It’s no secret: getting—and validating—certificates of insurance (COIs) can be a tedious process. And because of that, many people choose to check only expiration dates. However, without a review process that goes beyond expiration dates, you can’t guarantee contractual risk transfer. That means you could be in for a rude (read: expensive) awakening.
Increased Risk From Uninsured Subcontractors
Having uninsured subcontractors—whether you’re aware they’re uninsured or not—reduces the value of your indemnification agreement. You also become responsible for any payment for injury or damages that would have been the responsibility of the lower tier.
If an audit finds that your subcontractor does not have the proper insurance (or no insurance at all), you will be charged the extra premium based on the subcontractor’s payroll as if that employee were on your payroll.
Information Not Coverage
Even if you have accounting software that will collect and store the expiration date, you’ll want to check the contract requirements, because the COI is only information—not coverage.
Yes, you read that right. The 8th edition of Black’s Law Dictionary defines a COI as a “document acknowledging that an insurance policy has been written, and setting forth in general terms what the policy covers.” In other words, you’ll need copies of endorsements.
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.
