The world of COIs, endorsements and insurance in general can be very confusing and complex – even to those who are living and breathing the documents and processes every day. Insurance regulations can change on a frequent basis and most compliance staff are left out of the loop on those important updates
Does your compliance staff know the ins and outs and “gotchas” that they should be watching out for when reviewing documents and COIs? If your organization isn’t careful, you could experience a costly lawsuit simply because your compliance staff doesn’t know the entire “insurance dictionary” of terms and meanings, but more importantly, know what to look for when reviewing COIs and endorsements.
In this post, we’ll explain why compliance can be difficult for compliance staff, and also explain how your organization can mitigate risk.
COIs and Endorsements Are Complex
The world of insurance is constantly changing, especially when a ruling is made on a case that can change the way insurance is perceived. And not only that, there are over 1,000 types of endorsements available for any number of specific scenarios. As case law changes and precedents are set, insurance carriers make adjustments to endorsements and requirements, meaning that unless compliance staff members are constantly researching and staying up to date on law, then they may overlook an important piece of information if they aren’t spending enough time reviewing each document.
As we noted in an earlier post, according to a recent article in International Risk Management Institute, Inc. entitled The Scope of “Ongoing Operations” Additional Insured Endorsements: Broader than Expected, author Steven Rawls explains the complexity:
“Additional insured endorsements come in all shapes and sizes. Some cover the sole negligence of the additional insured. Others cover the additional insured only for the named insured’s negligent acts. Still others cover particular projects or a particular activity. In every case, the language of the endorsement and the jurisdiction’s interpretation of that language governs the scope of the coverage provided.”
Chances are, your compliance staff deals with more than insurance and COI tracking, so streamlining processes is important to them so they can do their jobs more efficiently, and more effectively without worrying they are overlooking something that could significantly harm the organization.
Laws Vary State By State
“This disparity grimly illustrates the geographic lottery that governs compensation for workplace injuries in America. Congress allows each state to determine its own benefits, with no federal minimums, so workers who live across state lines from each other can experience entirely different outcomes for identical injuries. Nearly every state has what’s known as a ‘schedule of benefits’ that divides up the body like an Angus beef chart. Workers are awarded a portion of their wages up to the state maximum for the specified number of weeks assigned to each body part. But depending on those numbers, the final amounts can vary widely.”
The article goes on to explain that, “The loss of an arm, for example, is worth up to $48,840 in Alabama, $193,950 in Ohio and $439,858 in Illinois. The big toe ranges from $6,090 in California to $90,401.88 in Oregon.”
A compliance staff member could review a limit and look at the names on certificate directly and see that the organization is listed as an additional insured. If those items check out, then they could believe their job is finished. But hold on – not so fast. It’s important for organizations to understand that it’s not about seeing the organization on a certificate or verifying the limits – it’s everything that’s behind the curtain, such as exclusions, endorsements and those items that, if your compliance staff isn’t careful to review, puts your organization at incredible risk.
Unfortunately, COIs and endorsements aren’t usually black and white, but rather contain many gray areas where having an expert on hand to help review and ensure everything is in order can be tremendously helpful – and can help to avoid costly litigation.
Easily Capture & Track Important COI Information
Insurance Tracking Solutions exist for one reason: to help you handle the everyday tasks of managing COIs and protecting your organization against underinsured claims, costly litigation and failed audits.
The software and certificate tracking services are combined into an easy-to-use solution developed and supported by a team of insurance professionals. The product and services are built on a foundation of insurance industry logic to automate the COI communication process and ensure your organization remains protected.
Not only that, myCOI’s team of insurance professionals work directly with compliance staff and agents through the process of collecting and reviewing COIs and endorsements to ensure everything is correct and to help your organization gain peace of mind.