If you hire service providers to do work for you, you know how important it is to get proof of insurance before they start a job. If a subcontractor doesn’t have the right coverage and an incident happens, your business could be held responsible. A lawsuit or unexpected claim can have a big financial impact.
Luckily, automation can reveal gaps between a vendor’s coverage and your requirements.
Why you absolutely must verify COIs
Most businesses collect Certificates of Insurance from their vendors as proof of coverage. But it’s not enough to request COIs and file them away in a folder. If the COI doesn’t meet your company’s specific insurance requirements, or if it’s fraudulent, it won’t do you much good.
You must verify the COI by reviewing the coverage and comparing it against your requirements. This will help you identify coverage gaps – differences between the policy details you require and the policy the vendor has.
Humans make mistakes
At HoundDog, examining the details of COI is our idea of a good time – but not everyone feels this way.
Doing this process manually is a tall order that requires:
- A thorough understanding of the coverage your company requires of each type of vendor
- Familiarity with the ACORD 25 and other less-common insurance documents, including exclusions and endorsements
- The time and experience to call insurance agents and/or carriers if questions arise
When you manually review multiple policies with multiple vendors, there’s a good chance your accuracy is not 100%. Maybe a vendor does have workers’ compensation as required, but the limits don’t match your agreement. Or perhaps that little box wasn’t checked to indicate the owner’s exclusion from the policy.
The reality is that humans make mistakes and oversights, especially when performing a task that doesn’t have their full focus.
Those oversights could result in a lawsuit, unexpected claim, or premium hike during an audit. In these cases, the costs to your company could rise into the tens or even hundreds of thousands of dollars.
How automation can help
If collecting, verifying, and tracking COIs sounds like a lot of work, that’s because it is. Many organizations have systems in place that fall short, either because the process is flawed or because they simply don’t have the time required.
Unfortunately, these organizations are exposed to unnecessary risk. Using software to automate your insurance verification process can help you spot coverage gaps in seconds and fix them before a vendor begins work for you.
After spending decades in the insurance industry, we developed HoundDog to do just that. Together, we’ll load your insurance requirements and business partners into our simple platform. Then, we work directly with your vendors to verify they have the coverage they need. If they don’t, they’re shown as noncompliant and we’ll get in touch with their insurance agent.
So you can move forward, knowing your business is protected.
>> Want to see it in action? We’ll show you in a 20-minute demo. Schedule yours now.
