Any individual or organization that provides goods or services to a business is considered a vendor. Whether they use one or several, all companies need vendors to conduct business. Vendor management describes the relationship between the organization and vendor.
As the role and reach of vendors expand, ongoing due diligence is vital for businesses to protect themselves. Vendor management services are a group of services designed to improve vendor performance, reduce costs and combat vendor and third-party risks. Specific benefits may include:
- Sourcing of vendors
- Negotiating a Master Agreement Contract
- Identifying ways to enhance vendor terms
- Evaluating vendor performance
- Identifying risk
As with employees, there are risks when working with third parties. Identifying the factors that contribute to a high-risk environment is crucial to managing risk effectively. Some of the most notable risks include:
- Data security
Commercial liability insurance is designed to protect businesses from liability claims. They can mitigate the risks and help you pay for expenses such as:
- Legal teams to represent your business
- Evidence costs
- Judgment or settlement amounts, if needed
These policies can help companies prepare for unforeseen future events related to vendor management services such as bodily injuries or property damage. Talking with an insurance professional can help you select a policy and customize it to meet your needs.