Increasing Your Insurance Requirements? Make Sure You Have a COI Management Plan First
COI Management |July 10, 2022
Whether you’re beginning to enforce your contractor’s insurance requirements or looking to increase the existing requirements, it is important to create a COI management plan and stick with it. Before rolling out any changes you will want to have a COI tracking system to handle incoming certificates of insurance. But before all of that can begin you need to consider how you will convey and kick off the change.
Communication is Key
There’s no such thing as overcommunicating. We are always reminded that the key to successful change in an organization is communication. This will cost your contractors or vendors money with increased insurance premiums, so it’s important that they understand why you are asking them to increase their coverage. Let them know what pain points your organization is experiencing. Such as spending a lot of money on accidents or reducing your risk exposure. They will be more understanding than you might expect, especially if you’ve fostered good relationships.
In addition, you should let them know why this will benefit them. The main benefit is that it appropriately provides the protection that they need for the risks that they are exposed to.
Sometimes it can be difficult to tie a benefit to a requirement, such as asking to be additional insured. In these cases, you must create a benefit so that you have a mutually beneficial partnership. We always recommend to our clients that they make this part of an incentive scorecard. Let your contractors know that they qualify for more work by following the requirements. It is important to follow through on this. If work isn’t coming their way, with time, they will choose to take their work elsewhere and, in the meantime, won’t provide the requirements you are looking for.
Set a Deadline
When there are so many other pressing items on everyone’s plates, it can be easy to set aside a non-urgent request. If you decide to increase your requirements and want it to be effective, you must take it seriously if your contractors are.
The best way to create a sense of urgency is by creating a deadline. You will want to give ample time for communication to get out, including multiple follow-up emails, discussions to take place between your area managers and the contractors, and contractors to work with their insurance agents.
Create a Campaign Schedule
Coordinate a campaign with a set timeline and send the schedule and email templates to your team and anyone who may have to answer questions. Get their feedback since they work with the contractors day in and out. Send out emails with your communication message and the timeline clearly spelled out in a concise manner. Continue to periodically send. As your deadline nears, create more urgency in your language. You may even want to schedule phone calls towards the end of your email campaigns.
Review Compliance Rates
You won’t know if you are successful unless you evaluate your progress. Check your compliance rates when you start, midway and towards the end. Know who your high-volume, high-risk contractors are and separate them from contractors you only occasionally provide work to. The 80/20 rule usually applies here. Most likely 20% of your contractors perform 80% of your work. Those are the ones you have the most risk exposure with. As your campaign gets closer to the end make sure you are specifically targeting them and having conversations with them. For contractors where little work is sent or they are in remote areas, consider exceptions.
By tracking progress, it can help you adjust as well as provide leadership and management with a track record of success.
There are plenty of valid reasons to increase your insurance requirements and all organizations working with contractors should collect a COI. By effectively communicating the change, setting a deadline, creating a campaign, and evaluating progress through compliance reporting, you will set yourself up for successful execution and one step closer to minimizing your risk. Contact us today to discuss our COI management plan services.
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