Coverage Insights: Certificates of Insurance
No matter what industry you're in, chances are your organization will, at some pint, rely on the help of a third party to fulfill certain business needs. Regardless of who you work with, business arrangements with contractors and vendors can open you up to a number of risks - risks that need to be accounted for through insurance.
However, when accounting for risks related to contracted work, securing your own insurance is not always enough. It's critical that your partners are covered as well. This is particularly important when you consider that, following an incident involving a contractor or vendor, your business could be the one held liable for any damages that occur.
To protect against this sort of risk, many organizations turn to certificates of insurance (COIs).
Managing COIs Effectively
Managing COIs can pose an administrative challenge, and businesses need to have procedures in place to collect and maintain them effectively. Many organizations choose to automate this process as much as possible, option for systems that notify them when a COI is required but is no longer in effect.
In addition, when managing COIs, it's important to ask yourself the following
- Is the COI provided on a proper form?
- Is the company named on the COI the same as the one named in the contract?
- Is the policy issued by a reputable insurer?
- Is the COI signed by an insurance company or agency representative?
- Are the types and limits of insurance listed on the form the same or greater than those required by you under the contract?
- Are specific policy numbers listed on the certificate?
- Are the dates of coverage adequate for the specified work?
- Are there notice of cancellation provisions listed on the COI? Are they acceptable?
- Does the COI indicate any special insurance requirements you have specified?
- Do you require written contracts with ever third party you work with, either by annual agreement for all work or by separate agreement for each project?
- Are your files organized and do they account for contracts, COIs and any other additional insured endorsements?
- Do you have a system in place (e.g., a certificate management system) for tracking expiration dates?
Please email the Certificate of Insurance Request Form to certs@congruityhr.com
