What’s The Difference Between a Scheduled Endorsement and a Blanket Endorsement

As an executive of an organization that works with contractors and third party vendors on a regular basis, there are many, many insurance terms that are important to understand. While some terms may seem similar, such as blanket and scheduled endorsements, a single word can mean an entirely different type of coverage—and could represent a significant risk to your organization if not understood.

In this post, we’ll explore the differences between a blanket endorsement and a scheduled endorsement, and share the importance to your organization so you can minimize risk and empower your compliance team with the right tools, like insurance tracking services, to keep protected.

Let’s examine the two terms, what they mean, and why it matters:

Blanket Endorsement:

According to IRMI, a blanket endorsement is defined as, “An endorsement sometimes attached to liability insurance policies that automatically grants insured status to a person or organization that the named insured is required by contract to add as an insured. May apply only to specific types of contracts or entities. Also referred to as an ‘automatic additional insured endorsement.’”

To simplify, if the company has a blanket additional insured endorsement, then you will only receive the coverage you are looking for if you have a signed agreement with this company that requires you to be an additional insured. With this type of endorsement, it is critical that you have this signed agreement.

Scheduled Endorsement:

A scheduled endorsement means that if the 3rd party adds you through a scheduled endorsement, then your specific name has been given to the insurance carrier and added as an additional insured. In this situation, it is important that you ask for a copy of this endorsement so you can ensure that your name has been listed correctly.

Understanding The Differences Is Important To Your Organization

An article from IRMI explains that blanket additional insured endorsements are useful tools for preventing administrative oversights and reducing paperwork, but they also carry some risks for both the named insured and the additional insured.

“Owners and contractors requiring additional insured status should make certain the additional insured requirement is part of a written and properly executed contract, and retain copies of these contracts (as well as the certificates of insurance) for an appropriate period of time—at least 3-5 years if completed-operations coverage was required and included in the additional insured’s coverage. Further, they should stipulate in the contract insurance requirements a minimum scope of coverage to be provided to them as an additional insured.”

In summary, contractors and subcontractors using blanket additional insured endorsements to provide contractually required coverage can minimize the risks of breaching their contracts by sticking with language that has been tested, such as that provided under ISO CG 20 10, and making sure the endorsement extends the contractually required scope of coverage.

It’s incredibly important to understand the differences between these two types of endorsements, as explained above. While they’re easy to get mixed up, doing so can expose your company to significant risk. Having Lumie review your coverage requirements in real time can save your company the stress and financial costs of claims.

Reduce Errors & Keep Track Of Certificates

It can be a lot of pressure for the person in charge of certificates of insurance, especially considering how fast the insurance landscape changes on top of understanding all of the different types of policies and endorsements. Shouldn’t you, as an executive, provide them with support they need to make sure the job gets done right and to make sure they are able to keep track of the certificates of insurance and endorsements? With the right software, you can not only make sure every certificate and endorsement gets the attention it needs, you can save your team hours of work while significantly reducing significant financial risk to your company in the process.

Ready to Learn More AI native COI software?

If your team is wasting time and resources with spreadsheets, it’s time to turn to a streamlined solution. With illumend, from myCOI's robust software and platform options, you are guaranteed efficiency, accuracy, and centralization to fit your organization’s needs. With illumend, your team can manage all aspects of the COI tracking process with more ease and less worry. Learn more about the new standard for insurance compliance tracking with a illumend, from myCOI product demo.