Property Preservation Insurance Needs and Coverage Areas
Recently our company was informed they could no longer add other companies as "Additionally Insured" and be the certificate holder.
This is what we were informed.....
Regardless of whom you work with...Cyprexx, FAS, MCS, First Preston, Sigma Construction, Safegard, Corelogic, BAC, BLM/Innotition, Pacific Preservation, Qualified West, Regis Development, Quest, Hec-lo Investments etc...(middleman companies)
None of these companies carry their own insurance for Property Preservation...
At least that is what I have been informed by our insurance agent...that said this is the turn of events that is taking place in the courts.
REMEMBER THIS IS BASED ON INFORMATION THAT HAS BEEN SUPPLIED TO OUR COMPANY. WE HAVE NOT ACTUALLY REVIEWED ANY LEGAL DOCUMENTS
According to information given to us by our insurance agent we(Property Preservation Contractors) are required to name the company supplying us work as "Additionally Insured" and said company has to be the "Certificate Holder". Now here's where things get convoluted. Say (EXAMPLE ONLY!!!!!) the company that is supplying you work is FAS or Cyprexx, a vendor on the east coast goes to a property and for whatever reason something goes wrong and six months down the road a lawsuit starts...now the attorney for the Plaintiff finds out that FAS and Cyprexx are the certificate holder on 3,137 policies, with said policies being located all over the country...The asking price on the lawsuit just went from one company's 1 or 2 million dollars and the pay day just got multiplied by 3137... That is correct. The company supplying the work just became a bottomless pit for legal resources. We all know that the attorneys are the only ones that make money when it comes to legal arenas of this nature. Consequently, insurance company's no longer wish to add additionally insured companies to a policy because they, themselves have no insurance it is YOUR insurance that covers them...This is something that you should IMEDIATELY look into. We are currently switching to companies that cover this particular type of business. However, our fees to operate just increased drastically.
Now let's talk about coverage area.
The company with an office in Austin TX, Orlando FL, Phoenix AZ, Glendale CA, ( I certainly hope you get the picture by now), these companies CAN NOT provide coverage to say Medford Oregon, Carson City NV, Butte Montana etc. without YOU performing the service.
The area you cover has certain issues that create conflict with the lowball pricing that the middle men want to force down your throats, Such as performing winterizations for less than $100. Any one that has performed this service knows that there is almost $40 to $50 dollars in fixed costs attached to this service. Or they only want to pay $12-$15 per cyd for debris removal, or include hazards in debris counts.( which latex paint is, has oils and chemicals in it) and your disposal fees are $15-18 per cyd...$50 for vehicle removal when tow companies charge $150 to come out...unless you have a Tow/wrecking/dismantlers license it is illegal for you to remove vehicles...Every single area in this country has different local laws and ordinances and state laws that these middle man companies have chosen to ignore and let us, the Property Preservation Contractors take the brunt of the responsibility should something go wrong. The problem is that ALL of us are so desperate for work to support our families that we are allowing this to continue.
As tax payers we have already helped the financial institutions with bailout money, now we are being asked/told/forced to assist with our labor, our financing as we have to pay for all upfront costs. Should we go broke in the process, albeit there will be someone else with a pick-up to haul trash away until such a time they figure out they have no more money for the dump fees.
In our coverage area I have spoken to 32 companies in the past 5 years that have gone belly up from the scenario...We have been very fortunate to be able to work with some companies that actually want us to succeed, not just give lip service and put out newsletters full of "atta-boy" propaganda on a monthly basis.
I would like to offer a couple suggestions that has help our company tremendously.
GET TO KNOW YOUR COMPETION. Work with them not against them.
It has helped us...a lot!!!!
DO NOT buy into the philosophy...You'll make up for it with volume... Lost revenue is lost revenue. Perform a Breakeven analysis on every service you perform.( I would be happy to supply anyone with a copy of ours, just go to our website and email us, with P&L INQUIRY in the subject line) This will allow tyou to actually see where your money is going on a daily basis...you will understand so much more about your business!!!!
And if your cost of operating goes up. YOU HAVE to pass it along and that means that the company supplying you with work has to pony up more money...
YOUR COVERAGE AREA is just that...someone in St Louis MO, cannot provide coverage to Harrisburg PA with you!!!! it is your coverage area and if the company is reputable they will work with you and get you the pricing you need to be profitable...if they won't there is a good probability they may be clearing 75-100 million a year and very possibly are traded on the NYSE...Yes there are several of these middleman companies that are traded making them a "bottom-line" company.
FIND YOUR LOCAL SCORE/SBA OFFICE. We work very closly with a member of Score in our area. This gentleman is a business mentor to us. He has provided so much valuable information and has never asked for a dime from us. If we had to pay for everything he has helped us with and continues to help us with we would be broke. His service has been invaluable...I really do not have an adjective that would describe how helpful this organization as been to our business. Lok into your local SBA/SCORE office they are there to help small bussinesses like us succeede...Never be affraid to ask someone more knowledgable than you for help...
PLEASE DO NOT MISUNDERSTAND MY INTENTIONS OF THIS POSTING!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!
I do not want to start an uprising with Property Preservation Contractors against the middleman companies I have mentioned in this writting. Everyone needs to make money, operative word...EVERYBODY...
I do not want to form a union of Property Preservation contractors.
I'm only attempting to offer information to help YOUR business.
Please feel free to contact us through our website if you'd like any information that we have in regards to anything I have stated in this posting or if you just want to say hello.
I hope we all do well in this upcoming year...