Whether your organization is currently tracking your contractor or vendor certificates of insurance or not, you may wonder why the effort would be worth your time. After all, it is time-consuming and requires a lot of communication to collect a certificate, much less guarantee that it meets your organization’s requirements.
Is there really that much of a benefit? Collecting a certificate of insurance confirms that your contractor has the financial ability to pay for an accident while performing work or services, that they have enough coverage, and can be a valuable tool.
Confirms Your Contractor’s Financial Ability
When working with a contractor, you want to feel comfortable that if there’s an accident, that they will have the ability to pay for that accident and that you don’t get stuck with the bill. By collecting insurance, you can confirm that they’ve purchased insurance, which is one of the most effective ways to pay for an accident, especially a significant one.
Confirms That Your Contractor Meets Their Contractual Requirements
Collecting a certificate of insurance is a very simple way to obtain details about your contractor’s insurance and that it meets your requirements. Odds are, you have your contractors sign an agreement before they can work for you. In that agreement is usually a list of insurance requirements. Those requirements should be designed to protect your organization from the most common accidents for your contractor’s industry. You can feel safer, knowing that they have enough coverage for likely accidents.
Certificate of Insurance Tracking: A Valuable Tool for Accidents
There is also a very important piece of information on a certificate of insurance that comes in handy when you do have an accident and that is who the insurance carrier of the policy is. If you’re listed as an additional insured on the policy or have a contract in place stating as such, you can contact the carrier directly to file an insurance claim.
A Real-World Example
A client had dispatched a contract tow truck driver to haul a vehicle that had broken down. While transporting the vehicle, the tow truck hit another business’s custom-built pylon commercial sign. This resulted in property damage worth $15,000 and the bill was sent to our client. Having previously collected a certificate of insurance for the tow truck driver, the client’s claims department was able to contact the driver’s insurance to start the claims process.
Accidents like this are common. The larger your network of contractors and vendors, the more your organization is open to exposures and accidents. Having the certificate on hand is more effective when it comes to reducing your liability. It is much more difficult to ask the contractor for their insurance after the accident happens.
Although certificate of insurance tracking may seem like a lot of work, it is a critical document when it comes to protecting your organization and reducing liability and risk. This is why PlusOne Solution provides certificate of insurance management services to our customers.
Removing the need for your organization to manage COIs internally frees up your time and resources to focus on business operations, and leaves the effort of COI management to our experienced team. Contact us today to learn more about how we can help.
Contents are provided for information purposes only and should not be construed as legal advice. Users are reminded to seek legal counsel with respect to their obligations and use of PlusOne Solutions services.
About PlusOne Solutions
PlusOne Solutions has been an industry leader in the risk management field by specializing in compliance programs that meet the complex challenges of geographically dispersed contractors, vendors, and employee networks. PlusOne Solutions protects companies from possible financial, legal, and reputational risks associated with contractor and vendor relationships while creating safer work environments. To learn more, visit https://www.PlusOneSolutions.net.
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