Risk managers are responsible for identifying and mitigating areas of risk in their business. They perform their role by implementing processes to manage and improve environmental controls, promote employee safety knowledge, training, and practices, and ensure adequate business insurance coverage to protect the people and assets of the company from injury and catastrophic loss.
But proactive risk managers also must think beyond their own firm. They need to ensure that those with whom they do business, including contractors, subcontractors, vendors, suppliers and tenants, all have sufficient insurance coverage to protect their firm in the case of accidents or claims, so the contracting company isn’t exposed to unprotected third party liabilities. This process of monitoring and tracking certificates of insurance is an essential task that, to be done correctly, should be as systematic and reliable as any other business process.
For example, a large manufacturer of animal supply products needs to require evidence of insurance from the company that supplies it with chicken feed. A technology firm needs to require a certificate from their security company. And a real estate management firm would require a certificate from a retailer that rents space in one of their office buildings.
The certificate of insurance management process can get complicated very quickly, and manual solutions seldom provide the reliability or efficiency even medium-size companies need. If you have more than just a handful of contractors or suppliers to track, with three or four lines of insurance each, it can quickly consume a risk manager’s valuable time. Manually tracking when various lines of insurance are about to expire or whether coverage limits are up to date is very time-consuming, even on a spreadsheet. It requires constant checking, cross-referencing, and follow-up, and frequently can still produce oversights and errors. This could leave your organization vulnerable.
Yet if you fail to track a certificate of insurance and a workplace incident should occur, you could find your organization held liable for insurance claims and costly lawsuits. Consider this scenario: let’s say a mining company hired a trucking company who in turn hired independent truckers who were responsible for their own insurance. If the mining company and the trucking company failed to verify the insurance of their respective subcontractors and one of the drivers were to cause an accident, the resulting lawsuit could hold the driver and both companies liable for damages.
Using an automated system to manage, track, and qualify your certificates of insurance can help ensure that your organization is adequately protected. This lowers your risk, perhaps even reduces your insurance premiums, and results in a more secure and robust bottom line.
Importantly, a dependable certificate of insurance management process protects your company from unexpected claims and litigation, potential business interruptions, and lets you focus on building a successful, safe, and secure organization.
Succeed Management Solutions, LLC offers a complete Certificate of Insurance Service, designed for organizations in any industry to deliver proactive management, control, and reporting of certificates of insurance. Succeed also offers a free webinar to review the needs for certificate of insurance management, proper contractor reviews, and audits. Learn how to save time, reduce costs, and ensure accuracy managing certificates of insurance. The live webinar occurs at 9:00 am Pacific/12:00 pm Eastern every Friday. Learn more about our Certificate of Insurance Management Service by emailing email@example.com to register for the webinar.