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The best way your organization can mitigate risk and be prepared when a claim is made against you is to ensure your vendors and subcontractors have the adequate coverage to pay for the damages they may cause before they begin work, or perhaps even before they are allowed on the property. When you are prepared you have taken the necessary steps today to plan for the future. How this relates to Certificates of insurance is the necessity of tracking your certificates, ideally through an automated system.  

When Is It OK To Not Track Your Certificates of Insurance? 

Is it necessary to track your certificates with an automated system? The short answer is no but it is necessary to track your certificates unless you want to take on a large amount of risk. We think it is never OK to not track your COIs.  Tracking certificates through automation is the best way to stay on top of who is insured properly to work with your organization and which individuals or vendors do not have adequate coverage.  

In the event of a claim, it is imperative to access COI information quickly which is easier to do through an automated system that has a well-functioning search component. If you are tracking COIs correctly, even before a project begins, then you will be confident that all Certificates of Insurance in your system are up to date and have adequate coverage. In a completely opposite scenario, if your organization has not taken the time to track certificates to ensure the correct coverage when a claim is made against you, problems may arise and your organization may need to pay for the claim out of pocket.   

Business report with colorful graphs and a red pen.

Steps to being prepared 

Request Certificates of Insurance 

At the bare minimum, your organization should be collecting Certificates of Insurance from your contractors, and vendors for anyone else who will be doing business with your organization or on your property. If you are using JDi’s CTrax software, Certificates of Insurance would be uploaded directly into the software by the vendor through the user-friendly vendor portal. You can even transfer the cost to your vendor by charging them when they upload the certificate. 

Verify the coverage 

If you don’t look at the COIs from your vendors or subcontractors and compare them to the compliance requirements, you are not doing the job correctly. Each project will have its own insurance requirements and those who are working on that project need to have adequate coverage. You may be given a Certificate of Insurance, but it is up to you to verify if it is a legal document and if the coverage meets the requirements. Call the insurance broker to ensure they are a legal company and to check that the policy is enforced and the coverage limit is correct. You can also ask for a deck page outlining details of the coverage. Pay attention to the details by examining the policy’s effective and expiration dates and description of operations section as well.  

Monitor and track the insurance as the project continues 

The next step for those who are risk-averse would be to track certificates of insurance and keep track of coverage limits, additional insured, policyholders, exemptions, and expiration dates. A staff member within your organization would be tasked with keeping that information up-to-date and noting any changes. They would also be tasked with ensuring that coverage is adequate and when a policy was set to expire.  This is a big task if you have a lot of vendors, subcontractors, and projects. It can be done manually, but again an automated system will make the process go smoothly with built-in reminders and email sequences for COI renewals.  

Can I afford to take the risk by not tracking COIs? 

Owning and running a business costs money. But how much are you willing to save or spend to ensure you are running your business correctly? There is no denying that tracking Certificates of Insurance is going to take time and money to perform the task correctly, but what will it cost you if you don’t?  

Organizations that are unprepared or do not see the importance of tracking Certificates of Insurance are the ones putting themselves at the most risk. One must ask, “How much do I value the necessary steps needed to be taken in order to be compliant?” It also comes down to risk tolerance. How much risk are you comfortable with and how much risk do you want your organization to take?

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In most cases, those with a high-risk tolerance do not have a strong want to track vital information and they are willing to pay for a claim out of their own pocket. Even if you are financially able to pay out of pocket, one claim paid personally will set off a sequence of problems with insurance policies and coverage and you may be denied coverage in the future.  

Mistakes Happen 

If you didn’t trust the vendors or subcontractors that you are working with to do a good job, you wouldn’t have hired them in the first place. It is impossible to know when problems will arise or when their work will not be good enough. Planning and being prepared for failure is what we always suggest. Mistakes can happen within your organization as well. 

Employees stop looking at their company’s Certificates of Insurance when it becomes too overwhelming, there isn’t a proper workflow in place, or they just don’t see it as important.  

In the case of manually tracking certificates of insurance, mistakes can be made due to human error. Amounts of coverage could be entered incorrectly, or expiration dates of coverage could be missed. These are simple mistakes that could cause problems in the event of a claim. 

At JDi, we believe that failing to track your Certificates of Insurance is one of the riskiest moves you can make when it comes to liability for your organization. We also believe preparedness is the key to success. For over 30 years our team has created technology that redefines how organizations work. Listening to the needs of our clients led us to create a solution that is intuitive and leads the way in innovation. Using an automated tracking solution is the best way to mitigate your risk and it can take you from being unprepared to have all the information you need in an organized and easy-to-track manner. 

Automation will work for your organization and we look forward to showing you how. Schedule a product review with one of our risk experts today.  

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Readily Available COI Forms
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How to Create, Search, Edit, and Export Projects