5 Insurance Compliance Strategies to Improve Construction Accounts Payable

At Jones, we collect and review COIs and endorsements for ENR 400 GCs. We asked accountants at customer GCs including Manhattan Construction, Harvey-Cleary, and Bogard Construction for strategies to reduce manual effort and expedite their insurance compliance process to improve AP. Here’s the quick rundown of what they shared with us:

Key Takeaways:

1. Use Global Insurance Requirements to issue multiple subcontractor payments with only one set of compliant subcontractor documents.
2. Centralize your insurance communications in one place to reduce the risk of communication breakdowns that can cause payment delays.
3. Improve your team’s insurance document review skills to minimize the risk of payments going out to a noncompliant sub.
4. Simplify the way you communicate gaps to subs to increase your COI collection rate by 2x.
5. Implement a dedicated insurance compliance solution to increase compliance rates by 70% and reduce COI review times by over 3x.

Read on for a deeper dive.

In this post:

• Insurance Obstacles to Improving Construction Accounts Payable
• Strategies for Simplifying and Expediting Subcontractor Insurance Compliance
• How GC Accounting Teams Improve their AP with Jones

Diagnosing Insurance Obstacles to Improving Construction Accounts Payable

The accounting teams we spoke to cited four primary insurance compliance obstacles that they experienced before bringing Jones on as a subcontractor compliance management tool: 

1. Unnecessary Volume of Documentation
2. Insurance Review Is Complicated and Unintuitive 
3. Repeated Manual Data Input Required
4. Communication Breakdowns During Document Review

Any of these sound familiar? Don’t let them get in the way of improving your construction accounts payable. We have some strategies that can help.

Strategies for Improving Construction Accounts Payable

Making a few small improvements to your subcontractor insurance compliance process can both reduce your average DPO and minimize the risk of payment going out to a noncompliant subcontractor. The accountants we spoke to shared these five best practice ideas:

• Adopt Global-Level Insurance Requirements for Trusted Subs
• Centralize Your Insurance Communications
• Upskill Your Team on Insurance Document Review
• Simplify Gap Communication to Subcontractors
• Implement a Dedicated Insurance Compliance Solution

Adopt Global-Level Insurance Requirements for Trusted Subcontractors to Improve Construction Accounts Payable

When it comes to issuing payments, using project-level requirements means your accountants have to check project by project compliance status when sending out checks. Solution? Global-level insurance requirements for trusted subcontractors. Global subs only need one compliant set of insurance documents to work on any project, using the right blanket Additional Insured endorsements to protect both your GC and various project owners. You also only have to collect subcontractor insurance documents once a year.

By implementing global-level insurance requirements for certain trusted subs, you allow your accounting team to send multiple payments at once. Plus, less identical copies of insurance documents reduces unnecessary documentation in your systems.

With Jones, collecting and managing global-level certificates is a breeze. The Global Insurance Requirements feature of the Jones Procore integration makes it simple to store global-level insurance documentation and add global subs to projects. Read more on the Global Insurance Requirements in the Jones Procore integration here.

Centralize Insurance Communications to Improve Construction Accounts Payable

Jones data shows communication breakdowns are one of the primary reasons for subcontractor payment delays. Whether it’s spam filters catching emails from different domains, difficulty looping in a broker, or just a case of overloaded inboxes, struggling to stay on the same page during the insurance component of the AP process can negatively impact relationships with subs. Strategies for centralizing communications include:

• Centralize your insurance communications in a communal inbox, insurance@*your GC’s domain*
• Have your IT department whitelist subcontractor email domains
• Ask if your broker could set up a dedicated inbox for your GC

Jones makes collaborating on insurance document review simple. All you have to do is leave notes and tag team members on subcontractor insurance records. That means looping in a broker or risk management professional for their inputs is easier than ever. With Jones, you can eliminate fumbled document handoffs and payment delays as a result of communication breakdowns.

Upskill Your Team on Insurance Document Review to Improve Construction Accounts Payable

Ensuring your accounting team is well trained to review COIs and endorsements is a crucial part of protecting your GC from insurance risk. By upskilling your accounting team with insurance courses you minimize the risk of an error in document review causing payment to go out to a noncompliant subcontractor. Looking for helpful insurance resources for your team? Get a copy of our easy-to-use COI review blueprint, or browse our comprehensive insurance guide.

Rather have the collection and review of COIs off your plate entirely? Have Jones handle it. Our team maintains a 99.6% accuracy rate in COI and endorsement review. The team is familiar with all manner of common and uncommon insurance endorsements, and is able to customize the way we review to fit the unique risk tolerance of every GC. As Sarah Michels, Office and Contract Manager at Bogard Construction told us, she’s “very confident when [she] looks and Jones says compliant, that it’s compliant with what [Bogard] needs.”

Simplified Communication of Gaps to Subcontractors

When subs are confused by gaps they’re much less likely to resubmit their insurance documents than when they’re explained clearly. Try simplifying the way you communicate gaps using bullet points and clearly writing out your required limits. You can go above and beyond with this too–Sarah from Bogard developed a guide that listed all the endorsements and equivalents Bogard accepts to be distributed to their subs, boosting their collection and compliance rates.

Jones takes the communication of gaps off the plate of accounting teams, handling all insurance related conversations with subcontractors. Our clear, easy to understand gap emails explain what insurance coverage gaps exist and how to rectify them. In addition, our detailed insurance guide is a helpful resource for subcontractors who are less familiar with the complicated world of insurance.

Implement a Dedicated Insurance Compliance Solution to Improve Construction Accounts Payable

Consider implementing an insurance compliance solution that consolidates everything to do with COIs and endorsements in one place. This can help your team issue payments faster and makes looping in risk managers or your broker far simpler than in long email threads. The solution should be capable of seamlessly syncing data between your ERP, accounting software, and construction management platform, which eliminates the need for duplicate data entry. Storing all your COIs and endorsements in a dedicated system can significantly help in case of a claim down the road.

Looking for a dedicated insurance compliance solution to help improve your construction accounts payable? Look no further than Jones.

How Accounting Teams Improve Construction Accounts Payable with Jones

With Jones, accounting teams at GCs have the tool they need to expedite and simplify the insurance component of the accounts payable process. By eliminating the need to collect and review COIs, accountants have more time to manage lien waivers, change orders, certified payroll, and more. The Jones integration seamlessly pushes data to Procore and Sage, eliminating the need for hours of manual data entry. And with Jones, getting input from risk managers and insurance brokers is faster than ever before. What does all that mean? Faster payments, minimized risk of noncompliance, and more time back to manage every other part of the AP process. Get in touch with us via the form below to learn more about how Jones can help your accounting team improve their construction accounts payable process today.