Insurance compliance management is a critical yet complex task for commercial real estate (CRE) companies. Proper handling of insurance requirements, Certificate of Insurance (COI) reviews, and tenant expectations are essential for risk mitigation and operational efficiency. However, many companies struggle with these processes, leading to avoidable mistakes that increase risk exposure and hinder smooth operations.  

This blog explores three common insurance compliance mistakes CRE companies often make and provides practical solutions to address them effectively. 

Insurance compliance mistake #1: Insufficient resources for informed decision-making 

One of the most prevalent mistakes in insurance compliance management is not having adequate resources to make informed decision-making. Insurance documentation review requires deep expertise, from understanding COIs to interpreting multiple endorsement pages. This complexity often leads to superficial reviews that miss critical details, potentially exposing the company to significant risks. 

To address this issue, companies should provide their teams with comprehensive resources, including: 

• Clear overviews of key compliance concepts 
• Detailed frameworks for reviewing COIs and endorsements 
• Specific guidelines on waivable gaps and under what circumstances 
• Easily shareable resources explaining compliance gaps for tenants and vendors 
• Regular training sessions to keep staff updated on industry standards and best practices 

By investing in these resources, CRE companies can ensure their teams are well-equipped to make informed decisions and manage compliance effectively. 

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Insurance compliance mistake #2: Lack of a clear waiver strategy 

Another common pitfall is the absence of a clear waiver strategy. Without proper guidelines, property managers may either waive insurance requirement gaps randomly or be overly strict, asking vendors for inapplicable coverage. This inconsistency can lead to increased risk exposure or unnecessary delays in operations. 

To rectify this, companies should: 

• Develop a comprehensive waiver policy based on risk assessment 
• Provide clear guidelines on what can be waived and under what circumstances 
• Implement a hierarchical approval system for waivers 
• Regularly review and update the waiver strategy based on compliance data and industry trends 

A well-defined waiver strategy ensures consistency in decision-making and helps maintain an appropriate balance between risk management and operational efficiency. 

Insurance compliance mistake #3: Setting unrealistic compliance goals 

Many CRE companies fall into the trap of setting unrealistic compliance goals, such as aiming for 100% compliance across portfolios. While ambitious targets can drive performance, unrealistic goals often lead to counterproductive outcomes. This approach may result in excessive back-and-forth communication with vendors, project delays, or overly aggressive gap waiving. 

Instead, companies should: 

• Set achievable and incremental compliance goals 
• Implement clear strategies with focused tasks 
• Regularly review and adjust goals based on performance and changing circumstances 
• Celebrate milestones and progress to maintain team motivation 
• Use data-driven insights to identify areas for improvement and prioritize efforts 

By setting realistic and strategic goals, CRE companies can drive continuous improvement in their compliance management without compromising operational efficiency or risk management. 

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Avoiding insurance compliance errors 

Effective insurance compliance management in CRE requires a strategic approach, clear guidelines, and continuous monitoring. By addressing these common mistakes and implementing solutions such as providing adequate resources, establishing clear waiver strategies, and setting realistic goals, CRE companies can significantly improve their compliance rates and overall risk management. It’s essential to treat insurance compliance as an integral part of operations, leveraging data and technology to streamline processes and maintain a proactive approach in risk mitigation. 

To learn about other common mistakes CRE properties often make with their insurance compliance, download our free infographic.