The process of managing vendor and subcontractor insurance documentation can be a nightmare for compliance and risk administrators. Receiving certificate of insurance (COI) paperwork on time, verifying every document, checking for contractually required endorsements, and reviewing accuracy—the job can feel like it requires an army. Yet most companies dedicate just a small portion of their staff to this incredibly important area. A manual process combined with several critical steps opens the door for errors resulting in out-of-pocket expenses, long litigation, and catastrophic insurance losses. An understaffed, undertrained, or under-resourced compliance team can cost far more than you think—potentially millions of dollars more.
If compliance management is pulling your team under, there’s a better way to get back on top of the task.
Have You Considered COI Tracking Software?
Robust software combined with smart automation is key to making a lean team more successful. The right COI management solution delivers both. Benefits of myCOI’s platform for the risk management team include:
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- Automating insurance renewal notifications via email to vendors and subcontractors
- Eliminating piles of paperwork through a digital document hub
- 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
- Streamlining insurance renewals by directly communicating with insurance agents and allowing them to upload COIs into the platform
- Processing COIs using a guided assistance feature to improve the speed and accuracy of reviews
- Connecting risk management and accounting software ensuring no third-party gets paid until they are in full compliance
- Partnering with insurance industry pros who act as an extended compliance team
What Is the Price of Maintaining Your Manual Process?
According to the Independent Insurance Agents and Brokers of America, errors and omissions claims related to COIs are on the rise. The biggest offense is third parties failing to add or identify the additional insured properly. That is why best practice involves COI administrators verifying the endorsement on the actual policy for every vendor and subcontractor.
Is Your Risk Department Under-Resourced? Look for These Signs:
- Vendor and subcontractor documentation status is tracked via spreadsheet
- COI expiration dates are entered manually into an accounting system or spreadsheet
- Reminders come in the form of a personal calendar alert or sticky notes
- The office includes piles of unfiled paperwork
- Desks hold stacks of COIs needing to be verified with an insurance agent
- No central system for quickly identifying and acting on expired COIs exists
In United Stationers v. Zurich American a subcontractor’s certificate of insurance showed that United was covered under the policy. However, the policy provided no such coverage. It was only when an employee fell off a ladder supplied by the subcontractor and sued that United discovered it would be left holding the bill.
The second major problem is fraud. According to David Dybdahl in an article for the Insurance Risk Management Institute (IRMI), as many as nine out of 10 insurance certificates were found to materially misrepresent the insurance in place for some sections of the artisan contractor market.
Unfortunately, misrepresenting or falsifying coverage is easy for third parties to do. Simply search for “COI template” through your internet browser and a host of options appear. Subcontractors can enter some information and send it over. Sure, most states have laws regulating COIs, but a false document caught after a claim would leave your company fully liable for the loss. Plus, the issue likely would result in a lengthy legal battle to recoup the money, not to mention lawsuits resulting from injuries or damages to other parties.
Does your compliance team have the time and know-how to find false or misrepresented documentation and act on it immediately? If not, COI tracking software to proactively identify issues and streamline workflows may be your best fraud-fighting friend.
Don’t Let Paperwork Crush You—There’s a Solution for That
Too many inefficient processes. Too much manual work. Too little time and training. Too many losses impacting the bottom line. These represent common problems plaguing nearly every risk management team. If these “too” problems sound too familiar, now is the time to check out myCOI’s certificate of insurance management solution. Our tool handles the everyday tasks of managing COIs and protecting your organization against underinsured claims, costly litigation, and failed audits.
A survey of myCOI users found the system eliminated 40% of traditional manual tasks. The efficiencies created the time for processing documentation more accurately while also proactively resolving critical compliance issues.
myCOI’s software is an easy-to-use, cloud-based solution developed and supported by a team of insurance professionals. We built the technology on a foundation of insurance industry logic to automate the COI communication process and ensure you remain protected.
Interested in learning more about our insurance tracking services, or want to see myCOI in action? Request a product demo or sign up for myCOI’s newsletter to stay in the know.