Certificate of Insurance vs. Endorsements Explained

Protecting Your Business: Navigating Insurance Documents

If you're an employer dealing with contractors, vendors, or third-party service providers, understanding insurance documents is vital to safeguarding your business. Often, you'll encounter the terms Certificate of Insurance (COI) and endorsement in conversations or documents. But do you know the difference, and more importantly, is a COI enough, or should you request an endorsement?

This blog aims to 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 Certificate of Insurance (COI) is a summary document issued by an insurer that confirms a business or individual holds active coverage. It typically includes:

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

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

Understanding Endorsements (Policy Modifications)

An endorsement, or 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 you on the contractor’s policy)
• Expanding protection to cover new risks

Why it matters: Endorsements ensure coverage aligns with specific needs, especially when you need additional protection beyond what a standard policy offers.

Key Differences Between COIs and Endorsements

Understanding the differences is crucial:

• 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

Here are some actionable 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 the nuances of COIs and endorsements in business contracts is essential. Remember, while a COI confirms coverage, an endorsement ensures it meets your specific needs. Take the time to review your insurance requirements carefully and consult with a qualified insurance professional before hiring third parties.