Navigating Certificates of Insurance vs. Endorsements

Understanding Key Insurance Documents

For employers working with contractors, vendors, or third-party service providers, comprehending insurance documentation is crucial. Terms like Certificate of Insurance (COI) and endorsements are commonly used but serve distinct purposes. This understanding helps protect your business from potential risks and liabilities.

Do you know if a COI is enough, or should you request an endorsement? Let’s break down these differences, explain why they matter, and provide actionable steps.

What is a Certificate of Insurance (COI)?

A Certificate of Insurance is a summary document issued by an insurer that confirms a business or individual has active coverage. Typically, a COI includes:

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

Why does this matter? Requesting a COI ensures that your contractors or vendors have necessary insurance coverage, effectively 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 adds, removes, or alters coverage 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 matter because they ensure that coverage aligns with specific needs, especially when additional protection is required beyond the standard policy provisions.

Key Differences: COI vs. Endorsement

• 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

To ensure proper coverage, employers should:

• 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 is essential for managing business contracts. While a COI confirms coverage, an endorsement ensures that this coverage meets specific needs. Employers should carefully review their insurance requirements and consult with a qualified insurance professional before engaging third parties.