Are your COIs up to date? Or, has it been a while since you’ve checked your certificates?
As a snapshot in time, COIs only guarantee that your tenants or vendors were covered on the day the certificate was printed. While many COIs state that you’ll be notified if the insurance coverage changes any, you won’t always be informed when this happens.
So, your certificates could indicate a different level of coverage than they actually have. Your tenants or vendors could be underinsured – leaving you to foot the bill if anything happens. If you don’t keep your COIs updated, your building is at risk of costly claims – with the potential to cost you millions.
Along with reducing the risk of expensive claims, keeping up to date with your COIs has many other benefits for your properties and team. Wondering what they are? Here are the top 5 benefits of keeping up to date with COIs.
1. Protection from Claims
One of the primary benefits of keeping up with your COIs is that it protects you and your property from costly claims.
When tenants and vendors perform work on your property, you become liable for any damage or injury they cause. This could be a tenant having unsafe working conditions that result in serious injury to an employee in your building. Or, it could be that a cleaning vendor uses the wrong mix of cleaning chemicals and damages a part of your building.
Whatever it is, you and your property are liable for compensation for injury or fixing any damages to your building. This has the potential to cost you millions in a lawsuit or repairs if your tenants or vendors don’t have adequate coverage.
The best way to ensure your tenants and vendors have enough coverage to protect you from claims is by keeping updated COIs with building operations software. With regularly updated COIs, you’ll know exactly what coverage your tenants and vendors have – and whether it’s enough.
When you check COIs regularly, you can require tenants or vendors to get more coverage – or stop working on your property. That way, you’re protected if things go wrong – instead of being on the hook for millions because you didn’t know vendors or tenants were underinsured.
2. Minimize Losses
Along with protecting you from claims, updated COIs can minimize any losses you incur if anything happens.
If a vendor or tenant damages your building, you could be stuck paying for it. For example, if a tenant installed improper wiring that started a fire and destroyed part of your building, you would have to pay for repairs if your tenant’s insurance coverage wasn’t enough.
This could amount to hundreds of thousands – or even millions – in losses for your property. Depending on the damage and your insurance coverage, you might not be able to repair your property – losing a huge amount of revenue.
However, if you keep up with COIs, you can avoid this. By regularly updating your COIs, you can check how much coverage tenants or vendors have – and whether it’s enough. If any tenants or vendors don’t have enough coverage, you can make sure they increase their coverage, before anything happens.
That way, you can be protected from potential losses – maximizing the revenue you earn from your property.
3. Be Prepared for Audits
Another reason to keep up with COIs is so you have the necessary coverage when you’re audited.
Periodically, your insurance provider will want to check how risky it is to insure you. They’ll check things like your records, incidents, and whether your vendors and tenants are adequately insured. If your tenants or vendors are underinsured, your insurance rates could go up – costing your building and decreasing your NOI.
If you keep updated COIs, then you’ll be able to avoid any increases in the cost of insurance. You’ll always know how insured your tenants and vendors are. And, you can fix any tenant or vendor insurance problems before an audit.
That way, you can reduce the risk you pose to your insurance – keeping your costs down and increasing the profitability of your building.
4. Reduce Your Team’s Workload
Keeping up to date with your COIs can also reduce the workload of your team, making them more efficient and decreasing costs.
If your COIs aren’t up to date, you risk costly claims and legal battles. Dealing with lengthy legal problems requires your team to be on the phone, sending emails, running to the courthouse, and more until the issue is resolved. So, much of your team is preoccupied with the legal problem – instead of running your property.
While focusing on resolving the legal issue, your team doesn’t have time to focus on tenants or building maintenance. This means tenants aren’t receiving the attention they need – leading to lower tenant satisfaction. And, your building isn’t being as rigorously maintained – so equipment fails and costs your building more.
Keeping up to date with COIs means your building won’t face legal battles that consume the attention of your staff. You’ll always know whether your tenants and vendors have the right coverage – or be able to fix it if they don’t.
And, your staff is free to focus on improving the tenant experience and creating a preventative maintenance plan the prolongs the life of equipment – reducing your costs and increasing your revenue.
5. Cut Costs
Along with the other benefits, cutting costs is another important benefit to keeping up with your COIs.
Having out of date COIs means your tenants or vendors could be underinsured or lacking coverage altogether. And, you wouldn’t know about it until a problem happens. Fire damage, injured workers, or any other issue would end up costing your building. Between legal fees, repairs, and compensation, you could be looking at millions in costs.
Making sure your COIs are up to date can help you avoid these costs. You can ensure your tenants and vendors have enough insurance coverage to pay for any issues they cause. That way, you’ll have few (if any costs) if tenants of vendors cause damages or injury.
Wrapping It Up
Keeping up with COIs can help you avoid costly claims and be protected from losses when problems happen. And, always having updated COIs can help you avoid any increased insurance costs if you’re audited. Plus, updated COIs can reduce your team’s work (and allow them to focus on tenants and your building) and building costs.
However, keeping up with COIs is complicated and time-consuming. Always having updated COIs means you have to track down every vendor and tenant to get COIs. Plus, you have to know when COIs expire, so you can get new ones from tenants and vendors. And, just having COIs doesn’t ensure you’re protected from costly claims.
Rather than manually tracking certificates and ensuring compliance, you could use property management insurance software. With automated certificate tracking, compliance profiles, a dashboard overview, help from insurance experts, and more, insurance software can make compliance a breeze. So, you’re protected from costly claims – without increasing your costs.
Looking for insurance software that can help you keep up with COIs and other compliance requirements? Consider using Prism. With Prism’s insurance module, you can easily get updated COIs and always remain compliant – so you can reduce costs and risk while increasing revenue.
Get started with your free Prism insurance demo today.