COI vs. Endorsements: Key Insights for Employers

Introduction

For employers working with contractors, vendors, or third-party service providers, understanding the terms Certificate of Insurance (COI) and endorsement is crucial. While these terms are often encountered, they serve distinct purposes. Understanding these differences is key to 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 why each matters, and offer 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 has active 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

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

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 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 are essential because they ensure your coverage aligns with specific needs, especially when additional protection is required beyond what the standard policy provides.

Key Differences Between COIs and Endorsements

To make it easy to grasp the differences:

• 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 take the following 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 COIs and endorsements in business contracts is vital. A COI confirms coverage, while an endorsement ensures coverage meets specific needs. Employers should review their insurance requirements carefully and consult with a qualified insurance professional before hiring third parties.