Certificate of Liabilty Insurance Request Letters and Cert Tracking
Are you sending out letter after letter requesting insurance certificates, re-requesting certificates and re-re-requesting insurance certificates? Are you frustrated with your results? If you are serious about insurance certificate tracking and insurance certificate management, certificate of liability insurance request letters are essential. Any casual review of the web will surface any number of sample letters from well intentioned businesses addressing their specific industry, business style and goals. Most are well intentioned letters politely requesting an insurance certificate and include a highlight of one or more essential provisions. These are a recipe for disaster. You will continue sending out letter after letter like blasts from a hose. Some will hit their mark. Most will not.
Insurance certificate tracking success necessitates a moment of reflection and a well thought out strategy when it comes to effective certificate of liability insurance request letters.
Insurance Requirements – Risk Profiles
You must consider first what your insurance requirements will be. Will you need different insurance requirements for different purposes? Your requirements for a small concrete cutting contractor may be entirely different from your requirements for a larger curtain wall subcontractor. Likewise, you will have different insurance requirements for architects, engineers and other project professionals than you would for a subcontractor on site. You should consider different risk profiles by type of vendor, size of vendor, and project duration/complexity as appropriate. What are the essential requirements you must have for each risk category? What are desirable, but less essential requirements that you do not intend to follow up on? These are essential questions to help you coordinate your insurance certificate management software whether you use a online insurance certificate tracking software solution or an enterprise solution. Your tracking software results must be contemplated in advance. Likewise, it would be best if your insurance certificate tracking software and your contract management software or other risk management software could be coordinated up front to minimize potential conflicts.
Insurance Requirements – Communication/Preparation
Insurance compliance should not be a mystery. Your certificate of liability insurance request letter should not be the first time someone is made aware of your insurance requirements. To ensure the best results, it is essential that all parties be familiar with your insurance expectations before finalizing a contract. Your requirements must be clear, reasonable, verifiable and enforceable. You may want to consider insurance requirement compromises in advance to help smooth your contract negotiations, to reduce conflict, maximize consideration instead of capitulation, and ensure compliance in the future. Too often lenders share only their boilerplate insurance requirements in advance of loan considerations only to change their requirements later. Such poor preparation and communication leads to inordinate stress on all parties and often avoidable additional expense. If possible, you should communicate exactly what is required for insurance compliance. Your requirements should also be carefully reviewed by a qualified attorney and one or more insurance professional to be sure that your requirements are not in conflict with insurance law or the market.
Insurance Requirements – Timing
You also must consider when you need the insurance certificate. If your insurance requirements are well thought out and known before bidding, it may be best to require a satisfactory insurance certificate to accompany qualified bids. Bids without a satisfactory insurance certificate should be considered suspect and likely to be a concern in the future. Conversely, requiring an insurance certificate before work starts or before payment to your vendor is an invitation for delay, stress and may put your work in jeopardy.
Insurance Requirments – Tracking
Whether you are using sophisticated insurance certificate tracking software, contract management software or other risk management software, it is essential that you are prepared for the number of articles you will need including but not necessarily limited to insurance certificates, additional insured endorsements, waivers of subrogation, and notices of cancellation or other amendments. Since the change of the Acord 25 form last year, the number of forms you may need could be more than 10. You will need to have a place for each and a process to review/approve each.
Certificate of Liability Insurance Request Letters
Your certificate of liability insurance request letters should be thought of as a series of letters together. The series should include your first letter, your follow up letter(s), and compliance letter(s). They should be consistent in style and tone. If you are using insurance certificate tracking software, contract management software or other risk management software, it is best to mention this in your correspondence to reinforce that your requirements are uniform and objective and that you have a process to evaluate what you receive. Every letter you send out should include a complete copy of your insurance requirements, when you want the insurance certificate and highlight the consequences if you do not receive what you need when you need it.