Do You Speak COI? What You Should Know About A COI Additional Insured Endorsement

COI Management | January 10, 2023

Understanding what a Certificate of Insurance (COI) is and how to read them is vital when working with any contractor network to deliver products or services to your customers.

Companies who wish to partner with an independent contractor for their services will typically outline  certain insurance requirements in their contract, such as requiring a policyholder to list them as an additional insured to their policy, to lower their risk in the event of a negligent incident committed by the independent contractor resulting in a claim being made against the contracted company’s, (or the policyholder’s), general liability policy.

In this blog, we’ll first cover what a COI is, and then break down what you should know about a COI additional insured endorsement.

What Are Certificates Of Insurance?

A certificate of insurance (COI) is a document from an insurer, or insurance agent, that provides information about commercial insurance coverage. You may also hear it referred to as proof of insurance or certificate of liability.

The certificate includes the following information:

• Name and information of the insured
• Name and information of the insurer or the insurance carrier who provides coverage
• Name and information of the certificate holder
• Policy limits
• Effective date and expiration date or the coverage
• Type of coverage
• Other information such as additional insured

Active insurance coverage can protect your organization and shift risk  to the contractor company and their insurance carrier. But to do this, your organization’s name should be listed one the COI Additional Insured Endorsement. By extending the coverage to your organization, you add an extra layer of protection if a claim arises.

Ensure Better Coverage of a COI Additional Insured Endorsement

Most companies require their contractors to name themselves as an additional insured endorsement on their Commercial General Liability Policy (CGL).

However, to verify this, the organization may only collect the COI, confirm the amounts, and look to see the ‘additional insured’ box is checked. In many cases, this practice is not good enough to guarantee coverage.

Tips on How to Verify Coverage

While onboarding a new service contractor, follow these simple steps to ensure your contract doesn’t unintentionally invalidate your coverage.

Make a Written Agreement

Always be sure you have a written agreement with your contractor that requires you to be an additional insured on the CGL policy.

Place Agreement Under Company Name

Next, make sure the agreement is under the company’s official name. Double check that the name on the agreement matches the one on the contractor’s W9. If these are not the same, the policy may not be valid, or upheld.

Authorize the Agreement

Authorize the agreement with an official, authorized signature. Agreements can be invalidated because the individual who signed was not an authorized signer of the company.

If the contractor is a sole proprietor, they must sign themselves. If your organization is signing with another corporation or business entity, you will be able to check the Secretary of State website for a list of officers who are able to sign the agreement.

Proof Additional Insured Parties

If there are any other parties that you require to be listed as an additional insured on the certificate, make a direct contract with them.

If you follow these steps, your company can rest easy knowing that you are not the one that must pay a claim when a contractor makes a mistake or causes unforeseen damage.

Ensure Your Company’s Coverage is appropriate with PlusOne Solutions

PlusOne Solutions specializes in helping organizations with large networks of independent contractors mitigate risks through:

• Document management
• Insurance
• Background screening
• Drug testing
• Compliance with the Fair Credit Reporting Act and EEOC guidelines
• License management
• Badging/credentialing

For more information on how best to manage your contractor insurance requirements or to learn more about our insurance management services, contact us today.

Contents are provided for information purposes only and should not be construed as legal advice. Users are reminded to seek legal counsel concerning their obligations and use of PlusOne Solutions services.

About PlusOne Solutions

PlusOne Solutions has been an industry leader in the risk management field by specializing in compliance programs that meet the complex challenges of geographically dispersed contractors, vendors, and employee networks. PlusOne Solutions protects companies from possible financial, legal, and reputational risks associated with contractor and vendor relationships while creating safer work environments.