RISKY BUSINESS When Insurance Certification Isn’t Automated

Many a procurement professional knows how one emergency call can change their whole day!  Imagine getting a call from a city engineer about seismic activity in the area that requires a special geological expert through a sole source request. But the engineer doesn't want to complete the necessary paperwork to get a contract in place.  What should the procurement manager do?  You’ll have a chance to hear the full story at the CAPPO conference Jan. 21 to 24, 2024, in Palm Springs.

The answer to the question above is:  Suppliers who contract with government agencies are required to maintain insurance. Period.

But what if you’re the one-person procurement office for the City of La Mesa in San Diego County? Procurement negotiates and awards a contract and hands it off to a customer department which is responsible for making sure the insurance certificates are updated annually. But the contract manager has a whole other job – managing the contract! Insurance certification is just one extra “to-do” on a long list. And what if a consultant has a car accident and harms a member of the public or a contractor delivers chemicals to your plant and their poor-quality harms your agency’s equipment? A contract manager pulls out the insurance certificate and it is not up-to-date or can’t be found! The onus is on procurement … and the only way to avoid this type of situation is to automate.

One of the biggest “pinch points” for any type of agency procurement office is the insurance desk. With a myriad of requirements that vary by contract, and daily need to ensure all insurance certificates are up to date, it’s a process that can be fraught with liability issues. 

Hands down, the easiest and most stress-free way to handle the insurance desk is to automate, whether your agency is large or small.

With a 9-person procurement team, San Diego State University has a 183-page procedure manual on Insurance Requirements in Contracts. SDSU’s website outlines insurance requirements for 13 “common situations” involving activities and business ventures with contractors, subcontractors, and business activities. This includes contracts for instructors, professional services, lessees, vendors, construction, environmental contractors and/or consultants, IT, chartering of aircraft, rental of facilities, and more.

Even with a large and very organized procurement office, SDSU uses PlanetBids’ Insurance Certificate Management online module.

PlanetBids’ fully automated Insurance Certificate Management module enables risk managers, procurement, and contract administrators to automate, maintain and retrieve up-to-date relevant information regarding vendors’ or contractors’ insurance certificates. Paired with My Insurance, agencies and vendors can conduct all insurance related tasks virtually within PlanetBids’ PB System TM.

After the incident with the consultant who had a car accident, the City of La Mesa now has an automated solution that limits contract liability issues. Using the PB System TM, as new contracts are implemented and put in place, the system tracks expiration dates and serves as the organization’s insurance database.

For additional information about automated Insurance Certification, visit planetbids.com.