| R-R-R-Ring!
R-R-RRing! That’s the insistent sound of your phone with a
message from one of your residential customers. While
installing an air conditioning unit, your employee dropped
the unit down the stairs. The stairs are damaged, the floor
is dented, and the grandfather clock at the bottom of the
stairs is shattered from the tumbling unit. “What are you
going to do about it?” asks the customer. Your probable
response: “My insurance will take care of it.”
“Boss, it wasn’t my
fault!” That’s the sound of your service technician who
just installed a heat pump at a client’s home. It leaked.
It damaged the carpet, drywall and furniture, resulting in a
$5,000 bill. You think: “My insurance will cover it.”
“Gas explosion kills dog
… This story next on the 10:00 News.” That’s the sound
of your business about to test the phrase, “Any publicity
is good publicity.”
Story
continues below ↓
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You already
know that a heating unit you installed leaked and caused an
explosion, damaging the home and causing the death of a pet.
The homeowner now needs to move to a hotel, they’ve hired
a lawyer, and they are claiming negligence on your part. He
says you did not train your employees properly or have any
safety precautions in place. Your business name is now in
the news – negatively -- and you need a plan to restore
your good name.
You wonder:
“Will my insurance cover it?” These rather extreme
scenarios demonstrate the importance of protecting yourself
and your employees with a safety plan and a thorough
insurance policy -- and knowing when to use them. A few
thousand dollars to reimburse a homeowner for damaged
flooring and furniture is a minor amount and shouldn’t
have a huge financial impact for you. Insurance is for the
large claims that can bankrupt your business. But how do you
prepare for these unforeseen bumps in the road?
First, review
your general liability coverage carefully with your
insurance agent. Ask questions. Understand your limits and
coverage. Typically, general liability includes three areas:
bodily injury and property damage, personal and advertising
injury, and medical expenses. If your general liability
insurance is part of a business- owner’s policy (BOP), its
limits may be low. If you need more coverage, a separate
umbrella policy is a good option. You can determine the
amount of coverage you need by evaluating your potential
risk, the state in which you operate (both its legal minimum
and its history of awarding high damage amounts), and your
personnel quality.
Keep in mind,
if you have a $300,000 limit and the settlement claim is
$500,000, you are responsible for the difference. Consider a
minimum limit of $1 million on your policy. Adding an
umbrella policy can be a cost-effective way to increase
coverage limits. Next, implement a safety program. Not only
will this increase awareness throughout your company, it
will also afford you some insurance discounts and lessen
your risks. Ask your insurance agent for safety tips
targeted to your business market. You can distribute these
tips to employees and technicians in various ways: posting
them in your place of business, including them with
employees’ paychecks monthly, and e-mailing them as part
of an internal staff newsletter.
staff
newsletter. In addition, create a safety committee made up
of employees from each department to help you implement
safety procedures. This participation gives your employees
ownership in the program and fuels their desire to reduce
accidents. Hold quarterly meetings of the safety committee.
Then, communicate the committee’s policies to your entire
staff through short, regular safety meetings – under five
minutes per week. Make the meetings mandatory and document
attendees. The key word here is “document.” It’s
important to keep a record of those who attended, as well as
the safety tips you discussed and distributed. These records
will be pertinent if you receive a claim or legal notice
like the gas leak example. If someone is trying to prove
negligence on your part, you will have written proof that
you took measures to educate your employees on safety.
Your clients
place their homes in your custody while you are working
there, and they expect the utmost care. If you or your
employees make a mistake, the client expects you to make it
right. Be prepared and know your options. Making it right is
simply good business sense.
Editor’s
note: Matthew Stangle is an insurance agent with WSMT
Insurance, an industry leader for over 40 years. Based in
Maryland, Matthew is a member of the Heating and Air
Conditioning Contractors of Maryland (HACC) and writes the
insurance for several HVACR companies. He also ran a $5
million service location with 42 employees prior to joining
the insurance industry. Matthew proudly provides
personalized client service that includes unique ways to get
the most from your insurance policy. Visit his website at www.InsureHVAC.com
for details.
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