Understanding the Difference Between COIs and Endorsements

For employers working with contractors, vendors, or third-party service providers, understanding insurance documentation is crucial. Two important terms you may come across are Certificate of Insurance (COI) and endorsements. While similar, they serve different purposes and understanding these distinctions is vital to protect your business against potential risks and liabilities.

Do You Know if a COI is Enough?

Many employers question whether a COI alone suffices or if requesting an endorsement is necessary. This blog aims to break down the key differences between COIs and endorsements, explaining why each matters and offering actionable advice for employers to ensure robust insurance coverage.

What is a Certificate of Insurance (COI)?

A Certificate of Insurance (COI) is a summary document issued by an insurer, verifying that a business or individual holds active coverage. It typically includes the policyholder’s name, coverage types (e.g., general liability, workers' comp, auto), policy limits, effective dates, and the insurer’s contact details. Requesting a COI before hiring a third party ensures that they have the necessary coverage in place, thereby reducing the risk of liability for your business.

Understanding Endorsements (Policy Modifications)

An endorsement, also known as a rider, is a modification to an existing insurance policy that alters, adds, or removes coverage terms. Common examples include increasing policy limits, adding an additional insured (such as listing the employer on the contractor’s policy), or expanding protection to cover new risks. Endorsements ensure that coverage aligns with specific needs, especially when additional protection beyond the standard policy is essential.

Key Differences Between COIs and Endorsements

- 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 for Insurance Coverage

To ensure proper coverage, employers should: - Always request a COI before engaging contractors or vendors. - Review COI details carefully, especially policy limits and expiration dates. - If additional coverage is needed, request an endorsement to ensure comprehensive protection. Understanding the nuances of COIs and endorsements is vital when managing business contracts. While a COI confirms coverage, an endorsement makes sure the coverage meets specific needs. Employers should review their insurance requirements carefully and consult a qualified insurance professional before hiring third parties to ensure adequate protection.