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:
- Delivery
Every delivery and transportation company must have insurance coverage to cover everything involved in a transportation-delivery scenario. Possession of a COI just signifies that your movers or the firm offering you its services on the property once held an insurance policy that covered some of their non-negligent business activities. A COI indicates that the vendor or the carrier had sufficient insurance.
- Aviation
Aerospace, airlines, aircraft, and other elements of the aviation network are covered by various property and liability policies under the banner of aviation insurance. Losses brought on by inadequate maintenance, property damage, lost cargo, or traveler injuries are all covered by aviation insurance. Overall, this line of insurance aims to safeguard passengers, operators, and aircraft owners. Each type of aviation insurance provides coverage against risks related to private and commercial flights, airline equipment, ground staff, etc.
- Construction
A Certificate of Insurance for your construction project establishes trust between your business, the client, and the investors. Companies can create a safer and more professional atmosphere for any project they take on by adhering to the insurance coverage requirements. A COI for the construction industry safeguards the project’s owner if one of the suppliers or subcontractors working for them faces legal responsibility. Usually, it is in addition to the building owner’s insurance policy.
- Food Service
The types of insurance that food vendors require to shield their companies from financial loss due to liability claims are referred to as food vendor insurance. Food vendor liability insurance is necessary for any company that sells its food products to the general public. Mobile food vendors, one-time event vendors, and concessionaires also require food vendor insurance. Vendors must be aware of dangers and choose insurance plans to cover them.
- HealthCare
HealthCare is one of the industries constantly exposed to risk because it is in charge of dealing with human health, and many things can go wrong there. Certificates of insurance are crucial to the healthcare industry because they give the parties concerned critical details about the conditions of health insurance plans. People can use these details to make knowledgeable healthcare decisions.
- Hospitality
The property coverage of insurance often provides coverage for different types of risks in the hospitality industry, such as vandalism and theft. The particular text of insurance will specify what incidents and property are covered. Check any hotel’s policy to ensure it will cover the main structure, supporting structures, equipment, and fixtures. Commercial property insurance often covers storms, fires, and other comparable dangers.
- Manufacturing
Whether you produce goods for the food, aviation, automobile, medical device, or even the furniture industries, people’s lives depend on what you do. Manufacturing operations, therefore, carry a significant amount of possible liability concerns. A wide range of situations is covered by insurance for manufacturers. The comprehensive insurance plan provides coverage for any property damage and physical harm you may cause to others due to your business operations. As long as the allegation is a covered claim, this coverage will also cover the costs of defending against legal accusations, including attorney fees.
- Retail
There are many hazards in the retail sector. Retail firms must contend with shoplifting, inventory loss, supply chain problems, customer injuries, data breaches, and competition, which could hurt their bottom lines or even drive them to close. For retail organizations wishing to control their third-party risks, requiring adequate insurance coverage and monitoring certificates of insurance (COIs) are imperative. Third-party liability might not be front of mind right now, but if retail enterprises don’t take the necessary safeguards, it can be disastrous.
- Telecommunication
You don’t need us to tell you that a tiny error could have a significant financial impact if you operate in the telecoms industry. If nothing else, having high-quality insurance will shield you from the costs associated with fixing that error. Customers, landlords, or state regulations may require insurance for cable installers or telecom specialists. Business insurance protects against unforeseen expenses and losses resulting from worker injuries, installer damage, and other hazards. It also shields against financial loss in the event of injury, property damage, lawsuit, or data breach.
- Transportation
The certificates of insurance are essential regardless of whether you are offering motor truck cargo transportation, non-trucking transportation, or any other type of transportation service. The freight broker, the shipper, or a truck dealer closing a contract with a trucker could request COIs to ensure no additional expenses and protect people and machinery from any possible damage.
- Public Entities
A state or local government, as well as any agency, office, or department managed by one, are all considered public entities. Some examples are public libraries, city police forces, community colleges, public universities, county social services, and state organizations for vocational rehabilitation. These entities must safeguard themselves and their users from potential physical or psychological harm if everything is governed by law and follows current legislation. COIs make a significant difference for everyone involved.
- Risk Managers
There are many different risk managers (market risk managers, operational, credit, software risk managers, etc.), but they all do similar things. The main difference is the business branch they are offering their services to. Since they handle legalities and help parties reduce expenses, they should always equip themselves with up-to-date COI trackers. Risk managers without COIs and COI trackers are doomed because it is challenging and time-consuming to sort and manage all certificates. Sometimes, a vendor you are working with won’t acquire the necessary insurance protection until they have been chosen for a bid or contract.
- Insurance Broker
An insurance broker is a regulated financial adviser specializing in general insurance. Their primary role is to help independent parties choose what type of insurance and coverage they need while offering and recommending a suitable and affordable policy. You pay them by the commission, and they help you sort your legalities related to insurance. Now imagine an insurance broker without a COI tracker – Impossible! Handling numerous clients and sorting lots of legal documents and pieces of information is tiresome, so insurance brokers should ensure their trackers are always up to date.
- Real Estate
The majority of property management companies are aware that they must be listed as additional insured with tenants, suppliers, subcontractors, etc. (collectively referred to as “third parties”) and will set up a procedure to collect certificates of insurance from third parties, examine the dollar amounts on the form to ensure compliance with the contract or lease, file them, and make an effort to get new ones before each policy expires.
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: https://stromlawyers.com/case-studies-workers-compensation/
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.
COI 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.
