Understanding Certificates of Insurance (COIs) and Endorsements

Employers working with contractors, vendors, or third-party service providers often encounter the terms Certificate of Insurance (COI) and endorsement. While these terms may be familiar, they serve different purposes. Understanding these differences is crucial for protecting your business from potential risks and liabilities. Do you know if a COI is enough, or should you request an endorsement? This blog aims to break down the key differences between COIs and endorsements, explain their importance, and provide actionable steps for employers.

What is a Certificate of Insurance (COI)?

A Certificate of Insurance (COI) is a summary document issued by an insurer confirming that a business or individual has active coverage. It typically includes essential details such as:

• Policyholder’s name
• Coverage types (general liability, workers’ comp, auto, etc.)
• Policy limits and effective dates
• Insurer’s contact details

Requesting a COI before hiring a third party ensures that the business has the necessary coverage in place, reducing liability risks.

What is an Endorsement (Policy Modification)?

An endorsement, also known as a rider, is a modification to an existing policy that adds, removes, or alters coverage terms. Common examples 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 ensure coverage aligns with specific needs, especially when additional protection is required beyond the standard policy provisions.

Key Differences Between COIs and Endorsements

Understanding the differences between COIs and endorsements is essential:

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

Employer Best Practices

Employers should follow these steps to ensure proper coverage:

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

Understanding COIs and endorsements in business contracts is vital. A COI confirms coverage exists, while an endorsement ensures that coverage meets specific needs. Employers are encouraged to review their insurance requirements carefully and consult with a qualified insurance professional before hiring third parties.