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Your clients are calling me. I too, work for an insurance broker.  If you’re reading this you might also.  Recently, a new strategy has emerged for retaining business that seems to work well for the broker, but irks the buyer.  That strategy is locking out every available market five or six months prior to renewal.  Sure, this strategy works well for the people on the selling side to prevent competition from quoting an account, but how is it going to work out for you in 2011?  In the last 3 weeks, I’ve met with several of “your” clients to discuss their construction insurance and risk management programs.  If the meeting went well, we would discuss marketing the account when their renewal got closer.  However, several of these accounts had already been heavily marketed (6-7 markets by the incumbent broker) many months prior to said renewal.  Not sure if the brokers and agents responsible for this extremely are aware that this tactic does not sit well with their clients.  Just yesterday, I got a phone call from a prospect that I haven’t spoken with in over a year and he offered me every market except the incumbent.  Because these types of calls don’t happen very often, I inquired why he wanted to go this route, and he responded very matter of factly that “he is sick of his agent blocking every market so far in advance that no one else has an opportunity to improve his insurance situation”.  At this point, I could have been greedy and asked for every market we represent, but didn’t.  Being a specialty contractor, there are only so many markets that understand and offer a product for the type of work his company performs.  I have a feeling that a lot of agents send in half assed submissions to every carrier just so they can make their client feel that they went above and beyond, when in reality half of the carriers they supposedly sent submissions to flat out denied it just because of the type of work the insured does.  But that isn’t the message portrayed by the agent at proposal time.  They will try to spin their marketing efforts into a story about how much work went into marketing the account solely based on how many carriers they approached.  This approach works right now because contractors have too much to deal with just bidding work that they don’t have time to send rescinding BORs to carriers.

Here’s how we(my brokerage) differ.  We don’t market every account we have to every carrier we represent every year.  Instead, we spend our time making our clients safer and more profitable.  Instead of leaving the fate of our client’s insurance pricing in the hands of our carriers, we work PROACTIVELY to prevent and minimize claims and market the accounts strategically to carriers that have experience with and have designed special programs for contractors that address the risks specific to their industry or trade.  Two reasons why we do this:

1. If the underwriter is experienced in construction, he or she can price the account more accurately, preventing large price swings year to year.

2. If an underwriter sees the same account every year and never has a realistic chance of winning the business, they become less and less interested in spending time reviewing the account(assuming they don’t flat out deny quoting it because of all their time the agent has wasted in the past)

If you’re an agent using the market saturation technique, it has probably worked for a few years now and will work for most of your fall and winter renewals.  However, I’m not calling your clients begging to quote.  YOUR clients are calling me because they don’t like how you’re handling the marketing of their account.

If you want to learn more about our strategies for making contractors more profitable, check out our website at Construction Risk Advisors.com

A few months ago, before the iPad came out, I wrote a post about some potential applications that contractors could use it for.  It wasn’t a very strong post, but after actually handling one, it would be way too distracting for anyone to use at a jobsite, office, or anywhere else where productivity is needed.  I initially suggested we get the sales team at my company them to do our presentations with instead of using laptops, but realistically, if someone ( a prospective client) had never handled or used one, it would be very hard to pay any attention to a powerpoint when instead you would be playing with an iPad.  Down the line when people are much more accustomed to fancy, touchscreen technology, it might be a useful sales tool or a way to expedite some processes on construction job sites, but for now, in my humble opinion, it is a distraction.  Anyways…

I was just reading an article in Constructech Magazine about smartphone technology for contractors.  Nothing groundbreaking.  But good to see a few app developers working on an underutilized section of the marketplace.  However, not extremely excited about a magazine article that focuses on the ‘ruler’ app for smartphones.  It was featured in the initial TV ad for the iPhone almost 4 years ago, and in using it at home to hang pictures, isn’t all that impressive.  Basically, if I paid you to build a building for me, I’d hope you would use more advanced tools.  As smartphones and their applications become more advanced, I don’t doubt there will be an upswing in construction technology, but not holding my breath at the moment.  Sorry to be critical, if I could think of a better app idea for contractors, I’d be doing that instead of blogging/whining.

