Observations on the Certificate of Insurance verification process

Frequently, staff who review insurance documents do not have the level of insurance skill required to adequately interpret the meaning and content of these documents.

As long as a certificate of currency or certificate of insurance describes the policy as 'Liability' and it seems to be current, we can guarantee that in many organisations it will be ticked off as complying. For example there are many recorded instances where liability insurance certificates have been accepted despite significant deficiencies such as :

• liability policies described as Excess liability but no details provided for the primary cover
• deductible levels not shown
• insurers not authorised to do business in Australia
• Underwriting agencies nominated and the Insurer not named.
• insurers having an unsatisfactory financial security rating
• policies not protecting the parties nominated in the contract.
• the Insured's business (as described in the policy) not wide enough to cover the work being carried out.

In those cases, the certificate may be worthless and may lead to the unintended assumption of liability that can occur when doing business with uninsured or inadequately insured business partners. In a recent poll of people handling insurance documents:

• 35% said they did not follow up on policies which expired during the contract
• 85% did not check the claims paying rating of the contractors' insurer (the other 15% probably misread the question!)
• 55% agreed they had inadequate systems for managing certificates of insurance
• 74% felt that people checking insurance documentation had inadequate insurance experience
• 90% felt they would either use or consider outsourcing the job if this was available
• Respondents indicated that between 40 and 100% of their contractors' insurance documentation was fully compliant.

Protectus provides consistent and thorough pursuit, validation and tracking of certificates of insurance on behalf of their clients. This process minimises the unintended assumption of liability that can occur when doing business with uninsured or underinsured business partners. Protectus uses sophisticated, custom-built software to provide services efficiently. Additionally, through this website clients can securely view certificate images and data as well as adding and updating data. The combination of service and technology gives Protectus clients the best of both worlds - relief from certificate tracking administration with instant secure access to important business data from any business location.

Click here to read about our Certificate Tracking Process