Are you covered if a vendor or contractor causes damage or injury?

Are you covered if a vendor or contractor causes damage or injury?
                                                

March 2021

The contract you have been working on has finally been signed and completed.  Time to get that off your desk, right?  Wait!  One crucial factor that can be a major pitfall is obtaining and approving the Certificate of Insurance (COI). 

As procurement and public works officials, you understand that part of contract compliance is making sure the vendor has supplied you with the correct insurance coverage, limits, named insured, etc. 

But what coverages do you need and how often do we need to collect them?  Once you obtain the COI from the vendor/contractor, how do you keep track and obtain a new one when the current one expires, which is typically yearly?  What else do we need to look for?

If you are currently using a manual process or a system not meeting your needs, now is the time to automate the entire process.  Accidents happen and you will want that valid and approved COI at your fingertips.  PlanetBids. Inc. is an industry leader for over 20 years in providing a solution to automate the COI process.  Click here to schedule a free Demo to learn more.

Examples of Automation

Janice Unger, Director of Bond Purchasing & Contracts at East Side Union High School District and her six-member team has moved from manual tracking to automation.  According to Unger “…In 2015, PlanetBids, an eProcurement SaaS solution, was brought into the District, moving our team away from the spreadsheets, bid tracking whiteboard, and manual processes. Today, contractors submit all their documents online and no longer need to travel to the District offices to make those submissions.”  A few years later, the District expanded its use of the system by moving online to Insurance Certificate Management. Paired with My Insurance, the District and vendors can conduct all insurance related tasks within the PB System™. The system automatically generates expiration notices, and vendors update the information directly by submitting the newest insurance Acord. According to District personnel, this automation has resulted in considerable time savings and up-to-date insurance certificate tracking, therefore, limiting liability for the District. Key benefits are realized by automating this part of contract management with the PB System™ Insurance Certificate module.Janice Unger, Director of Bond Purchasing & Contracts at East Side Union High School District and her six-member team has moved from manual tracking to automation.  According to Unger “…In 2015, PlanetBids, an eProcurement SaaS solution, was brought into the District, moving our team away from the spreadsheets, bid tracking whiteboard, and manual processes. Today, contractors submit all their documents online and no longer need to travel to the District offices to make those submissions.”  A few years later, the District expanded its use of the system by moving online to Insurance Certificate Management. Paired with My Insurance, the District and vendors can conduct all insurance related tasks within the PB System™. The system automatically generates expiration notices, and vendors update the information directly by submitting the newest insurance Acord. According to District personnel, this automation has resulted in considerable time savings and up-to-date insurance certificate tracking, therefore, limiting liability for the District. Key benefits are realized by automating this part of contract management with the PB System™ Insurance Certificate module.

Speaking with Alisa DeHoyos, Sr. Procurement Manager at the Burbank-Glendale-Pasadena Airport Authority in CA, she shares the importance of understanding the appropriate insurance needed for each contract.  “A vendor who’s working in a terminal area requires different coverage from one working on the airfield, so the coverage and limits may not be the same as for someone who needs to work in a restrictive space where they’ll have access to runways, airplanes, expensive equipment, etc.”

Insurance management tools should be agile and come with the ability to build custom templates to help you identify and request the proper coverages and amounts based on the type of work being performed. 

Once the COI request is sent, it becomes important to track the submission and review for compliance.  It is important the vendor is providing the coverage you requested especially if you are receiving any state or federal funding.  “The danger of not verifying compliance is should you experience a catastrophic event (injury /loss) - the parties involved are going to argue who’s responsible/liable for damages. If you did not verify the vendor supplied you with the appropriate coverage per the contract, you’re going have a battle right there, because the provider of the COI could argue there was an implied waiver of the required coverage. Be sure to check that the service provider has submitted everything the contract requires so you don’t fall into that danger” – DeHoyos.

Managing insurance on a spreadsheet through manual tracking can create high risk. Ensuring renewal notices are submitted, reviewed, and acceptable can be a full-time job.  With budget woes facing many government agencies now due to the COVID Pandemic, how do you keep this up?  An automated system sends out renewal notices to the vendor as well as their broker and lets you know when it’s time review the submitted insurance.

An insurance management software tool should be agile, allowing agency users to:

• Create templates for insurance requirements.
• Automatically send COI request to the vendor
• Allow the vendor to enter and submit all information (Accord, endorsement, rider, bond, etc.,) making the process paperless.
• Allow online review, return for corrections, waivers, and approvals.
• Expiration tracking
• Intelligent Renewal Notices
• Connect to Contract Management
• Provide view only access to internal stakeholders such as Risk and Legal Departments

Join PlanetBids and Tammy Rimes, former Purchasing Agent for the City of San Diego, CA for a free webinar: What’s the Hidden Risky Part of Your Agency? To learn more about how you can manage your insurance risk. March 30, 2021 at 10am PST Register Today! April 19, 2021 at 10am PST Register Today!

PlanetBids, Inc. is an industry leader for over 20 years providing solutions to automate the COI process, contract management, and more.  Click here to schedule a free Demo to learn more.

-Ria Diaz, Manager of Client Services at PlanetBids and former Buyer and DVBE Advocate for San Jose State University