Companies can best protect themselves from claims incurred by third parties by regularly collecting and verifying certificates of insurance. Here are some insights into the severity of the issue and best practices for staying on top of COIs.
Way too often, verifying the insurance coverage of third-party business partners is reactive.
In reality, unverified insurance is a sleeping giant, waiting in the wings to potentially demand thousands of dollars in claims that your company is not even responsible for.
Rather than irresponsibly running your business on a “hope and a prayer,” companies must proactively collect certificates of insurance (COIs) from all third-party providers/businesses in a responsible and timely manner, or face potentially significant claims themselves, without any responsibility from the subcontractor or vendor who may have been responsible for the loss.
Properly transferring risk, by insisting all business partners provide up-to-date COIs can also avoid unnecessary delays or disruptions in work. Insisting on gaining COIs before vendors begin work or are even allowed on premises protects your business first.