Certificates of Insurance Provide Protection and Proper Transfer of Risk

Through proper transfer of risk, you can avoid unnecessary lawsuits and prevent expensive claim settlements that result from a business partner’s negligence.

Proper transfer of risk works like this: A customer suffers a severe chemical burn from a store-bought product. Because there is a solid contract and certificate of insurance in place, the responsible product vendor paid the full defense costs and claim expense, not the store owner.

Conversely, improper transfer of risk looks like this: A manufacturer suffers a $60,000 fire loss caused by a vendor’s component part. Without a certificate of insurance in place with the vendor, the manufacturer incurs the full liability and expense.

Good risk management requires your business to secure certificates of insurance (certs) from all your suppliers, contractors, retailers, and vendors. Certs are evidence that your business partners are upholding their contractual obligation to purchase and maintain the insurance necessary to do business with you. Tracking these certs is an essential part of an effective risk management program. If not done properly, you could be at risk for potentially devastating losses.

If you need an accurate and effective way to procure and track certificates of insurance, give Van Wyk a call at 800-7-VANWYK. Our proprietary, customized, and cost-effective Certificate of Insurance Management Solution may be just the tool you need to protect your business against third party liability.