Megan Stevens

Certificate of Insurance vs. Endorsements: Essential Guide

Understanding the Basics: COI and Endorsements

For employers working with contractors, vendors, or third-party service providers, understanding insurance documentation is crucial. Two terms you might frequently encounter are Certificate of Insurance (COI) and endorsements. They serve different purposes and can impact the level of protection you have against potential risks and liabilities. 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, explain why each matters, and provide actionable steps for employers.

What is a Certificate of Insurance (COI)?

A COI is a summary document issued by an insurer that verifies a business or individual has active insurance coverage. It typically includes: - The policyholder’s name - Types of coverage (e.g., general liability, workers’ comp, auto) - Policy limits and effective dates - The insurer’s contact details Requesting a COI before hiring a third party ensures that they have the necessary coverage, reducing your liability risks.

Understanding Insurance Endorsements

An endorsement, also known as a rider, is a modification to an existing insurance policy that adds, removes, or alters its terms. Common examples include: - Increasing policy limits - Adding an additional insured, such as listing the employer on the contractor’s policy - Expanding protection to cover new risks Endorsements ensure that coverage aligns with your specific needs, especially when additional protection is required beyond a standard policy.

Key Differences at a Glance

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

Employer Best Practices

To ensure proper coverage when working with third parties: 1. Always request a COI before engaging contractors or vendors. 2. Carefully review COI details, checking policy limits and expiration dates. 3. 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, but an endorsement ensures that coverage meets specific needs. Carefully review your insurance requirements and consult with a qualified insurance professional before hiring third parties.