To sympathize with the app developers, I wouldn’t want to be blamed for phones or iPads that get broken because of jobsite use, or for being a distraction that leads to a drop in quality or productivity on a construction site.  Fingers crossed that a laser level enabled iPhone is available on verizon soon.

I don’t think ‘contractor risk profile’ is a term you will find in wikipedia or the dictionary, but it’s a concept that can have a large effect on an Insurance Company Underwriter when he or she takes a look at your account and starts to determine your pricing.  A glaring example of a bad risk profile is this headline:  COMPANY IN BRIDGE COLLAPSE PREVIOUSLY CITED BY OSHA

Earlier today, a Connecticut contractor was doing demolition work on a bridge, when it partially collapsed.  There was only one serious injury, but the repercussions will be grave. Obviously, at this point it is too early to point fingers at who is responsible for the collapse(unknown who the contractor was who built the bridge in 1949, and who did a major renovation on it in the 1980′s).  It could be the contractor who was working on it today, or a 25 year old completed ops claim.  However, since the bridge hadn’t collapsed prior to the recent demolition, it was be surmised that Brunalli will be found responsible for this.  Frankly, I wouldn’t want to google my company’s name and have the first page filled with my history of OSHA fines and collapses that severely injured my employees.  The contractor on this job doesn’t have a website, so they have no online presence or information in which they can offset their shaky track record on safety.  Unfortunately for them, when an insurance underwriter is doing their initial research on your account, the internet and your website are some of their first stops.  Do what you can to be known and respected as a safe construction company.  And not just paying lip service to it, but actually having the safety record and low experience MOD to prove it.

It is too early to say that this disaster today could have been prevented, but given what happened last time OSHA visited one of their job sites, it can be said that this company is not known for safety.

List of OSHA fines from 2009:

The U.S. Occupational Safety and Health Administration cited Brunalli for safety issues involving the rebuilding of a bridge over the Housatonic River in Falls Village. OSHA said the company failed to protect workers against falls, drowning and other hazards at the Route 7 job site.

The December 2008 OSHA inspection –which led to the fine — found employees exposed to falls of up to 43 feet while working without fall protection on unprotected or inadequately guarded sections of the bridge and using an access ladder of inadequate height.

Workers also were exposed to drowning hazards due to the lack of life jackets, ring buoys and a lifesaving skiff which are required to be used and readily available on site when employees work over water.

In the Falls Village project, OSHA issued Brunalli Construction three willful citations, with $147,000 in proposed fines, for the fall, drowning and ladder hazards and 10 serious citations, with $33,950 in proposed fines, for additional fall-related hazards, puncture and laceration hazards from a damaged cable guardrail system, no hard hats for employees exposed to overhead hazards, amputation and laceration hazards from unguarded grinders, and no trained emergency responders on site.

OSHA defines a willful violation as one committed with plain indifference to or intentional disregard for employee safety and health. OSHA issues serious citations when death or serious physical harm is likely to result from hazards about which the employer knew or should have known.

Does your construction company need a risk profile improvement?  Contact the crew at Construction Risk Advisors for the type of risk management advice that the safest contractors in Connecticut have been using for years.

We know you were able to find time during your weekend to pass a weakly accepted health care bill, and that you didn’t spend very much time regulating oil rigs in the Gulf of Mexico, but we were all kind of hoping that you could find some time in your busy schedules to not let the NFIP lapse…AGAIN.  Hurricane season starts this week, and most weather experts agree that this year’s is shaping up to be a busy one.  Besides wind, I think I remember hurricanes to be known for bringing massive amounts of rain and flooding.  I could have that confused with something that my homeowners and business property insurance covers, but I don’t think I do.  Help the American Public out by renewing NFIP instead of vilifying the insurance industry for not paying claims after several coasts get hammered by hurricanes and floods this summer.

