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Why your compliance is low - again.

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We all know the challenges of tracking certificates of insurance and maintaining proper coverage compliance – lots of moving parts, technically complex, not enough resources, not enough knowledge, or time, and so on. But wait a minute. At the end of the day, are these reasons or excuses? Is something else going on?

When we onboard new clients we often see things that explain a lot:

  1. Bad data.
    We see instances where the information we are provided is simply incorrect. The tenant has moved out, the contractor has finished the project, the vendor is no longer used. The lack of contact information, such as phone or email address can shut the process down until things are sorted out. The other side of this coin is that nothing is ever static - tenants move in and out, vendors come and go. It is critical there be an ongoing protocol for updating the list of insureds that must be monitored.
  2. No rules.
    It's one thing to get a certificate of insurance, it's another thing entirely to have one that meets your coverage requirements. More than once we've heard "we're happy just to get a certificate of insurance." Did someone say "requirements"? The most basic component of risk management is risk assessment and the application of that assessment to the risk control mechanisms used to reduce your liability.
  3. Lack of consistency.
    We once took on a large retail firm that insisted they had one set of requirements for all their Insureds. We looked at their data and saw they had dozens. It turns out each division manager was making up her own rules and the home office didn't know it. Clearly, that was an internal management and communications problem. Without applying the same rules to the same risk you again diminish your risk transfer protections potentially leave the organization open to third-party liability.
  4. Who's in charge?
    You know the story - without some being responsible, no one is accountable. There must be someone running point on insurance compliance. It is an ongoing task that has no ending, but it does require a consistent application of effort to work properly. If your internal resources don't provide the necessary horsepower, consider the use of an outside professionally managed solution tailored to your specific needs.

OK, be honest. Where do you fit? Maybe it's time for a little self-assessment. The good news is if you've got these four bases covered (more or less) you should well be on your way to implementing respectable certificate of insurance tracking procedures. If not, well, now you know what to do...

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Excellent article. I think is time for the insurance industry to evaluate the possibility that COIs should be created in a special paper with security features, most like the paper for special checks. COIs can be the difference between getting a contract or not so, it is money.

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