This article was written our valued partner VIVE, who helps Innovia Co-op members reduce the complexity and risk of vetting vendors, protect their assets under management and grow their business through industry-leading vendor compliance and management solutions.
Vendor management is a vital component of the services management companies provide their clients, and monitoring vendor compliance is a critical part of this process. However, vendor compliance rarely gets the attention it needs. Of course, you want to maintain good working relationships with the vendors that provide service to assets under your management, but more often than not, management companies rarely understand the risks they undertake each time they hire a vendor for service.
In today’s ever increasingly litigious environment, all companies must mitigate risks wherever possible. Whether it is ensuring you’re not doing business with a company on one of the government’s watch lists, hiring unlicensed or improperly insured vendors, these are risks you can’t afford and can be easily eliminated. Our research has discovered that most management companies fall short of the vendor compliance standards they have established for themselves. In general, this happens because they don’t have the staff experience to manage compliance or the systems to effectively report it to all of the user stakeholders within the company. Not employing the services of a professional vendor compliance management company puts you at a competitive disadvantage.
Skipping vendor compliance can be a costly mistake for management companies and the associations they manage. If an uninsured or under-insured vendor has an accident on property, the association will almost certainly have to file a claim on its own insurance policy, which can lead to skyrocketing insurance costs in the future, not to mention the cost of a deductible. For management companies, this could lead to the loss of a client, reputation, and potentially create a situation in which the company is sued for breach of contract.
This is why VIVE’s services are so important. We not only handle the collection of COIs and licenses for every vendor in your system, but we also have every vendor sign a Vendor Service agreement that encompasses many important items. For example, the Vendor Service agreement provides hold harmless protection that can help prevent your company or your clients from being pursued in the event that a vendor creates or incurs a liability while working on a property. The Vendor Service Agreement also binds the insurance requirements the vendor is required to hold while performing services to your managed communities. By having a Vendor Service Agreement, it allows the proper transfer of risk to the vendor from the association and management’s policy when a loss occurs.
Ready to mitigate your risk with unknown vendors?
Contact us to learn more about vendor compliance and our partnership with VIVE!
