The 2021 economy is outperforming expectations, especially coming out of a global pandemic that brought the world to a standstill. That’s great news for almost everyone—except people working in risk and compliance. More business has compliance administrators operating at the brink. When overworked and under-resourced, errors become inevitable. This is especially true with the traditionally manual compliance management process. Sure, we all make mistakes, but a compliance misstep can cost a company millions.
Has Your Risk Management Team Become a Risk Itself?
Trends in construction demonstrate the heightened potential for problems. The industry needs to hire 430,000 workers in 2021 to keep up with current demand. The shortage has 88% of construction firms reporting difficulty finding enough skilled labor. That means work contractors usually keep in house with their own staff is going to smaller subcontractors. The imbalance of supply and demand has subcontractors bidding jobs higher, prompting construction companies to shop around for the best price. Plus, global supply chain backlogs have some materials taking months rather than weeks to arrive. As a result, 55% of contractors report challenges in meeting project deadlines.
How Does This Impact Insurance Compliance?
A compliance administrator must complete a series of time-consuming steps for every potential subcontractor that includes:
- Requesting a certificate of insurance (COI)
- Reviewing all documentation for accuracy
- Verifying contractually required insurance endorsements
- Tracking insurance policy renewal dates
- Maintaining copies of all paperwork submissions and correspondence
That equates to hundreds of touchpoints per project for companies that heavily rely on subcontractors. With most teams managing compliance manually, the potential for errors is extremely high. The risk gets worse with added pressure to keep jobs on schedule. Missing a step or cutting corners is understandable, but costly.
Take a contractor hired to power wash floors for a Florida-based property management company. The vendor flooded the building and two adjacent properties—twice. The compliance team missed that the contractor was uninsured leaving them holding a five-figure bill. And that is on the cheaper side of uninsured claims.
Workers’ compensation involving disability or death. Extensive property damage. Multiple injured victims. Issues like these can become multi-million-dollar claims, not to mention the cost of lengthy litigation. Regardless of the outcome, companies invest significant financial resources and staff time, while also needing to rebuild the brand. But the scariest thing is that a million-dollar error can happen easily within your compliance team on any given day without the right tools to help. Simply overlooking a checkbox on the COI or missing an insurance expiration date by 24 hours is all it takes to open the door to a catastrophic claim.
Have You Considered COI Tracking Software to Erase the Worry?
Smart technology can give your team the time and tools they need to truly fight risk. Insurance tracking software automates compliance processes helping to improve accuracy, reduce errors, and identify common omissions. Benefits to compliance administrators include:
- Elimination of most manual processes
- Automating communications, alerts, and notifications with both subcontractors and their insurance agents
- Following system-generated workflows to ensure completion of the multi-step compliance process for every third party
- Leveraging real-time risk insights to proactively identify and prioritize problem areas
- Processing COIs using guided assistance to enhance review speed and accuracy
COI tracking software saves time and money. And for your compliance team, that means peace of mind.
If you are ready to erase the worry, check out myCOI. Our certificate of insurance management platform protects companies against underinsured claims, costly litigation, and failed audits. The software is an easy-to-use, cloud-based solution developed and supported by a team of insurance pros. We built it using industry logic to automate the COI communication process for keeping your company protected. myCOI users report a 40% reduction in manual processes, allowing for more time focused on finding and eliminating risk.
Interested in seeing why more and more companies have myCOI as a member of their compliance team? Let’s schedule time for you to see myCOI in action.