Mitigating Third-Party Risk With Compliance Analysts
Working with external vendors can carry untold benefits, but it can also expose you to additional hazards. Mitigating third-party risks requires careful review by qualified compliance analysts to identify deficiencies, exposures, and corrective actions.
Screenings in the following areas are especially critical.
While your contract may stipulate that vendors carry relevant insurance coverage, that doesn’t guarantee they will. Companies collect certificates of insurance (COI) as proof of coverage, but a thorough review is essential to ensuring policies are valid and compliant.
Unfortunately, forgeries are not uncommon. To save money, a vendor may craft a fraudulent document or inappropriately alter an otherwise legitimate COI. Experienced compliance analysts should be able to spot forgeries quickly. If you don’t have expert screening, however, trusting a fraudulent COI could spell disaster for your business. Liability claims against an uninsured or underinsured vendor could fall on your business. Even if your insurance policy covers some of the expenses, you’ll still need to pay the deductible.
Similarly, inadequate coverage can leave gaps that expose your business to unnecessary risk. Contracts often spell out coverage requirements for this reason, but even the strongest terms will not protect your business without comprehensive screening of COIs and continued COI tracking.
COIs are not the only documents that must be screened for compliance. Contracts, like tenant lease agreements, vendor service agreements, and supplier purchase orders, contain information that should be reviewed and verified by a qualified analyst. Extracting the key data and requirements and monitoring expiration dates are critical to continued compliance.
Government regulations apply to many industries, and noncompliance can lead to costly penalties. If you’re in a highly regulated industry, working with vendors who skirt regulations can put your business in a precarious position of harming your reputation and/or facing hefty fines.
Since the regulatory landscape is changing, it can be difficult for even experienced organizations to conduct the comprehensive regulatory screenings necessary to ensure compliance. However, skilled analysts can review sanctions, regulatory, and law enforcement lists along with government databases, to search compliance issues related to trade licenses, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) and Foreign Corrupt Practices Act (FCPA), adverse media, and more.
Working with vendors on stable financial footing reduces the likelihood they’ll go out of business before a project is complete. But how do you know if your potential partner is financially sound? Compliance analysts can check credit ratings, limits and risks, in addition to public records, financial records, franchise data, trade data and more, for a clearer picture of a business’s fiscal health.
Health & Safety Prequalifications
Maintaining a safe workplace is essential to both compliance and the wellbeing of your workers, so any subcontractors you use should align with your standards. Working with analysts to review EMR and OSHA data can help you reduce the likelihood of costly incidents.
If you have in-house compliance analysts, bcs’s self-service COI tracking option can enhance their efficiency by equipping them with an easy-to-use platform. If your team lacks the expertise to review documentation, our full-service COI solution can pair you with expert analysts at a fraction of the cost of hiring a new employee. Our analysts specialize in detecting and correcting deficiencies, so when you work with them, you can rest assured your business has the highest level of third-party risk mitigation.
In addition to our COI tracking solutions, bcs also provides other compliance services, including regulatory, financial, and health and safety reviews. Our analysts leverage their expertise to ensure comprehensive risk mitigation across these vectors.
Contact us to discuss how our compliance analysts can help protect your business.
Learn from the pros about risk-mitigation, document tracking, and more, with expert articles from bcs.