Vendor risk management has risen to prominence in recent years as more organizations recognize the challenge of maintaining vendor compliance. As with any enterprise, however, there are service providers that promise much, and deliver little. You can play an active role in saving your organization from such providers.
Many organizations assume their vendor insurance certificate monitoring program delivers value in the form of protection, when in fact it does not. This is because vendor compliance monitoring is a multi-step process, and many products and services only deal with surface level issues. This oversimplification not only fails to increase vendor compliance - leaving you exposed to loss, but can also aggravate vendors and their insurance agents.
Below are three key services that a vendor risk management tracking company must provide in order to deliver value and protection to their clients.
DIRECT INTERACTION WITH VENDORS
It is not enough to simply send automated letters to vendors and tenants, and instruct them to submit updated compliance paperwork. Letters are lost, coverage requirements are not carefully read, and vendors and agents typically only respond to those who personally follow up with them regarding coverage issues. Unless your vendor insurance tracking firm has a trained staff, dedicated to personal follow-up with vendors and their insurance agents, the rate of vendor compliance with your terms and conditions will not increase. Even worse, over time, you may receive fewer and fewer updated certificates.
REGULAR REPORTING AND STATISTICS
A competent certificate tracking firm should be able to send you a detailed report with little notice, showing exact compliance statistics for your vendors or tenants. Do you know what percentage of your vendors have expired workers’ comp policies? Do you know if your overall vendor insurance compliance percentage is higher or lower today than it was three months ago? If your certificate tracking firm cannot provide you with these and other metrics on short notice, you should question the level of work they are performing on your account and the value of their service.
DEDICATED ACCOUNT MANAGER
Do you have a dedicated account manager you can call at any moment and speak to about your vendors? If you called and asked, would they know who your key vendors are? Could they summarize all communications between their auditors and your vendors? Could they tell you what steps they have taken to bring your vendors into compliance? If not, you are not receiving the value and protection you need from your insurance certificate tracking firm. A dedicated account manager should be available to speak with you at all times. This person should be knowledgeable about your company’s specific insurance rules, vendor relationships, and what actions are currently being taken to bring your vendors into compliance. BCS is successful at driving vendor compliance for our clients because of interaction.
Interaction with our Clients, their vendors, and/or their agents, is ultimately how we correct deficiencies. It is this collaborative, hands-on effort which drives compliance. Put yourself in the shoes of your vendor or their insurance agent. Would you more likely respond to an automated letter requesting a new certificate to be mailed after an increase in policy limits; or a friendly, personalized phone call from a trained auditor, who can not only explain exactly whatneeds to be updated, but also follow-up with you until the certificate of insurance is updated, sent, and reviewed?
Hold harmless language (a/k/a indemnity language) is found in most contracts and agreements, with the purpose of transferring the obligations of one party to another to defend and make whole the other party for legal liability, typically related to the services, work or nature of the contract.