General Contractor Certificate Of Insurance Tracking Software
Companies that hire large numbers of subcontractors, such as general contracting businesses, have to deal with an enormous amount of certificates of insurance that often vary wildly in complexity, timing, and compliance. Certificate of insurance (COI) tracking software is often a tool that turns these COIs (and the risk they adjust) from a hassle-filled, manual process that frustrates compliance administrators into a simple, automated process that ensures compliance and saves time, effort, and money.
And even after you get them, and knowing how to get a certificate of insurance that’s compliant the first time is a full-time job, the job is just getting started. Because most of them won’t be compliant. Requesting a certificate of insurance for business protection is necessary, but it’s rarely easy.
Let’s look at some of the details.
COI Tracking Spreadsheet
If you’re looking for a simple and manual way to track the certificates of insurance in your business, then using a COI tracking spreadsheet is an option worth considering. Many companies begin by having their staff track insurance policies on Excel spreadsheets. And for smaller companies just starting out, that system works. For basic certificate of insurance tracking spreadsheets are not a bad solution, certainly better than just a basic expiration date tracker.
Many companies find spreadsheets a good training tool; for a certificate of insurance tracking template Excel has several basic templates that can be customized to what you need, but most companies scale past this very quickly.
The drawbacks of using an Excel insurance tracker are that they can be time-consuming to maintain and often require constant updating. What began as a simple project one person could track and easily snowball into a time-intensive process that’s impossible to scale as a company grows. Instead, companies might add more people and more spreadsheets, which leads to paperwork being lost or misplaced, which leads to increased chances for errors in the data.
That is exactly the worry that myCOI erases. Our systems are industry-leading. Our insurance professionals are top-notch. If you’re tracking hundreds of certificates of insurance, we’d love the chance to show you just how much time and effort we can save you.
Certificates Of Insurance For Subcontractors
If you’re a subcontractor, or you hire subcontractors and have to track certificates of insurance you receive from them, you may see a few oddities. Depending on what state you’re working in, certificates of insurance for subcontractors may sometimes lack evidence of workers’ compensation coverage. This is because several states do not require workers’ compensation coverage for what are called sole proprietorships, where the individual worker is the only employee of their one-person company. If you’re unsure whether or not there should be a workers comp policy by statute, consult with your state’s workers compensation board.
Even in states where it is not legally required, however, many companies that hire subcontractors still require the coverage as a necessity for employment. In that case, a workers’ compensation certificate of insurance for subcontractors will show the minimum necessary coverage required by the hiring entity.
What’s fun about these one-person plans is that often they’re what are called ghost policies: they are workers’ compensation plans, but they have exclusions disallowing coverage for the single employee. They allow subcontractors to satisfy the requirement of needing workers’ compensation, but since they are excluded, the coverage only covers a ghost.
One question we get a lot at myCOI is “which vendors need a certificate of insurance?” and the answer to that is “all of them.” Anyone coming on your job site to do work needs to provide you with a COI; otherwise, you’re assuming the risk of any claims they may generate or cause while they’re there.
Certificates Of Insurance Issues And Answers
We know this can be a complicated topic because we get asked about certificates of insurance issues and answers all the time. Insurance is a complicated field with nuances around every corner, and almost every situation has some kind of unique aspect. Understanding coverage, understanding what the certificates of insurance actually say—and what they don’t say—can be, and often is, a full-time job, and it often takes more than glancing at a certificate of insurance template.
There are two parties you want to check within almost any instance of questions around certificates of insurance. First, for questions like which vendors need a certificate of insurance, check with your company’s risk management department, or when that doesn’t exist, your company’s general counsel about what your vendor insurance requirements are. In many cases, these departments or people can give you a certificate of insurance review checklist to help you ensure that the COIs you review have all the necessary coverage.
