10 COI risk management resolutions for the new year

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Every week we cajole, lecture (and perhaps sometimes gently badger) you, our loyal readers, with an endless variety of instructions, guidance and information on how to improve your certificate of insurance (COI) risk management processes. As the year ends, we thought it might be useful to summarize some key messages we've tried to convey, leaving it to you to choose which to embrace in the new year. In no particular order, here we go:

1. I will review the insurance provisions of my leases and vendor contracts.

Are they consistent with the current use of the property? Do they adequately address the risks associated with the vendor's activity? If the answer to either of these questions is "no," you are exposed.

2. I will collect Additional Insured endorsements.

Courts are ruling that without an endorsement to the insurance policy that adds a party as Additional Insured, a statement in the COI has no effect. If you require to be named as Additional Insured in your contracts, get the endorsement that proves it.

3. I will compare information on the COI to the provisions of the contract.

Collecting the COI is the necessary first step, but it doesn't mean the tenant or vendor is playing by the rules until you check it against the lease or contract.

4. I will apply insurance requirements consistently based upon perceived risk.

You must classify risk. Without applying the same rules to the same risk you diminish your risk transfer protections, potentially leaving you open to third-party liability.

5. Enforce your insurance requirements.

It does no good to set rules if they are not followed. Create a process to collect, verify and monitor compliance. Establish protocols for handling deficiencies and exceptions.

6. I will put my insurance compliance data in order.

It all starts here. Without order, well, you have chaos. But maybe it's not as bad as you think. There are three things to do – list your tenants and vendors, list their contractual requirements and determine their compliance status.

7. Put someone in charge of insurance requirements compliance.

Yes, it's a lot of work, and it is repetitive, challenging and sometimes frustrating. It's also a central tenet of risk control. If you don't have the internal horsepower to handle the task, there are professional compliance services that can help you.

8. I will track expiration dates on COIs.

This is where many fall short. Getting the initial COI isn't so difficult when the vendor is anxious to start the job or the tenant wants the keys. It's the next COI that trips people up. You must monitor when your COIs expire and ask for replacements beforehand.

9. Measure your compliance progress.

Without knowing how you are doing you surely aren't doing the best job possible. Keep a tally of missing COIs, those not in compliance and those that are expired. Relentlessly try to knock those numbers down.

10. I will make tracking COIs a priority.

Once committed, you will have to get it done. If you've promised to do the other nine resolutions, this one takes care of itself. After all, it's the point of the whole exercise.

Happy New Year!

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