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Contractors Need to Check Certificates of Insurance or Else

Let's say you've done everything right. Let's say you've got all the coverage you need for upstream parties and your specifications to downstream parties spell out exactly what is required by of them. Most contractors think their job is over. All they have to do is keep a current COI on file (upstream or downstream) until project completion. Far from it but this is where the system breaks down. Most contractors have no one on their staff that is trained to "Check" a COI to be sure it matches the requirements in the contract.

What if the insurance carrier(s) is changed and the new one has financial problems?

What if limits are changed?

What if the Additional Insureds are left off the renewal policy?

What if specialty coverage is discontinued?

What if coverage has to be maintained for three years and you stop checking after job completion?

What if your sub didn't even read the spec and just gave you their standard COI? Would you even know?

What if you misread the spec (or your agent did) and you're providing the wrong coverage to an upstream party?

What if you change carriers and you don't realize that the new (and cheaper) coverage isn't as broad as what you had before?

There are lots of "What ifs"; any one of which could be disastrous to your business. So why does no one pay attention to this critical element? Because it takes discipline, consistency, education and training to manage COIs properly.

Most contractors think that all COIs are created equal. That as long as they have the COI they're all set. If something bad happens and the sub doesn't have the right coverage, you can sue them and recover. Maybe. For a serious uninsured claim, the sub won't have millions in their checking account even if you prove them wrong.

Building a process to make COI administration bulletproof does not have to be difficult or intimidating. A Risk Advisor can assist you, guide you or train you to execute flawlessly. Contact us today to learn more.