From National Underwriter

The National Flood Insurance Program will lapse June 1 because of congressional inaction, meaning insurance agents will not be able to provide new or renewed insurance policies under the Federal Emergency Management Agency’s Write Your Own Program.

Sen. Harry Reid, D-Nev., announced Thursday night that the Senate will recess until June 7 without acting on legislation that would extend the program.

The NFIP’s current authorization expires May 31.

“This is now the fourth time Congress will have let this program lapse, and it’s beginning to feel like ‘Groundhog’s Day,’” said Blain Rethmeier, a spokesman for the American Insurance Association.

“The country has seen record flooding this spring,” he said.

“Congress needs to pass a long-term extension because homeowners living in flood-prone regions of the country don’t have anywhere to turn should another major flood occur during this Congressional recess,” he added.

Bills recently introduced in both the House and Senate would have extended the current program: the House through Sept. 30 and the Senate until Dec. 31.

Separate legislation, The Flood Insurance Reform Priorities Act of 2010, H.R. 5114, would reauthorize the program for five years (http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h5114rh.txt.pdf).

It would also reform the existing program by increasing NFIP coverage limits, phasing in actuarial property rates, phasing out premium subsidies for second and vacation homes, and making business interruption and additional living expense coverages available at actuarial cost.

This bill was reported out of the House Financial Services Committee and is awaiting further action by the House.

It has no companion bill in the Senate.

Allowing the NFIP to lapse at the start of the 2010 hurricane season is “irresponsible,” according to the National Association of Mutual Insurance Companies.

“Once again, the NFIP has become a victim of politics that have nothing to do with the program itself,” said NAMIC’s federal affairs director, Kathy Mitchell. “Allowing the NFIP to lapse just as the 2010 storm season is beginning shows a troubling lack of judgment on the part of Congress.”

She added that “millions of homeowners and businesses will be left vulnerable to storm losses because of Congress’ failure to act at one of the worst possible times.”

The Write Your Own Program, according to FEMA, is a cooperative undertaking of the insurance industry and FEMA that allows participating property and casualty insurance companies to write and service the Standard Flood Insurance Policy in their own names.

From the Des Moines Citizen:

UNDATED (WSAU) Congratulations to U-W Stevens Point graduate Mary Chind. She won a Pulitzer Prize for breaking news photography yesterday.

The 42-year-old U-W-S-P grad is a staff photographer for the Des Moines Register newspaper.

Her winning photograph was taken during a flood of the Des Moines River on June 30th. It shows a man on a crane being lowered into the water to rescue a woman whose boat had capsized.

From the NY Times:

Breaking News Photography 2009: River rescue in downtown Des Moines: A woman is pulled from near the Center Street dam by construction worker Jason Oglesbee on Tuesday. A man who was with the unidentified woman died in the Des Moines River. A rescue team from the Des Moines Fire Department tried several times to rescue the woman but could not get close enough to her.

Jason Oglesbee, the construction worker who saved the drowning woman is as humble as he is brave.  This is the only quote he gave to reporters after the rescue:

“I happened to have the harness on, see. That’s all I want to say. They just harnessed me up and dipped me down in the water and I grabbed her and drug her — the crane drug her — to the boat and that’s it. What are you going to do if she’s like that? It’s no big deal. The whole crew did it. So that’s all I want to really talk about or have to say. You know, my supervisor…they all did a good job.”

Despite the fact that he risked his life and very expensive equipment to successfully rescue the drowning woman, what would his employers’ insurance carrier think about this?  OSHA?  Would he have gotten comp if he had been injured during the rescue? I’d love to hear some feedback on what other parties have to think about this.

Video of the rescue:

we always figured that this was common knowledge, but…

If your home has been damaged by this week’s flood, be careful about hiring someone for the repairs, says Gov. M. Jodi Rell’s office.

