The Importance of Tracking COIs for Every Subcontractor
Tracking certificates of insurance (COIs) by hand is a time-consuming process. For contractors, it may feel easier to skip this step altogether. Although it seems easier to take the word of a subcontractor and believe they have the right coverage, requesting COIs for subcontractors is necessary.
By using COI tracking software, contractors can request and track COIs, save time, and increase compliance for all projects.
Why is Tracking COIs Important?
Since a COI has all the essential details of an insurance policy, and policies often change, it’s important to keep track of them.
After all, any time a contractor deals with a subcontractor, they’re exposed to risk. By collecting COIs for subcontractors, contractors can transfer risk back to the subcontractor.
In addition, asking a subcontractor if they have insurance isn’t enough. Nevertheless, it’s necessary to get COIs from every subcontractor and ensure everybody working on the project has coverage. Oftentimes you can obtain coverage in one of two ways: general liability insurance or workers’ compensation insurance.
What Does General Liability Insurance Cover?
General liability insurance covers specific exposures and varies depending on what coverage the subcontractor needs for their business operations. Moreover, contractors need to be clear about what coverage subcontractors need to carry for projects and assure they have this coverage.
A lot of times, a subcontractor doesn’t carry the coverage a contractor needs. In any event, if a subcontractor doesn’t have the required coverage, a COI will verify they obtained the proper coverage to protect themselves, and their contractor, from risks related to their operations. A COI is important in these situations because it confirms the subcontractor follows their contract.
What Does Workers’ Compensation Insurance Cover?
Every worker on a job site has coverage through workers’ compensation. The big questions are whose workers are they and who pays in the case of injury?
Workers brought to a job site by a subcontractor are the subcontractor’s responsibility. If the subcontractor doesn’t have workers’ compensation insurance in the event that an accident occurs on the job site, the contractor’s workers’ compensation insurance kicks in. This becomes a problem for contractors because their workers’ compensation premium increases.
What Benefits Are There in Tracking COIs?
Certificate of insurance collection and tracking software helps keep contractors from being responsible for a subcontractor’s workers when there is an accident on a job site. For this purpose, software helps contractors collect, track, and assure coverage is in place for all subcontractors.
Increase compliance, mitigate risk, and have peace of mind by signing up for a free demo today.