One daunting task is keeping records of contractors, tenants, suppliers, and vendors’ Certificates of Insurance in every property management company. It is time-consuming and tedious to ensure each certificate is verified and renewed on time. This is one of the top priority jobs for every property manager.
As a property management company, it is dangerous to secure new clients without a certificate of Insurance. Most Managers do not want to assume the risk that might occur. COIs are necessary to cover any losses affecting contractors, vendors, tenants, or suppliers. To avoid costly lawsuits, ensure all the COIs are verified.
What is a Certificate of Insurance?
This document outlines the vital details of any insurance policy and acts as proof of insurance as of date issued. It is a picture of an insurance policy that can protect a property management company or any other company against risks by a third party.
Who needs a certificate of Insurance? It is essential for every business, whether small or big; every entity needs this certificate as part of the risk transfer process. They are crucial documents in all sectors that use contracted labor. They help companies by additionally ensuring the risks in case of damages and accidents, but they need an update upon expiration between the insurer and the insured.
Why Property Managers Need to Track Certificates of Insurance
It is important to insure every property with the correct Insurance to avoid serious risks in a property company. Each property needs a specific type of insurance coverage. Most of the time, contractors, vendors, and tenants fail to have the required and necessary insurance coverage required by your agreement.
Before signing any agreement, anyone working or leasing in your company must provide a certificate of Insurance that has the correct coverages, protects your organization from exposures, and insureds are compliant. Why do they need to keep track of these certificates?
Reduces general insurance and premium liabilities
You cannot predict damages and accidents because they can occur anytime. In case they occur, and your vendors, contractors, tenants, or suppliers do not have the correct type of Insurance, the process becomes expensive and challenging to anyone involved, but mostly the property owner. By tracking records of COIs and ensuring they are correct, when certain incidents happen, the Insurance will cover the loss, thus reducing exposure and premium increases.
Better service delivery
The property management sector is bustling. Property owners may give most tasks such as financial planning, rent collection, marketing, lease negotiation, and contract administration, among other duties, to property management companies. Due to their extensive workload, they quit insurance monitoring, a very costly error. Minor issues such as unplanned maintenance, rent collection, and marketing take a substantial amount of time in many firms.
Companies that comprehend the significance of tracking insurance certificates often gain a great deal in the long run. It offers several benefits to the firm. The focus of property management businesses is on the property owners’ profits, while other organizations deal with the contractors and renters.
Why is your real estate firm preferable to others? Companies that want to acquire new customers have a superior response to this issue. They are aware that customers do not like to take risks in business; thus, monitoring their COI encourages clients to sign contracts with them.
Continuous compliance guarantee
The insurance certificate must be renewed or updated periodically throughout the lease term. Tracking coverages lets property managers know when to update, change, or even renew COIs, ensuring continual compliance.
If COI is not updated when accidents and damages occur, it is difficult for the property owner to get compensation from the insurance company.
Effects of Not Tracking Certificate of Insurance Effectively
- If you fail to give a property owner’s insurance certificate in the event of a loss, it will take longer for the legal advice and case delegates to complete the case interaction modifications, resulting in high suit expenditures.
- If your COIs are not up to date, you will likely be exposed to damage claims you may not be responsible for.
- Imagine that your insurance firm wishes to conduct a premium audit, but your company fails to produce evidence that the insured has insurance. In such a circumstance, the cost of your insurance premium would rise.
Streamline and Automate the Tracking Process of COI
In the past, everything was conducted manually. Collecting the COIs required picking them up and manually tracking them. This activity was incredibly costly, laborious, and time-consuming. Today, technology has simplified this procedure.
The use of tracking software may help property managers save time and money by eliminating the need for paper printouts, file cabinets, Outlook reminders, and Excel spreadsheets. These applications are easy to use and make automation more straightforward.
Property managers can automate the process of collecting rent, manage everything in a single place, improve accuracy, and do away with the manual data input process thanks to the software. COI compliance should be the first duty during onboarding; hasty attempts to collect COIs from vendors, tenants, or contractors when they want to start or stop working should be avoided. A simplified internal process should be created, treating COI documentation like any other corporate procedure.
COI software is essential for any company that manages properties as it enables tracking and automation. Many different software programs may be found on the web. Conduct research to find which of the available options is the best fit for your company before making a decision.
Final Thoughts
Every business must have insurance coverage that covers its expenditures in the event of accidents or losses. This coverage will put your business in a better position to cover accident-related liabilities. The COI should constantly be updated, modified, or canceled for the insurance to reimburse in full. The tracking process should be a significant concern but may be simplified by automation. Your firm will get new customers due to the insurance policy’s comprehensive risk coverage.
We encourage you to contact CTrax for consultation or help in enhancing your processes.