Unlicensed contractors have been walking door to door, offering reduced rates for work. Ask contractors to show you a copy of their Connecticut license or registration cards, insurance certificates and references.

Electricians, plumbers and heating-and-air-conditioning contractors are all required to be licensed. Even stump removal is considered a home improvement, so contractors must be licensed. You can check credentials by visiting www.ct.gov/dcp and clicking on “verify a license” under the consumer heading.

From the Hartford Courant

And a little elaboration from the good people at WTNH

Hartford, Conn. (WTNH) – In the wake of the severe flooding that hit Connecticut, Gov. M. Jodi Rell and the state Department of Consumer Protection has issued a warning on home repair scams.

The warning urges all property owners who have been victimized by the storm to be cautious when hiring workers to clean up the mess.

“Sadly, almost as quickly as the waters rose, scam artists have begun to emerge,” Gov. Rell said. “It is despicable that unscrupulous people would take advantage of the misery of others.” “We are already hearing reports of contractors going door-to-door offering repair services, so I am urging homeowners to double-check the credentials of anyone they consider hiring before accepting any offers or paying out any money,” suggested Rell.

Homeowners are also urged to steer clear of high-pressure sales tactics, especially those with a high price tags attached.

If anyone has any doubts about a contractor, you can check their background with the Department of Consumer Protection to make sure they have the appropriate licence or registration from the state. Although workers from other states are coming to Connecticut for work, home improvement contractors working in Connecticut are required to be registered.

In addition, when you hire a contractor, they are required to show you a copy of their Connecticut licence or registration cards. “Homeowners who end up with property damage or unfinished work at the hands of a registered contractor may qualify for restitution from the state’s Home Improvement Guaranty Fund – but those who hire unlicensed or unregistered contractors don’t have this benefit,” said Department of Consumer Protection Commissioner Jerry Farrell.

As a whole, there is the perception that (most) contractors don’t utilize or see the value in using social media.  While, I mostly agree with this, the 30% of contractors that are currently unemployed could probably benefit from it.  I follow a few construction industry people on Twitter, and earlier this morning noticed that they are posting job openings!  Roadtechs GC has an entire account dedicated to only posting nationwide job listings.   Roadtechs isn’t the only construction industry member that advertises jobs on via social media, so poke around once in a while.  All these services are free, and you can lurk around without having to contribute.  If you’re out of work, spend 15 minutes cruising around facebook, twitter, and linkedin.  You might be pleasantly surprised how quickly your employment situation changes despite what your peers say about the mean with which you got it.

If your buddies will disown you if they find out you’re using the same sites as their kids do, here’s the link to Roadtechs regular website

dig around.  you’ll find something

As we’ve alluded to a few times here at FYR, our day job is helping contractors with risk management and insurance consulting among myriad other services aimed at protecting their company and reducing their Total Cost of Risk(everything that goes into risk management, not just the premiums and deductibles on the policies).  Anyways, our business model is different than your average insurance broker.  We don’t engage in pricing battles with other agents.  We walk away from prospects that don’t want to understand our business model.  We do a lot more than just insurance, but our fees are the same as you’re paying your agent right now.  Recently, I’ve noticed some strange irony between our business and the contracting business.

So, when we are meeting with a new prospect for the first time, we will spend the first part of the meeting discussing their business.  Lately, more and more of these meetings turn into complaining sessions about how there are too many people on bid lists, under-qualified contractors bidding work they don’t know how to do, people bidding ridiculously low numbers and on and on……

In the same breath that they berate their own industry, they turn around and buy their insurance based on all the things they hate about the bidding process.  Low price wins regardless of the expertise or capabilities of the agent.

Things not taken into consideration:

1.  Whether or not the agent or broker has any experience dealing with the nuances of contracting (unqualified contractors bidding on projects that they don’t really know how to complete)

2.  Whether the low priced coverage is comprehensive enough to protect every facet of your business (if the price is too low to cover materials/labor and any sort of profit, something is fishy)]

3.  Allowing every agent that calls you saying they can get you the lowest price to quote your insurance policies (long bid lists filled with unqualified contractors)

Shifting your mindset into a new way of doing things isn’t easy.  But neither is closing the doors to your business because your cheap insurance didn’t protect your company correctly.

