The State of Third-Party Insurance Verification – Research Report
June 10, 2021
Companies that deliver a Certificate of Insurance (COI) request to their franchisees or third-party partners are faced with a number of subsequent challenges, first of which is communicating the intentions and steps necessary to complete the verification process. If this isn’t done properly, it can be a key point of failure when attempting to verify insurance to reduce risk.
Insurance requirements often ask for proof of obsolete provisions or coverages that aren’t available anymore or have been incorporated into standard coverages. These provisions and coverages are not readily conveyed on standard COIs, and the terms used in these agreements don’t always easily map to standard COIs (e.g. There may be differences in how coverage types or limits are named).
The reason why insurance verification tends to halt at this point in the process is because indemnity agreements are written in complex legalese and insurance jargon that are simply too ambiguous for a layman to comprehend, which means the Insured is frequently forced to rely on their broker(s) to interpret and execute on the company’s coverage requirements.
The best way to remediate this is to over simplify communications to the Insured, and explain where their coverage falls short in ways they can understand. Here are our recommendations to provide better communication when the Insured is non-compliant with coverage requirements.
Evident’s insurance verification solution automates all of the above recommendations, making it very easy for Insureds to demonstrate compliance with corporate insurance requirements.
Our solution prominently links to and shares business’ insurance requirements and sample certificates in the form of a microsite or a document, and creates a detailed checklist that itemizes gaps in each coverage type and includes details on how to close them. We make it our business to equip the Insured with necessary information to work with their broker effectively.
Evident sources coverage information directly from brokers, agents, and carriers directly if the requirements call for non-standard COIs, and we partner with insurance brokers who offer compliant insurance.
Below is a sample email that our customers’ Insureds might receive in the event that they are non-compliant with their corporate standards.