Why COIs matter
Whether it’s a car totaled when hit by another driver or a contractor’s accident that caused damage on a site, subrogation recovery opportunities occur regularly. The key to efficiently resolving an issue is a readily available third party’s Certificate of Insurance (COI).
Insurers who actively track their vendors’ COIs are ahead of the game, since they can immediately move forward in the subrogation process. Those who aren’t tracking COIs may find it challenging to collect once there’s a claim.
The absence of a COI could mean many things: Maybe the third party doesn’t have insurance at all, or it’s expired. Maybe they never sent the information to you in the first place. And even if you do have all your data, locating a sheet of paper in a filing cabinet or a line of data in a spreadsheet can be a challenge.
In any of these scenarios, however, a missing COI costs insurers in a variety of ways, including:
- Money. Without the proper information (i.e., the COI), the insurer might have to pay the claim out of pocket.
- Time. Adjusters have to spend their time tracking down COIs, rather than focusing on resolving other claims.
- Risk. If the claim is open for a long time while you track down information, it can be hard to plan accordingly (i.e., reserve funds or properly underwrite future risk).
Ultimately, insurers depend on third parties to have reliable coverage as part of their risk management efforts, so they need the data to be readily available.