When accounting for risks related to contracted work, securing your own insurance is not always enough. It’s critical that your partners are covered as well. This is particularly important when you consider that, following an incident involving a contractor or vendor, your business could be the one held liable for any damages that occur.
For the insured, COIs serve as proof of coverage—proof that can be provided to customers, contractors or other third parties quickly and efficiently.
To protect against this sort of risk, many organizations turn to certificates of insurance (COIs). COIs are used across a variety of commercial business relationships and essentially serve as proof that a particular party has an insurance policy in effect at the time requested.
While you may require your partners and vendors to carry insurance in your contracts, coverage needs can change quickly, making it necessary to regularly review the policies. In addition, contractors and vendors may not be honest about what insurance they have in place, making you wrongfully assume you are protected.
Before allowing contractors to perform work on your property or on your behalf, asking for a COI is a must. This can help you in several ways:
Managing COIs can pose an administrative challenge, and businesses need to have procedures in place to collect and maintain them effectively. Many organizations choose to automate this process as much as possible, opting for systems that notify them when a COI is required.
To learn more about COIs and their complexities, contact Chalmers Insurance Group today 800-360-3000.