Majority of third-party vendors aren’t meeting insurance obligations

Mandating third-party partners have coverage is one of the ways organizations can manage commercial risks. (Credit: VectorMine/Shutterstock.com)

Just a quarter of third-party vendors are fulfilling insurance requirements of the companies they contract with, according to Evident ID, Inc., which noted enterprises could have significant unmitigated risks as a result.

Mandating third-party partners have coverage is one of the ways organizations can manage commercial risks. Evident gives the following scenario in its report: “A convenience store franchisor was forced to pay financial damages due to one of their franchisees having an accident in their store because the store carried insufficient insurance, even though said franchisee is contractually obligated to have an active insurance policy with a specific minimum level of coverage.”