Certificate of Insurance vs. Endorsements: Key Insights

Understanding Insurance Documents: A Necessity for Employers

If you’re an employer working with contractors, vendors, or third-party service providers, you likely encounter terms like Certificate of Insurance (COI) and endorsements frequently. However, they serve distinct purposes in protecting your business. But do you know if a COI is enough, or should you request an endorsement? This blog will break down the key differences between COIs and endorsements, explore their significance, and provide actionable steps for employers.

What is a Certificate of Insurance (COI)?

A Certificate of Insurance is a document issued by an insurer summarizing that a business or individual has active coverage. It provides crucial details such as:

• Policyholder’s name
• Types of coverage (e.g., general liability, workers’ comp, auto)
• Policy limits and effective dates
• Insurer’s contact information

Why does it matter? Requesting a COI before hiring a third party confirms that they have the necessary coverage, thereby reducing liability risks for your business.

Understanding Endorsements (Policy Modifications)

An endorsement, also known as a rider, is a modification to an existing policy that can add, remove, or alter coverage terms. Common types of endorsements include:

• Increasing policy limits
• Adding an additional insured (e.g., listing the employer on the contractor’s policy)
• Expanding protection to cover new risks

Endorsements are critical because they ensure the coverage aligns with specific needs, especially when additional protection is required beyond the standard policy.

COIs vs. Endorsements: Key Differences

To easily grasp the differences between COIs and endorsements, consider the following:

• A COI serves as proof of existing insurance but does not change policy terms.
• An endorsement legally modifies a policy to add or remove coverage.

Employer Best Practices

Here are some actionable steps employers should take to ensure proper coverage:

• Always request a COI before engaging contractors or vendors.
• Review COI details carefully, verifying policy limits and expiration dates.
• If additional coverage is needed, request an endorsement to ensure proper protection.

Understanding the role of COIs and endorsements in business contracts is vital. A COI confirms coverage, but an endorsement ensures the coverage meets specific needs. We encourage you to review your insurance requirements carefully and consult with a qualified insurance professional before hiring third parties.