Risks are something you can’t avoid in any business – whether it’s construction, trucking, delivery of goods, or even cleaning. They are an integral part of any work process, and, of course, it is necessary to do everything possible to reduce their occurrence.
This is important for companies that hire third parties to perform subcontracting. These can range from large financial companies with a broad business focus to smaller companies involved in specific industries. These include:
- Food Service
- Public Entities
- Risk Managers
- Insurance Broker
- Real Estate
As an example, Uber, which hires a large number of drivers to provide transportation, or Tesla, which also makes extensive use of subcontractors are exposed to risk. Such companies can be listed endlessly because this business model is very popular today.
Therefore, the CEO of any enterprise, business, or industry should set a strict rule to ensure a comfortable and safe working environment, as well as procedures, and proper protection in case something happens.
However, it is impossible to predict everything, and no matter how carefully you plan your defense against trouble, it will still happen. That is why it is important not only to minimize risks in the business but also to have a mechanism to protect the interests of both the organization and the affected party.
Insurance is important because:
When an insured event occurs, payments for insurance claims can easily exceed tens of thousands of dollars, which can have a significant impact on your business. Here are a few examples of such cases:
A worker sustained severe bodily injuries to his chest and arms at work. The court ordered the injured worker to receive more than $500,000
The gymnastics instructor suffered an arm injury and underwent two surgeries. He was subsequently unable to practice professionally, and as a result, the court ordered the responsible party to pay $11,360 each year.
A hotel chef suffered a serious finger injury while using a meat grinder. Although it was a safety violation, the court sided with the claimant and ordered the hotel to pay all unpaid medical bills, future medical care, the right to additional temporary disability, and the right to receive a one-time bonus.
You can read more about these cases at the link:
As you can see, having insurance is extremely important. No matter what your company does, its efforts should be focused on providing the best products and services, not on solving problems related to accidents.
Certificate of Insurance (COI)
Business insurance should be a top priority. However, it is not as simple as it may seem at first.
If you are the injured party and you are requesting compensation from the person or entity who caused the injury, insurance may protect you in the event the entity is bankrupt, out of business, or just plain negligent.
The fact is that there is no universal insurance that covers absolutely everything that can happen. You have to ensure employees, equipment, the building, and everything related to the enterprise. In particularly large businesses, the number of insurance coverages can be in the dozens or even hundreds.
Keep in mind that each insurance policy includes many parameters. And if your company has more than a few dozen insurances, you can get confused and lose important information, such as the term of insurance, contract terms, and more.
Now imagine this situation: you are going to build a large shopping mall. For this work, you hire several specialists from an outside organization. If an accident happens during work, and these workers are not insured, all the costs of compensation for damages will fall on you. In other words, you also have to keep track of third-party insurance.
A certificate of insurance is something that will help you. It was created to facilitate these tasks. It is a document that contains all the basic details of an insurance policy in a simple and easy-to-understand format. The COI is designed to confirm policy status, provide quick access to coverage details, reduce exposure and protect against third-party liability.
This is what you will use when an insured event occurs, and this is what you will demand from other organizations when you hire outside workers.
It is this that you will use when an insured event occurs, and it is precisely this that you will demand from other organizations when hiring third-party workers.
Certificate of Insurance Tracking
If your business involves many third-party organizations, each must have its own Certificate of Insurance. There is a risk of getting confused in a large number of insurance documents.
You can use manual procedures to track coverages, but then again you run the risk of getting tangled up in paper, file cards that contain a lot of key points and important information. Failure to consistently track insurance documents can lead to missed coverage, non-compliance, putting your organization at reputational and financial risk.
Fortunately, with today’s software, your organization can move insurance certificate management into electronic form by equipping your team with the most robust tools to import, store and track insurance certificates as well as other important documents related to them.
Certificate of Insurance Tracking is a series of software solutions that help automate all processes related to the movement of insurance in a company. This applies to your business as well as the third party you do business with and whose employees you engage to do the work.
It has many advantages:
- You can easily monitor every insurance policy in your organization. For example, if your insurance expires or if any changes are made to the policy, you will be notified automatically. The process is the same for both sides – your partners will also receive similar notifications, so they can contact you immediately and take any necessary action.
- You will get complete information about your organization’s insurance coverage and be able to identify weaknesses and vulnerabilities. This is especially important when your company has multiple insured items at its disposal. For example, you can easily identify that one of your units has uninsured equipment and take steps to address it.
- You will increase your organization’s security by centralizing control of your insurance documents, thereby protecting yourself from unwanted risks and the costs of covering them.
Certificate of Insurance Tracking is also important when dealing with third parties. Making sure that all parties are insured is very important to establishing a trusted bilateral relationship. Not only do you need verbal assurance that the company you are working with is insured, but you also need to have a current certificate of insurance to prove it.
With a COI tracking service, you have access to a reliable and up-to-date registry of insured organizations. You can make sure that these organizations are not only able to provide the services you need, but also have the proper insurance to protect your business from unnecessary expenses. This is especially important when your business is high-risk and you need a lot of outside organizations to work with.
It’s safe to say that COI tracking is one of the most important risk management steps you can take for your business. Certificate of Insurance Tracking allows you to focus on achieving big goals and optimizing your business, not on solving problems related to accidents and disasters.