Ensuring Uniformity in your Certificates of Insurance
Being unprepared for anything you do in business or in life can set you up for failure even before you begin. This includes ensuring that your organization’s workflow and process for handling Certificates of Insurance is treated with the same standard of preparedness, so as not to leave your organization open to future problems.
How Important is Uniformity?
Does it really matter if every little standard is not met? Does it really matter if a vendor is non-compliant? When it comes to mitigating risk, it does. Even little differences in standards can have major implications and cause major issues if there is a claim brought against your organization.
In some instances, the need for uniformity goes beyond what a specific organization or general contractor requires. Certain advisory boards or state government departments may have their own set of standards which must be followed to remain legal and compliant. When applying for state or federal grants or contracts, all those involved in the project from contractors to subcontractors must have uniformity and meet the standards required by the project/contract.
Preparedness Through Uniformity
Uniformity is one way to prevent problems in your contractual requirements and thus mitigate risk. Not all contracts are created equal but using a software system that helps create a standard by which Certificates of Insurance must adhere is a step in the right direction.
Uniformity can be achieved through the creation of risk profile templates within your certificate tracking system. Vendors with the same insurance requirements can all be organized within the standards set up through vendor profiles. This can happen easily when your system is organized, and COIs are tracked correctly from the beginning.
Examples of Nonuniformity
- In some instances, an organization might have agreements that have been acquired through an acquisition or a purchase. An agreement that has been grandfathered will need to be tracked through uniformity by a similar term to the rest of your COIs. In some instances, those older certificates will have been handled by an employee who potentially did not have uniformity in mind and was unsure what proper insurance coverage is.
- Vendors responsible for completing large tasks, taking months to complete will have specific insurance requirements that differ from vendors whose tasks take less than a week to complete. While it may not seem that there is any uniformity in their requirements, that is not the case. There will be some information that will need to be similar in both instances so tracking for and ensuring uniformity is still important in this situation.
Practical Steps for Ensuring Uniformity
When organizing documents as described above, the best ways to ensure uniformity is:
- Summarize all documents and track the insurance information including the differences in what your organization is currently requiring and what an old document is covering. It is important to note the differences clearly.
- Bring older documents in line with your current standards whenever possible.
- Set up a meeting with Risk Management, your insurance agent, or risk consultant, and agree on standardized insurance requirements going forward. Then apply them consistently.
- Create customizable risk profile templates. Meaning that before a new vendor is hired, they must adhere to insurance standards put in place by your organization and administered by a software program. Any vendor that does not meet those standards will be flagged as non-compliant.
No organization asks for non-uniformity in their documents, it can happen for several reasons. But being prepared and handling your workflow through software that uses automation can virtually eliminate the likelihood of errors and help to mitigate risks.