For those where compliance is a priority, the process of gathering certificates of insurance and communicating with vendors, subcontractors, agents and brokers to connect all of the insurance dots can be confusing and downright time consuming! You must determine who holds the ultimate source of truth. How can you, as a compliance administrator, make sure you’re getting the right information to ensure the proper coverage required by your organization exists? Do you rely on the vendor to provide you the correct documentation? Who do you go to when resolving important compliance issues, like an expired policy or an incorrect endorsement?

The Problem With Relying On Vendors & Contractors

When you’re asking each new subcontractor for proof of insurance, it’s common that the vendor doesn’t actually have full insight or knowledge into the details of their policy and the nuances, like additional insured endorsements, waiver of subrogation, and other technical nuances. Let’s be honest, insurance language is confusing and terms can quickly become jumbled together. So trying to resolve compliance with a vendor or subcontractor that does not understand the insurance terms can lead to a dead end.

But there’s also a larger problem with relying directly on vendors and subcontractors as the source of truth for verifying insurance coverage. Vendors have a financial interest in saving money and cutting costs wherever they can, including reducing coverage or opting out of certain required policy requirements. And while it’s unfair to think that all vendors are trying to slip something past you, you have to be careful that the vendor is not providing false information or a fake certificate. These “fake certificates” are actually much more common than you might think and can be very difficult to spot. By communicating directly with the insurance agent, you can determine if the coverage actually exists or if the vendor is trying to pass off a fake certificate.

Finally, relying on the vendor or subcontractor to collect a certificate and resolve compliance issues creates a telephone game, and we all know that the telephone game never works! Insurance terms are confusing and the vendor may not communicate the needs correctly to the agent, which ultimately means wasted time for everybody and delayed compliance. Why add a middleman into the communication path if you don’t need to?

Bridge The Gap With Agents & Brokers

Rather than relying on the vendor, which as described above could result in incorrect coverages or unsolved compliance issues, it’s in your organization’s best interest (and your best interest to save valuable time) to skip the middleman in the process and work directly with the agent or broker that is providing the coverage. Working directly with the agency will help you to ensure the information is accurate and the policies have the correct coverage, limits and endorsements to protect your organization from huge financial risks and resource drain should something happen involving a subcontractor or vendor.

Ultimately, agents can help solve compliance issues quickly, and they can provide the source of truth as it pertains to expiration dates, coverage, and ultimately, meeting insurance requirements. Because agents and brokers have a direct line to carriers, they can solve issues quickly and you can rest assured that your organization is protected.

Let Lumie handle the paperwork

Keeping every certificate current is a lot to ask of any team. illumend, from myCOI, reads each certificate and endorsement against your requirements, flags what’s missing, and follows up with your third-party partners for you. You’ll see who’s covered, and who isn’t, without chasing a single email.

Want to see it in your workflow? Schedule a demo and we’ll show you how illumend fits.