement caps the payout at “the amount of insurance required by the contract or agreement” or the policy’s available limits, whichever is less, and states plainly that “this endorsement shall not increase the applicable Limits of Insurance.” A vendor never gets more protection than the manufacturer’s contract promised, and once an exclusion applies, the vendor gets none at all rather than a reduced amount.

A federal court has already ruled on this

Courts have drawn the same line between a passive reseller and a vendor who did more. In Hartford Fire Insurance Co. v. St. Paul Surplus Lines Insurance Co., 280 F.3d 744 (7th Cir. 2002), a distributor supplied a diet-pill manufacturer with the product’s formula and designed the warning label the manufacturer printed on the bottle. When a consumer sued over an inadequate warning, the distributor’s own excess insurer argued the manufacturer’s vendors endorsement should have covered the claim first. The Seventh Circuit disagreed, applying the majority rule that a vendor’s endorsement is inapplicable if the vendor, by participating in creating the product or by altering or repairing it, may be responsible for the defect the lawsuit is actually about. The court explained why insurers write the form this narrowly in the first place: it would be improbable to assume a manufacturer’s insurer meant “to protect others against the risks that others create.”

Meera’s gift boxing is not label design, but the underlying test is the same. The endorsement protects a retailer for selling the product exactly as it arrived. It stops protecting that retailer the moment the retailer’s own actions become part of the story a plaintiff tells.

What to check before you touch the box

Before repackaging, relabeling, or adding your own care instructions to a product you resell, get the manufacturer’s vendors endorsement in writing and read the exclusions yourself rather than assuming additional insured status means blanket coverage. If your business model requires repackaging, that is a conversation to have with your own insurance agent before you list the product, not after a claim arrives, because your own commercial general liability or business owner’s policy is what actually responds once the vendor endorsement steps aside. That gap is getting more expensive to fall into: U.S. casualty rates excluding workers’ compensation rose 11% in the second quarter of 2026, according to Marsh’s Global Insurance Market Index, even as the broader commercial market softened, which means the liability line a reseller falls back on when a vendors endorsement fails is also the line getting harder to underwrite. A product recall expense policy covers a different cost entirely, the expense of pulling and replacing inventory, so it will not substitute for the liability defense a repackaging exclusion takes away. And a warranty clause you did not write into your own contract can create the same kind of uninsured exposure that a vendors endorsement leaves behind.

Frequently asked questions

Does a vendors endorsement cover me if I repackage a product before selling it? Usually not. The standard ISO vendors endorsement excludes repackaging unless the product was unpacked solely for inspection, testing, or a manufacturer-directed part swap and then returned to its original container. Moving a product into your own branded packaging falls outside that exception.

What is the difference between being an additional insured and having my own CGL policy? Additional insured status adds you to someone else’s policy for claims tied to their product, sold as delivered. Your own commercial general liability policy covers your business’s own operations and any claim the additional insured status does not reach, including one an exclusion has erased.

Can a manufacturer’s vendors endorsement be voided by something I do after the sale? Yes. Repackaging, relabeling, printing an unauthorized warranty, altering the product, or being independently negligent can each remove the vendor’s coverage for that specific claim, even though the endorsement itself is still active for other claims involving that same manufacturer’s products.

Do I still need my own general liability insurance if I’m named as an additional insured? Yes. Additional insured status is narrower than a standalone policy and depends on facts a manufacturer’s insurer controls, like how you handled the product before selling it. Your own coverage is what actually responds once the endorsement’s exclusions take that claim off the table.

What is the “sole negligence” exclusion in a vendors endorsement? It removes coverage for injury or damage caused by the vendor’s own acts or omissions, separate from simply distributing the manufacturer’s product, such as a display that collapses or a step in an in-store demonstration that goes wrong.