Original Post Since my post about employee cell phone use on company time while driving, some pretty significant precedents have been set.  They were covered in this morning’s Advisen Front Page News

In December 2007, International Paper Company settled a personal injury lawsuit for $5.2 million with an Atlanta woman who lost an arm after being rear-ended by one of the company’s employees. The International Paper employee was driving a company sedan and was on her company-issued cell phone at the time of the accident. Even though the company had a policy in place that only allowed employees to use hands-free phones while driving for company business, the company still decided to settle the suit rather than let the case go to trial. In October 2004, a Virginia law firm settled a $30 million lawsuit for an undisclosed amount after one of its attorneys struck and killed a 15-year-old pedestrian. The attorney was driving her vehicle and talking on her cell phone to a client at the time of the accident. In December 2001, a Florida jury awarded almost $21 million to a passenger in a car that was struck by a salesperson who was using a cell phone while driving. The employer was found liable because the salesperson had been driving for the employer at the time of the accident. In February 1999, a large Pennsylvania investment firm paid a $500,000 settlement to the family of a motorcyclist killed by one of its employees who had been making a work-related call after hours on his own personal cell phone while driving. As these and similar cases illustrate, employers can be liable for accidents caused by their employees when an employee is driving a company vehicle or using his or her personal vehicle while engaged in business-related activities. Moreover, employers face potential liability for accidents caused by their employees’ use of cell phones while driving if the company provides the phones, or if the use of cell phones is an expected or encouraged part of the job. Employer liability in these types of cases is based on a legal doctrine called respondeat superior. The doctrine of respondeat superior exists throughout the United States, including Minnesota. Under this doctrine, an employer may be responsible for the harm caused by its employee if that employee was acting within the course and scope of his or her employment at the time the accident occurred. In addition to arguing that an employer is liable for the harm caused by one of its employees, some plaintiffs have argued that the employer is directly liable for its own negligent conduct in failing to provide adequate training or instructions on safe cell phone use, or failing to restrict usage.
As the legal precedents have shown, even guidelines in employee handbooks are superceded by the fact that the accident happened in the normal course of employment.  Now would be a great time to buy your staff bluetooth devices to talk on when they’re driving, or tell them that no client phone call is important enough to risk a 20 million dollar lawsuit over.  I’m sure the people who dismembered or killed another human being thought that they were good enough drivers to talk and drive at the same time.  I’m sure the family of the victims disagreed.  Next time your phone rings when you’re driving, switch it to speakerphone(90% of phones on the market have this feature) or call the person back when you have parked.  To make it even easier for you, here’s a LINK to some wireless headsets that are priced at $14.99 and above.

If you don’t know what the title means, head to this LINK and follow the directions on how to create a fanpage, then come back here for some ideas on what to put on it once it’s up.

These are some idea I got from other contractors on Contractor Talk

BrainHay:

No, I don’t think anyone goes there with intention to look for a Contractor. When I started my page I was thinking much the same way as HomeSealed touched on.

A lot of the people on my friends list are into Earthmoving, Excavating and Construction as well. So are their friends and friends of friends. As Facebook grows in popularity more and more of our customers will be in there as well (many probably already are). Makes it real easy for them to tell their friends about us. They can also comment on the page and write reviews about our business.

So my hope with it is that some of them will like the Spyder Hoe pics or want to follow the progress of our business and become a fan of the page. When they become a fan of the page then a link shows to it in their profile and exposes me to all their friends.

Also people searching for others with common interests and groups to join will find the page adding even more exposure.

Homesealed:

I think the purpose is more for networking then advertisement. Many times a friend of a friend will notice your line of work and become a customer… At least that is my experience.

