Hire At Your Own Risk: Why You Need a Vendor Credentialing Program
These days, with attorneys begging people to sue from commercials and billboards, it’s shocking there are still PMCs with no comprehensive system for screening the service providers they hire to come on to their properties.
Most will eventually pay a high price in one form or another. Their insurer might be forced to pay a huge settlement to a roofer lacking worker’s comp who slips on a loose roof tile and falls to the ground. Or perhaps to the resident the roofer falls on! Then there are the occasions where a service provider has insurance, but it doesn’t apply to the sort of work they’re doing – and they cause a disaster their policy doesn’t cover.
Even if the PMC has great coverage for these types of vendor-related liabilities (and many don’t), you can bet the deductible payment will sting and rates will go up. And of course, there’s your reputation to think about.
But even beyond these risks, there’s this: do you really want people on your properties who might be underinsured, uncertified, have criminal backgrounds, or are in collections or on a government watch list? You screen your renters carefully. Shouldn’t you know even more about your service providers?
According to industry reports, more than 45% of them have experienced a lapse in general liability coverage in the past two years; 31% have had a lapse in auto liability coverage in the past two years; and 11% have relevant derogatory information in their file.
The problem with DIY vendor credentialing
It’s just plain hard to keep up with the necessary details about every service provider your properties hire. That’s why those who try to do it themselves are usually overwhelmed, and far less than thorough. What PMC has people sitting around with idle time to needle vendors for insurance, financial and other information, organize it, and take action when, for example, someone’s insurance lapses (as it does for nearly half over a period of two years)?
Qualifying vendors is also expensive: according to industry estimates, the average cost to screen just one vendor is $300, and it takes ongoing effort to ensure credentials stay up-to-date. Vendor credentialing turns out to be one of those areas it makes a whole lot of sense to outsource. Particularly when it’s free to you.
Outsource the whole mess – for FREE
It sounds too good to be true, but it’s not: you can completely outsource the job of keeping up with service providers, and not pay a penny for it. For example, RealPage’s Vendor Credentialing Service charges a very modest $100 fee to each service provider who seeks work from you. In return, they’re informed of exactly what you require in terms of verification, all their screening details are collected and tracked over time, and they’re certified and added to your network of approved vendors, ready to accept jobs.
But the biggest benefit, of course, is to the PMC. You’re not only relieved of a huge hassle; you also have a team watching your back that specializes in collecting and updating credential information.
RealPage vendor compliance management software verifies all of the following, and keeps up with any changes:
1. Background screening
- Verification of corporate status, insurance coverage and business licensing; identification of bankruptcies, liens, collections and judgments
- National Criminal & Sex Offender background check including verifications for principals and vendor employees who work with your staff and on your properties
- Government Watch List search to ensure compliance with federal laws tied to the 2001 Patriot Act, the Money Laundering Act and Executive Order 13224. Database searches include OFAC database, Money Laundering database, Terrorist Watch List and FBI Most Wanted database
2. Management of liability insurance certificates
All necessary services associated with tracking insurance and renewal certificates, and securely maintaining them online for 24/7 retrieval.
3. Management of W9 documents
Documents on each vendor are stored and can be retrieved instantly for review.
With this solution in place, you can view an online profile to easily and quickly learn the truth about a vendor’s capabilities, their insurance coverage, financial health and reputation. It’s particularly helpful at audit time.
As your vendors receive their credentials, they’re joining a network of pre-approved service providers that makes it simple for your people to hire the vendors they need worry-free. It’s good for you and good for the vendors.
A vendor credentialing program is one of those “what have you got to lose?” propositions. Learn more about leveraging a multifamily vendor management compliance system.