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What is a Certificate of Insurance?

A certificate of insurance (COI) is a document that is issued to a policyholder as confirmation of insurance coverage. The COI provides the core details of the insurance holder’s policy (name, dates, etc.), along with the basic terms of the coverage they’re set to receive. The policyholder is then able to share the COI with a third party that is interested in receiving the contractor’s services. This transfers liability risks from your company to the third parties.

Why is Risk Transfer Important?

When you transfer risk, you are protecting yourself from claims against your insurance policies when the liability can be transferred to the person or entity that caused the accident.  As a result, your insurance rates could be reduced. Your insurance broker should be informed if you obtain COIs for transferring the risk to other policies.

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The Construction Industry Has Extremely High Risks

As projects become bigger, they also become more complex. With complexity comes a higher chance of risks. Injury, being one of the most serious risks, happens quite frequently on construction sites. The Bureau of Labor Statistics reported there are roughly 150,000 construction site accident injuries each year.  Similarly, EHS Today stated that on average, two construction workers die of work-related injuries in the United States every day. Most accidents are due to being struck by an object, a fall, electrocution, or being crushed by building materials. It should also be noted that ensuring construction workers in most states under Workmen’s Compensation is one of the highest policy premiums you will ever pay.


Other Risks

Other likely risks could be a timeline failure or incomplete work. Timeline failures may be covered by surety bonds. In these events, COI tracking can help determine which party is responsible for what contract failures without involving expensive compliance experts.

Tracking certificates makes it much easier for your legal counsel to complete the claims process. If the insurance payouts are faster, there are fewer hours billed to your legal counsel meaning more money and less headaches for you.

Natural disasters are another risk that the construction industry needs to be concerned about. It’s important to make sure documents are protected even in the case of a worksite fire or flooding. CTrax, our COI tracking software uses OCR technology to extract, store, and update the data from COIs with over 99% accuracy and minimal input – making physical documents useless.

Third-Party Involvement

Throughout the construction process, there are countless subcontractors involved, who are responsible for multiple parts of the project. Unfortunately, it’s unlikely that every contractor has the required coverage to participate. In fact, according to a study done by Insure, 75% of U.S. businesses are underinsured, and 40% of small business owners have no insurance at all.

It’s important due diligence is done to make sure that every contractor working has compliant, up-to-date insurance. If not, you may be held responsible for costly mistakes and/or accidents they could cause.

A COI tracking system will ease the burden of this task by automating the process of looking for gaps in coverage as well as the renewal steps to take to ensure compliance. With the software, you’re able to know exactly what coverage you have in the event of an accident or other insurance-triggering incident.

Advantages of Using Technology to Track Certificates


CTrax is a powerful COI tracking tool that uses OCR technology to extract, store, and update the data from COIs with over 99% accuracy and minimal input. Users are able to upload hundreds of certificates at a time in an organized manner that only requires a few mouse clicks.

CTrax’s automated functions are able to provide reminders and send out renewal requests for expiring certificates according to the user’s pre-configured specifications. This eliminates the risk of retaining contractors that do not possess the necessary coverage by ensuring that their insurance information is always up to date.

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