5 Reasons to Prioritize Your Certificate of Insurance Management
Prioritizing your certificate of insurance (COI) management is an important process that your business cannot afford to set aside.
According to research reports conducted by Insureon, “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 right coverage in place are high.
Because these numbers are so shocking, we are going to give you five reasons that will convince you to prioritize your certificate of insurance management system.
1. No Business can Complete Every Project on Their Own
Every business, no matter the industry, will at some point or another rely on a third–party for help completing a project. To work with a third–party and ensure coverage, you need to make sure you have up to date certificates of insurance from them.
Making sure you collect up–to–date certificates of insurance means you need an effective system to track and manage COIs for accuracy.
Having these COIs is important because working with third parties exposes you to risks that you need to subrogate through insurance. If risks are not subrogated, you cover the cost of third-party accidents.
2. As an Insured, You Need to Provide Proof of Coverage
It may be on top of your mind to collect certificates from third-parties, so you can subrogate claims back to them, but they also want to make sure you have the right coverage in place. You need to make sure you have up-to-date certificates of insurance proving you have the correct coverage in place.
Tracking your insurance policies is important so, in the case of an accident that your business is liable for both you and the third-party you are working with have coverage.
3. COIs Ensure Compensation
If you collect COIs from third-parties and ensure they are up-to-date, you can ensure coverage is available if a contract is broken.
For example, if you are working with a third-party and they do not install something to the standard stated in the contract, a certificate of insurance that is current will make sure you can cover the loss.
4. Only Collecting Certificates is not Enough
Your COI management program needs to have a consistent system in place to make sure all COIs are up-to-date and provide the correct coverage. If limits are not met, risk cannot be transferred to the third-party.
If you collect certificates without accurately checking them, there is no way to know if a third-party bought enough coverage or if the policy is active.
Having a system in place to scan and ensure limits are met will ensure the right coverage is always in place.
5. Your Manual Process is Time-Consuming & Budget Draining
Reading and replying to hundreds of emails is time-consuming and a waste of human resources. This manual process forces employees to check every certificate for accuracy and expiration dates and is prone to error.
With SmartCompliance all you have to do is upload or have third-parties upload their certificates and Optical Character Recognition (OCR) does the rest for you! Limits are checked and notifications are set to send when COIs need to be renewed or are about to expire.
Sign up for a free product demo to learn more and see the software in action.