The other party will be the agent or broker who issued the certificate of insurance. When you have questions about the coverage, exclusions, or limitations shown on a certificate of insurance you receive, the only safe source of information is the agent or broker itself. Don’t ask the third party who provided you with the certificate; not only does this give them the opportunity to be dishonest, it also sets you up to be taken advantage of out of ignorance or a mistaken belief about coverage. Go to the source. Ask the agent or broker. Certificate of insurance compliance is complicated enough without adding more chances for mistakes. Doing so fully aligns with certificate of insurance best practices.
When Do You Need A Certificate Of Insurance From A Vendor
If you’re a contractor or business asking “when do you need a certificate of insurance from a vendor?” The answer is pretty simple: before any vendor that enters your business premises or project site to perform work and takes any actions that may generate any risk at all needs to give you a certificate of insurance. Many companies maintain sample insurance requirements for vendors in a file for easy access.
That sounds pretty vague, we know, but it’s a simple reality. Risk exists all around us, whether we generate it or not, and the last thing you want to do is assume the burden of risk your vendor opened you to because you failed to secure a certificate of insurance.
Now you may ask “what is a certificate of insurance for vendors?” and the answer is, the same thing you provide to other entities that you do work on behalf of. It should show the vendor’s coverage, any limitations or exclusions, and all the usual information. You should request certificates of insurance from vendors every time you hire them.
Knowing how to request a certificate of insurance from a vendor likely comes down to how your business works with vendors. In many cases, COIs with the minimum insurance requirements for vendors are required as part of the vendor application process or were specified in the RFP, or in an agreement or contract. If not, it’s often a requirement before the vendor can begin working.
If you deal with a lot of vendors, you can often save a lot of time by having a sample letter requesting proof of insurance from vendors on hand. Knowing how to request a certificate of insurance from a vendor does little to shield you from the hours of work you have ahead of you verifying all those resultant COIs, though. A request for certificate of insurance sample letter can also be a useful training aid.
Certificate Of Insurance Management
The competition for the best certificate of insurance management software is fierce, and we’d be being dishonest if we didn’t say you need to choose the right solution for your company. Obviously, at myCOI we believe we are the right solution nine times out of ten, but we don’t fit every company, and that’s okay. Certificate tracking online could be a critical part of your business no matter what solution you use, whether that’s a fully managed partner solution, myCOI competitors, or something else. It takes a bit more specialist knowledge than knowing how to organize certificates of insurance in a box, for example, if you’re going to manage the risk fully, but that is knowledge you can always learn.
You’ll need to define what “best” means for your business. Is it the least expensive? That depends on how you measure cost. In pure dollars, a free COI tracking software may work, but is it reliable? Do its developers offer support? Are there regular product updates coming out? If not, check it carefully to make sure it isn’t out of date.
Is “best” the least of your precious person-hours consumed by tracking certificates of insurance? Then a managed solution like myCOI offers may be best. Our team of insurance professionals know what they’re looking at, and they’re experts in making sure your certificates are promising what they say they do, that they meet your business requirements for coverage, and our quarterly verification makes sure the coverage stays in effect.
Certificate Of Insurance Compliance
Let’s take a moment and run through certificates of insurance 101. In its most simple form, a certificate of insurance is the evidence from your insurer that you carry the insurance you claim to carry. The normal forms include all the necessary information a requestor would need to verify that you or your business carry the insurance they require of their contracted entities. Just like your driver’s license says your state believes you know how to drive safely, so a certificate of insurance says your agent or broker believes you are covered.
There are nuances, of course. The certificate of insurance for businesses may be different, and will almost certainly carry different information, than the certificate of insurance for contractors, because the work done, the number of employees involved, and therefore the risk involved can be different.
A certificate of insurance also removes the need for unnecessary conversations. If you’re being considered for a job, competing on the bid is enough work. Not having to explain your insurance coverage, because your certificate of insurance explained it for you, can be a real time saver.
Remember too that insurance requirements vary by state, which means that certificate of insurance requirements by state vary also. Knowing when to request a certificate of insurance or, if you’re on the receiving end, how to check certificate of insurance can often be the difference between risk being managed and risk being out of control.