5 Reasons Why Prioritizing Your Certificate of Insurance Management Process is Important | FIRST, VERIFY

Certificate of insurance (COI) management is a crucial part of your risk management strategy and an important process that your business cannot afford to ignore. Without proper insurance coverage from your contractors and suppliers you are by default taking on the risk that they should be bearing.

According to research reports conducted by Insure, "75% of U.S. businesses are underinsured, and 40% of small business owners have no insurance at all." So, the chances of you working with a third party that does not have the required coverage in place are high.

These numbers are alarming. Let’s discuss five reasons you should prioritize your certificate of insurance management system. 

1. No project can be completed independently

Every business, irrespective of the industry, will at some point depend on a third-party contractor for help with completing a project. It’s incredibly important for businesses to get COIs for every contractor or third party they bring onto a project. Even if you have worked with them in the past and trust them, managing COIs prevents organizations from accidentally taking on the risks associated with the work of their vendors.

2. You Need an effective tracking system

The collection and tracking of compliant certificates of insurance is typically an administrative challenge. This means that you need an effective system in place to contact, collect, manage and track the expirations of your contractors’ and suppliers’ COIs.

3. COIs ensure compensation if there is a loss because of the actions of others.

Collecting COIs from third parties and ensuring that they are up-to-date is the only way to feel comfortable that coverage is available in case there is a loss due to the negligence of the contractor. 

Missing the expiration of a vendor’s certificate and not getting a new certificate can leave your company vulnerable to serious financial harm should the contractor or supplier cause property damage, personal injury, or worse.

4. Just Collecting Certificates is not Enough

Your COI management program needs to have a consistent system in place to ensure that the certificate is current, the coverage amounts meet your requirements, and other terms like additional insured are in place.

5. Your manual process is tedious & budget-draining

The less time your team is spending on certificate collection and management, the greater the number of hours they will have to work on other important company tasks. With an efficient third-party COI tracking system your risk level drops and your team can focus on income-producing activities.

If you would like to learn how we can help you manage your vendor certificates of insurance, contact us today.