Understanding COIs and Endorsements

For employers working with contractors, vendors, or third-party service providers, understanding the terms "Certificate of Insurance" (COI) and "endorsement" is critical. While these terms are often encountered, they serve distinctly different purposes. Protecting your business from potential risks and liabilities requires understanding these differences. 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, clarify 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, confirming that a business or individual holds active insurance coverage. Key details typically found in a COI include: - Policyholder’s Name - Coverage Types (general liability, workers’ comp, auto, etc.) - Policy Limits and Effective Dates - Insurer’s Contact Details Why does this matter? Requesting a COI before hiring a third party ensures they have the coverage necessary to lessen liability risks for your business.

Understanding Endorsements (Policy Modifications)

An endorsement, also known as a rider, modifies an existing policy by adding, removing, or altering coverage terms. Common examples 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 ensure that coverage aligns with specific needs, especially when additional protection is required beyond what the standard policy provides.

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 or remove coverage.

Employer Best Practices

To ensure proper coverage, consider these actionable steps: - 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 role of COIs and endorsements in business contracts is vital. While a COI confirms existing coverage, an endorsement ensures that policies meet specific requirements. Always review your insurance needs carefully and consult with a qualified insurance professional before hiring third parties.