The Importance of Tracking COIs for Every Subcontractor
Manually tracking Certificates of Insurance (COIs) 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 proper coverage, requesting a COI is necessary. In the long run, having up to date COIs saves both time and money.
By using SmartCompliance, contractors can request and track COIs, save time and increase compliance for all projects.
Why is tracking COIs Important?
Since a COI contains all the essential details of an insurance policy, and policies often change, it’s important to keep track of COIs with software like SmartCompliance.
Any time a contractor deals with a subcontractor they are exposed to risk, but by collecting COIs contractors can transfer risk back to the subcontractor.
Asking a subcontractor if they have insurance isn’t enough, it’s necessary to get COIs from every subcontractor and ensure everybody working on the project is covered. Coverage is often met in one of two ways: general liability insurance or workers’ compensation insurance.
General Liability Insurance
General liability insurance covers specific exposures and varies depending on what coverage the subcontractor needs for their business operations. Contractors need to be clear about what coverage is required for projects and assure subcontractors carry the proper coverage.
A lot of times, a subcontractor doesn’t carry the coverage a contractor needs. If a subcontractor didn’t have the required coverage a COI will verify coverage was obtained to protect themselves, and their contractor, from risks related to their operations. A COI is important in these situations because it confirms the subcontractor is in compliance with their contract.
Workers Compensation Insurance
Every worker on a job site is covered through workers’ compensation, but 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 belong to the subcontractor. If the subcontractor doesn’t have workers’ compensation insurance and 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?
SmartCompliance’s certificate of insurance collection and tracking software help keep contractors from being responsible for a subcontractor’s workers when there is an accident on a job site.
Increase compliance, mitigate risk and have peace of mind by signing up for a free demo today.