Third-party risk assessments evaluate factors such as vendor reputation, data security, financial standing, mission, and more to mitigate liabilities, streamline project workflow, and ultimately, influence hiring.
Certificate holders possess proof of insurance on commercial general liability policies, while additional insureds are other parties coverage has been extended to, beyond the initial policyholders.
Best practices for third-party risk management include investing in a cloud-based vendor management software, hiring the right vendors and maintaining a vendor list, streamlining document tracking, and keeping open lines of communication.
Primary and non-contributory endorsements are common insurance addendums that protect additional insureds from costly third-party liabilities and potentially, having to make contributions during claims.
COI tracking ensures vendors are insured, sets professional expectations, enables instant compliance correction, and helps businesses stay organized—all of which tremendously aid in effective third-party risk management.
Excess liability insurance provides additional limits to an underlying policy, while umbrella liability insurance expands coverage to include claims and losses outside its initial scope.
An occurrence policy offers lifetime coverage for incidents that occur during the policy period, regardless of when the claim is reported. A claims-made policy only covers incidents that occur and are reported within the policy's time frame unless a 'tail' extension is purchased.