Smadax:

We’ve had a Facebook Page for a while, it’s a good way to network amungst your friends and family; but it’s also a great opportunity for paid advertising.

Advantages…
1) Direct marketing; States/Provinces, City, Age, Gender, Educ levels, etc…
2) Pay per click
3) Daily spend limit
4) FREE WEBPAGE
5) Easy to use and update
6) Directly bills to your credit card
7) Can have scheduled start and end dates.
8) Ads can be paused and/or deleted at any time.

Smadax:

Advertisement directly marketed to my city, approx 70,000 population.

Examples of market information, based on one day…
4,508 times my ad was displayed on facebook.
26 hits on my business page
4 unique visitors
2 linked through paid thumbnail advertisement cost me 60 cents
1 time picture file was viewed

General Statistics…
58% Female viewers 42% Male viewers
5% of viewers are 18-24 yrs old
47% of viewers are 25-34 yrs old
42% of viewers are 35-44 yrs old
5% 45+ yrs old

Pay per click is great because a person has seen your basic thumbnail advertisement (free exposure) and expressed interest by linking to your facebook page I spent 60 cents on this one day and I have my budget set at $2.00/day… with the market being slow, in January I was billed $14.67 and I did get one new client… this advertisment definitely paid for itself!

You can set your pay-per-click rate to whatever you’d like, minimum 19 cents. The reason you have a choice is because the higher you are willing to pay, the more facebook will expose your advertisement on facebook.

I even use my business page to keep in contract with my crew, when I add a new event, they are sent invitations and if I change anything on that event the crew is sent updates via facebook (email notification)

Devon Z:

Having a Facebook page adds one more place for potential customers to find you or your website. You can post photos of work you have completed, press releases, and articles. Also have current customers become fans and write testimonials about how great your work is on your wall. If you have a link from your website to your Facebook page, then people who are checking out your website have one more place to find out more about you. Plus it is free – just takes the time to set up the page and update with information. Having a Facebook page just strengthens your web presence and gives you another way to communicate.

Techie:

While I think having a Facebook page doesn’t hurt, I don’t see it paying off too much right NOW to be putting in a lot of everyday effort into it. Rather I would set up your facebook page to pull in any blog posts you make or twitter posts. I’d rather spend time on a blog if you have something to say and twitter if you’d like to network with others. I think a personal Facebook profile account as the owner of your business would be more effective if you insist on using facebook. Take an active role in being the spokesperson for your business, even if you’re a 1 man show. There’s definitely a lot of people on facebook but using your personal (make sure you keep it professional) profile would be a better tool on there than a page. Join in on relevant groups and join in on discussions. Search keywords that are relevant to your business and network with those people, and converse with them. I think that’s the way to go about it at the moment.

KCRemodeler:

Seems to be lots of different opinions about Facebook, so I will throw in my two cents for thought.

I would never used the paid advertising part of Facebook for the services we offer!

However, if you don’t have a “page” for your business on Facebook, you are missing out big time.

First of all, it give Google one more page about your company to index. I have some clients that if you search for their business name, their FB page shows up in the results.

Here is how to maximize your use of Facebook….

1. Ask every client to become a fan of your page on Facebook.
2. Post before and after pictures of every project.
3. If the client is a fan of your page, be sure and “tag” them in the picture. When you do this, the pictures show up on their “wall” which then gives you access to all of their network. Their friends will see your page when they look at the pictures. Nothing bettern than an inferred referral!

No more time than it takes to maintain a FB page, I think you are crazy if you don’t have one.

I have a friend that is a photography – kids, families, etc. He generates so much business from FB it is crazy! No reason the same can’t happen in our business.

These are cut/pasted testimonials from other contractors that are having success testing out new marketing ideas and leveraging free web based resources to get more eyes/potential customers on their construction firm.  Setting up one of these pages takes about 10 minutes for someone that knows their way around facebook.  Feel free to post the links to your pages in the comments to show other contractors some tips and ideas that they could use to better their fanpages, as well as to grow your own fanbases.