Certificate of Insurance vs. Endorsements: Key Employer Guidelines in Massachusetts

When Massachusetts businesses hire subcontractors or independent contractors, they routinely request a certificate of insurance (COI) to verify that the contractor carries adequate coverage. But a COI alone may not provide the protection you think it does. Understanding the difference between a certificate of insurance and a policy endorsement is essential for managing your risk.

What Is a Certificate of Insurance?. A certificate of insurance is a summary document that confirms the existence of an insurance policy. It typically shows the policyholder's name, the insurer, policy number, coverage types, limits, and effective dates. A COI is not a contract — it provides no guarantee of coverage and does not confer any rights to the certificate holder beyond what is stated in the policy itself.

The Limitation of Certificates.. A certificate of insurance can be issued by a broker or agent without the insurer's direct involvement and can sometimes contain inaccuracies. A policy can be cancelled, and the certificate holder may not receive timely notice. Holding a COI does not mean you are covered under the contractor's policy.

What Is an Additional Insured Endorsement?. An additional insured endorsement modifies the contractor's insurance policy to extend coverage to another party — typically the hiring company. Being named as an additional insured means you are actually covered under the contractor's policy for claims arising from the contractor's work. This is a meaningful protection that a certificate alone does not provide.

Why You Need Both.. As a Massachusetts employer or general contractor, you should require both: a certificate of insurance to verify that coverage exists, AND an additional insured endorsement that names your business on the contractor's policy. The endorsement is what actually protects you.

Waiver of Subrogation.. Another key endorsement to require is a waiver of subrogation. This prevents the contractor's insurer from suing your business to recover claim payments, even if your actions contributed to the loss.

AMD Insurance Group works with Massachusetts businesses to structure contractor management programs and ensure they have the right protections in place. Contact us for guidance.