Third party risk management risks can be a major challenge for property managers, especially in today’s fast-paced, interconnected business environment. Thankfully, there are many strategies we can employ to mitigate vulnerabilities and threats when it comes to third-party risk management, including ensuring appropriate coverage through COI tracking. Paramount among them is certificate of insurance (COI) tracking.
Follow along as we discuss the importance of COI tracking, its applications in real estate, and how leveraging COI tracking software can make your property management operations safer and more efficient.
What Is COI Tracking?
Let’s start with the basics. What is COI in risk management? It is defined as the process of monitoring and verifying certificates of insurance provided by vendors, contractors, tenants, and any other external parties that interact with your property.
Certificates of insurance, or COIs, are official documents produced by an individual or business’s insurance provider that act as certified proof of their insurance coverage. They are important for proving that third parties carry sufficient coverage to meet legal and contractual obligations, as well as specific insurance requirements outlined in agreements.
For property managers, COI tracking is critical for reducing liability, ensuring insurance compliance, and safeguarding against unexpected incidents and associated legal and financial ramifications. There are many important benefits to COI tracking, including:
- It provides visibility into insurance coverage across various vendors and/or tenants.
- It helps prevent lapses in coverage that could expose your property to risk.
- It ensures that third parties maintain compliance with legal regulations, local ordinances, industry standards, and agreements set out in your contract.
Businesses might also choose to use COI tracking software, which will automate many of the manual elements of the verification process, saving time and ensuring accuracy over human-prone errors. Features like centralized documentation, automatic reminders for renewals to avoid lapses in coverage, and real-time coverage updates help streamline the tracking process and reduce the administrative burden for busy teams.
What Is Certificate of Insurance Tracking?
Insurance certificate tracking, also known as certificate of insurance tracking, is a term that might be used interchangeably with COI tracking, or it could refer to one specific component of COI tracking that focuses on managing the individual insurance certificates issued by third parties.
Property managers must verify that each certificate they receive meets their required coverage thresholds and stays active throughout the duration of their business relationship. This will ensure that you’re always protected against liabilities related to accidents, damages, or other incidents that occur on your property, making insurance tracking a critical task.
However, you may face challenges when it comes to insurance certificate tracking, such as verifying the authenticity of certificates, managing multiple expiration dates, and ensuring that coverage aligns with local regulations, making it essential to track certificates effectively. As we mentioned, leveraging technology can help overcome these challenges, allowing for more control over the process and less error throughout it.
What Is a COI in Real Estate?
In real estate, COIs are essential for confirming that vendors, contractors, tenants, and even property managers themselves maintain active insurance policies that meet the requirements of a property or contract. Insurance agents play a crucial role in managing these COIs, ensuring that all necessary documents are uploaded and verified. COI management allows landlords and property managers to mitigate downstream risks like financial losses, legal disputes, and property damage.
For example, in California, where property management regulations are particularly stringent, COI tracking ensures compliance with strict state laws while protecting the interests of both landlords and tenants from serious risk.
Whether it’s property insurance, renters insurance, workers’ compensation insurance, commercial general liability insurance, or another specific kind of policy, there are many kinds of coverage that may be relevant for real estate professionals to verify. By maintaining a comprehensive COI tracking system, they can reduce their liability exposure and build trust with those various stakeholders.
The Role of COI Tracking Software
More and more, businesses are outsourcing the hardest and most error-prone parts of compliance management by utilizing digital tools like insurance tracking software. These platforms simplify the process by managing insurance certificates and offer sophisticated features such as:
- Automated insurance certificate tracking
- Centralized, digitized document storage
- Policy renewal reminders
- Automated third-party communications
- Risk visualization
- Real-time dashboards and alerts
These platforms simplify the process by managing insurance certificates and offer sophisticated features such as automated insurance compliance management.
Some software solutions are available for free online, catering to smaller property management businesses with limited resources, and they allow users to easily manage certificates. However, more comprehensive solutions will come with more advanced features, such as customizable reporting to fit your unique asset(s).
When choosing COI tracking software, it’s important to consider factors like your property’s specific needs, the volume of COIs you manage, and your budget. A good tool should not just come with an easy-to-use platform but also a strong customer support arm that can assist with any questions and concerns you may have as they arise, helping to mitigate potential risks.
Take Control of Your COI Tracking
COI tracking is an integral piece of any real estate organization’s risk management strategy. Risk managers play a crucial role in this process, ensuring that all insurance documentation is up-to-date and compliant. It provides assurance that adequate insurance coverage is in place for all relevant parties, which is important for maintaining compliance with legal and contractual requirements.
By leveraging the right tools and processes, such as insurance tracking software, you can streamline compliance, reduce risk, and focus on providing excellent service to tenants and stakeholders without worrying about claims and financial losses from damages outside of your control. Enhance your property management efficiency and peace of mind today by giving us a call.