Liability for co-lo tenants -- non-technical question

[Eric Brunner-Williams in Portland Maine]

Howdy all,

My shop (day job) is undergoing a series of major network engineering events,
and being risk adverse, I decided to put several 1U boxen in a competitor's
co-lo to run several applications -- a jvm platform, a bind platform, and an
http plaform -- on a Netra t1 105, a Dell pe350, and an iXsystems 1350, with
Solaris 5.9, OpenBSD 3.3, and FreeBSD 5.0, resp.

To my surprise, my competitor's co-lo sales creature came back with this:

> Customer shall, prior to installation of any Customer Equipment (as defined
> in Rider B) in the Rack Space or access by Customer to the Rack Space,
> furnish Oxford with certificates of insurance which evidence minimum levels
> of comprehensive general liability insurance in an amount not less than $1
> million per occurrence for bodily injury and property damage; employer's
> liability insurance in an amount not less than $1 million per occurrence
> and workers' compensation insurance in an amount not less than that
> required by applicable law.  Prior to installation of any Customer
> Equipment in the Rack Space, Customer shall cause XXXXXX to be named as an
> additional insured.

Does anyone have any experience that suggests a) that this serves some real
purpose, and that b) shows some real application of CGLI to a co-lo operator.

Thanks in advance, and I'll summarize responses sent off-list
Eric