illumend Founder and CEO Kristen Nunery Challenges How Businesses Think About AI’s Role in Third-Party Insurance Compliance

As subcontractor ecosystems expand, Nunery argues that treating AI as day-one operational
infrastructure is critical to keeping work moving, preventing delays, and accelerating trust
between partners

Key Takeaways

According to illumend Founder and CEO Kristen Nunery, AI reshapes third-party insurance compliance in the following ways:

• AI improves third-party insurance compliance by creating shared clarity for owners, operators, and partners—not simply by increasing speed or automating paperwork.
• Third-party insurance compliance is often the first operational signal of whether a project, deal, or engagement will actually move forward on time.
• Legacy third-party insurance compliance systems hinder partnerships by introducing ambiguity that leads to resubmissions, delayed starts, and last-minute surprises once work is scheduled to begin.
• AI accelerates partnerships by standardizing how insurance requirements are interpreted and by making compliance outcomes clear and visible to everyone involved, before crews, vendors, or service providers are waiting.
• Businesses that treat third-party insurance compliance as relationship infrastructure reduce friction early, avoid stalled onboarding, and scale partnerships without disrupting timelines or margins.

INDIANAPOLIS, Feb. 23, 2026 /PRNewswire/ — illumend, the next-generation AI platform redefining how companies manage third-party risk and insurance compliance, today announced the publication of a new article by its founder and CEO, Kristen Nunery, that challenges the dominant view of AI as primarily an efficiency tool in third-party insurance compliance. Nunery argues that AI plays a far more consequential role for businesses in construction, real estate, manufacturing, and other industries that depend on contractors, vendors, and service partners to keep projects moving forward, especially at the very start of a working relationship.

As subcontractor lists grow, projects accelerate, and onboarding timelines shrink, businesses today have far less tolerance for delays or ambiguity in third-party insurance compliance. In her article, Nunery reframes AI’s role for owners, operators, and managers responsible for getting work started, arguing that the earliest signals of partnership success or failure emerge inside compliance workflows, often before a job site opens or a contract generates revenue.

When AI is treated merely as a tool to process certificates faster, Nunery contends, businesses miss its strategic role as operational infrastructure that creates shared clarity, consistent interpretation, and alignment at the outset of third-party relationships. Without that foundation, she asserts, trust erodes before work begins, partnerships slow, and costly delays or stop-and-go onboarding issues accumulate long before anyone labels them a risk problem.

“AI is usually talked about as a way to speed up compliance because the work has always been about paperwork,” said Nunery. “But the real risk businesses face today is jobs that can’t start and vendors who don’t know what’s missing until it’s too late. When requirements are applied consistently and explained clearly, partners know exactly where they stand from day one. That certainty keeps onboarding moving, prevents costly delays, and allows partnerships to scale without disrupting timelines or margins.”

Below is the full article by Kristen Nunery, which outlines why third-party insurance compliance has become one of the most overlooked sources of partnership friction for growing businesses, and how AI is quietly turning it into a strategic advantage.

Rethinking AI’s Role in Third-Party Insurance Compliance as Partnership Acceleration

By Kristen Nunery, Founder and CEO, illumend

Most business leaders talk about AI in third-party insurance compliance the same way they talk about any new technology: speed, efficiency, cost savings.

That lens misses what’s actually at stake.

The real impact of AI in third-party insurance compliance has nothing to do with how fast documents move through a system. It has everything to do with whether partnerships ever get off the ground, and whether they survive once they do. When compliance delays a project start or holds up a vendor, the cost is immediate and tangible.

In industries like construction, real estate, manufacturing, and other sectors that depend on complex networks of contractors, vendors, and service partners, those delays translate directly into idle crews, missed timelines, and strained relationships.

Third-party insurance compliance is no longer a back-office function. It is the first operational test of trust between businesses.

Compliance Has Always Been a Relationship Problem. We Just Treated It Like Paperwork.

For decades, third-party insurance compliance was designed as a control mechanism. Collect the certificate. Check the box. Flag the exception. Move on.

These systems assumed friction was normal. Delays were acceptable. Ambiguity was unavoidable.

Requirements were captured, but not interpreted consistently. Decisions were issued, but rarely explained. Third parties were told what was wrong without understanding why. Owners and project teams were left answering questions they didn’t create, while schedules quietly slipped. Internally, teams spent more time clarifying outcomes than managing risk.

At scale, this wasn’t just inefficient. It quietly damaged trust before partnerships ever began. That damage represents a form of hidden business risk that doesn’t show up as a compliance failure, but as delayed starts, idle crews, strained vendor relationships, or projects that stall after contracts are signed.

Because compliance isn’t neutral. It sends a signal.

It tells vendors and partners whether expectations are clear or arbitrary. Whether decisions are principled or subjective. Whether problems will be surfaced early or discovered after a project is already supposed to be underway.

Long before performance is measured, compliance reveals how a relationship will actually function.

Why Legacy Compliance Systems Break Partnerships at Scale

Most compliance failures aren’t caused by bad actors or missing coverage. They’re caused by systems that rely on human interpretation to do work that demands consistency.

