Is Insurance Compliance Software the Right Choice to Manage COIs?
COI Management |September 8, 2021
Mitigating financial liability is best achieved by tracking insurance for your extended workforce. Insurance compliance software is one option, but is it the best choice for your organization?
It is a known fact in the risk management field that one of the most effective ways to transfer financial risk is tracking insurance for your contractors or vendors. By collecting and verifying a certificate of insurance (COI) you can make certain that they are meeting their contractual requirements, which will protect both of you if there is an accident. Luckily, there are many types of solutions to help you with your COI tracking needs. COI tracking solutions not only run a better COI management program than in-house teams, but usually these services are more affordable than if you were doing it yourself. Because there are several COI tracking options to choose from, it is best to evaluate the two main solutions, insurance compliance software versus services. Keep reading to find out which one is right for your organization.
The Difference Between COI Tracking Software and COI Management Services
Knowing the difference between insurance compliance software and services for COI tracking is important when trying to solve the specific needs and pain points of your organization.
COI Software is typically a cloud-based program that will automate many steps required for the collection, review, storage, and reporting of COI compliance details. Automated email notices will request COIs leading up to expiration. Once COIs are collected, they are then uploaded into a repository. The insurance compliance software will help to identify most areas where the COI is deficient or missing your requirements and input the data into the program with little manual review. If your requirements are not met, you will work with your contractor, and perhaps, the insurance agent to help them understand the requirements and have them submit a revised COI. The software will provide reporting for compliance and upcoming expirations to help you manage the process.
COI Services often include the basics that COI software provides but also the full management of the process, including the handling of inbound and outbound phone calls, working with the contractor, insurance agents, and carriers to understand the insurance requirements, review of more complex documentation such as endorsements and policy pages, assistance with setting up a program, and regularly scheduled meetings to ensure you are meeting your compliance and risk management goals.
Choosing the Right Option for You
There are strengths to each type of solution, but your choice should depend on what your objectives are. Because COI tracking generally is there to transfer financial risk, it is best to evaluate what types of risk you may encounter as well as what efficiencies may be gained from each solution. Some questions you should ask yourself to help evaluate your needs are:
What type of volume do you need to manage?
Would paying someone to handle phone calls, hiring and training be more efficient and affordable in-house or outsourced?
How much internal training is provided on insurance nuances specific to you? For example, if you’re in the car service industry, would your team know how to handle a contractor that is telling you they don’t need general liability because their garage policy covers the same thing? If they made an error, what would it potentially cost your organization?
Are you experiencing denied insurance claims due to accidents and how often?
Is your organization paying for faulty products or services that were the result of a contractor and how much is it costing you?
What is your most likely worst-case scenario for an accident and the contractor had a gap in coverage? Is this something that would put you out of business, would you recover, or somewhere in between?
If there were a serious accident, could having a lackluster program impact your reputation, especially with your suppliers and buyers?
Once you’ve evaluated your risk thresholds and any efficiencies that may or may not be secured by each solution, you can weigh your options. Below are some comparisons for each:
Smaller network of contractors where you can still devote some resources
Paying someone to manage the entire process does not create either a hard or soft return that is worth it
With a little efficiency boost gained from the software, you can run a better and/or more complete compliance program
You have effectively trained individuals to process the COIs
Your risk is low
Your insurance requirements are very basic and do not require items, such as endorsements or less basic policy types that are simple to interpret
Your current program is, for the most part, running smoothly, but would benefit from some additional automation
Large networks where resources are devoted to managing outside of the automated process. Outsourcing can have significant soft and hard returns
Small and large networks with high risk
Finding the time to effectively train individuals is difficult or non-existent
Your collection and renewal process is decentralized. COI services are very efficient at creating a central point for collection instead of it going to field offices over a large geographic span.
Experiencing fast growth in your network and unable to devote or keep up with the work
Need a subject matter expert and experienced team to help solve your pain points and help with best practices.
Deciding to outsource your COI tracking and with which solution is no small decision. It takes time to evaluate how your current program is doing, what your risk thresholds are, and how you would benefit from each offering. No matter what your choice is, taking the time to improve your COI tracking process will provide many benefits and show due diligence. Contact us today to learn more about how our COI Management services can benefit your organization.
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 our website.
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