Computer science pioneer Grace Hopper said, “The most damaging phrase in the language is ‘We’ve always done it this way.’” This rings especially true in the business world when organizations often stick to established processes long after they’ve become inefficient. If it ain’t broke, don’t fix it – right?
The reality is that a system doesn’t have to be completely broken to be hemorrhaging resources. For many businesses that hire service providers, manual Certificate of Insurance tracking is one of those systems.
Just how much is your business losing by manually tracking COIs? Here are some areas that could be costing you.
The time drain: Minutes add up
During conversations with customers, we’ve learned that it’s difficult to nail down just how much time you spend managing vendor insurance documents. Business owners aren’t sitting down for a four-hour block of organizing and verifying COIs.
Today, it’s five minutes digging up a certificate before a returning subcontractor starts a new job. Last week, it was 30 minutes on the phone with an insurance agent verifying policy details.
In terms of the time you or your employees spend actually tracking documents, it might be an hour or two per vendor per year. Or, if your records are messy or vendors don’t comply quickly, it could be much more.
Either way, the true cost of manual COI management lies not only in the time your employees spend, but also in the opportunity cost and the increased risk your business faces.
The opportunity cost: Inefficiencies drag you down
Very few businesses hire someone dedicated to managing vendor and subcontractor COIs and related documents. Typically, this duty falls on someone else’s already-full plate. The business owner, a risk manager, an administrative professional.
If you work with 50, much less 500 or 5,000, you’re spending about hours and hours cumulatively collecting and reading thorough COIs. So you must ask: What else could you accomplish with that time?
Following up with insurance agents and scrutinizing certificates is an inefficient use of a human’s time. What innovation and creativity could happen in your organization if you removed some of that manual work?
By introducing automation to your COI management process, you’re opening new doors to spend time on higher-value activities for your business.
The risk: Human error has big implications
Time savings are a significant benefit of automation, and it’s often what attracts our customers to HoundDog in the first place.
But there’s an even more critical aspect: risk mitigation. It’s the why behind collecting COIs. The reason you require COIs and verify insurance information is to reduce your company’s liability exposure. If a vendor or subcontractor doesn’t have the right coverage and an incident happens, your business could be held responsible.
When you manually review multiple policies across multiple vendors, there’s a good chance your accuracy is not 100%. The reality is that humans make mistakes and oversights.
Those oversights could result in lawsuits, unexpected claims, or surprises during audits that cause insurance premiums to skyrocket. In these cases, the costs to your company could rise into the tens or even hundreds of thousands of dollars.
Herein lies the real cost of relying on manual COI tracking.
The solution: Save your business from “We’ve always done it this way”
If you’re still using spreadsheets or other outdated systems to track your vendor insurance compliance, you could be wasting significant time and resources – or worse, exposing your company to unnecessary risk. Be the hero in your organization by exploring new ways to improve your processes.
Automating your insurance tracking can help you better protect your business, and spend less time doing it. We’ll show you how. Schedule a meeting with us to see the HoundDog platform in action.