Legacy platforms digitize documents but leave judgment fragmented. One reviewer approves what another rejects. One exception escalates; another disappears. Outcomes arrive through emails and ticket queues instead of a shared system of record. This fragmentation does more than create friction. It conceals risk. Leaders see compliance achieved, while teams absorb the cost of rework, delay, and escalating exceptions that surface only when a project or service engagement is ready to begin.

A common scenario plays out: a partner clears onboarding, work begins, and only then does a coverage gap or exclusion surface. This can force a stop, a scramble to fix insurance, or a renegotiation under pressure. At that point, compliance looks like the problem, even though the real failure was misalignment at the start.

As partner ecosystems grow, this inconsistency compounds. Onboarding slows. Trust erodes. Friction becomes normalized.

Not because risk increased but because alignment disappeared.

When partners don’t share the same understanding of requirements, compliance stops protecting relationships and starts undermining them.

What Actually Makes AI a Partnership Accelerator

AI becomes transformational in third-party insurance compliance only when it replaces interpretation with alignment.

Unlike legacy systems, AI doesn’t just store requirements; it understands them. It consistently evaluates coverage against defined standards. It surfaces gaps early, explains outcomes clearly, and creates shared visibility across all stakeholders, before work is delayed or schedules are disrupted.

The difference is structural:

• The same requirement is applied the same way every time
• Issues are identified before work stalls
• Both sides see the same compliance reality simultaneously

Compliance stops being a subjective judgment call and becomes a shared source of truth. Hidden risk becomes visible risk—early enough to act on, explain, and resolve while changes are still manageable and costs are still contained.

That’s when trust accelerates.

Not because standards are lowered but because expectations are finally clear.

Before AI, Compliance Felt Arbitrary. After AI, It Feels Designed.

Before AI, onboarding was a guessing game. Third parties submitted documents without knowing whether they were sufficient. Internal teams reinterpreted requirements. Exceptions bounced between inboxes. Delays accumulated without explanation.

After AI, the experience changes entirely.

Requirements are explicit. Decisions are explainable. Guidance replaces back-and-forth. Issues surface early, while they’re still easy to resolve.

The result isn’t just faster onboarding. It’s fewer strained relationships, fewer emergency fixes, and fewer partnerships that stall before real work begins.

The Shift Most Leaders Are Missing

The most forward-looking businesses no longer treat third-party insurance compliance as a gatekeeping process after contracts are signed. They are treating it as infrastructure—a system that determines whether partnerships scale smoothly or fracture under pressure.

When vendors, contractors, and service providers are extensions of a lean team, delays and ambiguity hit harder and cost more.

AI enables that shift not by automating paperwork, but by removing ambiguity.

Risk stops being something you react to after a problem emerges. It becomes something you anticipate and manage earlier, while trust is still being formed and timelines are still intact.

The Quiet Advantage of Getting This Right

The next decade will belong to companies that can scale partnerships without eroding trust. That doesn’t happen through policy documents or vendor handbooks. It happens through systems that create shared understanding from the very first interaction.

Third-party insurance compliance has long been one of the most overlooked sources of friction in modern business. It has also been one of the most overlooked sources of hidden business risk, until AI made that risk visible early enough to prevent delays, disruption, and rework.

When trust is built at the start, partnerships don’t just move faster. They last.

Frequently Asked Questions

What does AI change about third-party insurance compliance?
AI changes third-party insurance compliance by shifting it from a reactive checkpoint to proactive relationship infrastructure. According to Kristen Nunery, Founder and CEO of illumend, the primary impact is alignment created through consistent interpretation of requirements, explainable outcomes, and shared visibility before work begins or onboarding stalls.

How does AI-driven third-party insurance compliance accelerate partnerships instead of just speeding up paperwork?
AI-driven third-party insurance compliance accelerates partnerships by standardizing how insurance requirements are evaluated and explained across businesses. From Nunery’s perspective, this prevents repeated clarification, resubmissions, and last-minute fixes, allowing projects and partnerships to move forward without unnecessary delays.

Why do legacy COI systems create friction between businesses? 
Legacy COI systems create friction because they rely on manual review, subjective interpretation, and disconnected workflows. Nunery explains that while these systems store documents, they cannot consistently interpret requirements or explain decisions, causing issues to surface only after work is expected to begin.

Can AI-driven third-party insurance compliance improve trust without lowering standards?
AI-driven third-party insurance compliance can improve trust without lowering standards by applying requirements consistently and making outcomes explainable. According to Nunery, predictable and repeatable evaluation removes guesswork while preserving oversight so both sides know exactly where they stand, early.

About illumend
Founded in 2025, illumend is the most complete AI-powered platform transforming how businesses manage third-party insurance compliance and risk. Backed by myCOI, the leader in third-party insurance compliance management with more than 15 years of expertise, illumend reimagines compliance by guiding every step of the process—from document review and expiration tracking to risk flagging, communication and resolution—within one intuitive system. At its core is Lumie, illumend’s conversational AI guide that reads complex insurance documents, flags issues in real time and explains them in plain language, empowering anyone to take confident, informed action. To learn more, visit https://www.illumend.ai/.

Media contact:
Michael Tebo
Gabriel Marketing Group (for illumend)
Phone: 571-835-8775
Email: [email protected]

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SOURCE illumend