Companies should do the legwork when it comes to ensuring that their vendors, tenants, or borrowers are insured properly. This is to protect themselves from financial losses and potential lawsuits.
With that said, following through with the mammoth task of managing your certificates of insurance is easier said than done. And what ends up being the biggest challenge is not the large volume of certificates to review, but rather the contracts that are not compliant, fraudulent, expired, or worse, cancelled soon after submission.
Read on for some insights on managing your certificates of insurance effectively:
Get a Certificate Tracking Software
Marking your calendar or setting a reminder on your phone a few weeks before the renewal date of a certificate will help you keep track of the certificates, but there is a more efficient option: insurance certificate tracking software.
This software allows you to easy collect, store, and monitor all types of data regarding your certificates of insurance. With the software, you can easily meet your contract requirements.
Review Certificates ASAP
As soon as you receive a certificate of insurance, review it. Make sure the policy dates are current. Check what coverages are provided, what the policy limits are, and whether the certificate indicates the coverage limits you need.
Make sure that the limits are spelled out in the contract as well. This is extremely important, because the usual $1-million dollars’ worth of liability coverage does not go far with today’s juries.
Ask for More Than Just the Certificate
You already probably know that businesses should always ask for a certificate of insurance from each vendor, tenant, borrower or anyone you do business with. It’s important, however, to do more than just ask for the certificate, especially on liability policies.
Ask to be named as an additional insured and request a copy of the endorsement. You’ll need this if you have to request a defense under that insurance policy.
Always keep in mind that certificates of insurance are crucial to business success. The better you manage them, the less likely your business will encounter difficulties down the road.