In addition to having effective processes in place to resolve customer construction defect issues, you should also have tools and processes to efficiently address customer property damage and personal injury claims that may arise in connection with a remodeling project.
Insurance Is Essential
Many property damage and personal injury claims that arise from your business operations may be insurable. Therefore, purchase your insurance from a reputable agency that regularly works with the residential construction and remodeling industry; insist on coverage from reputable and established insurance companies; and, most importantly, review and understand both the coverage and exclusions in any policy you buy.
Insurable customer property damage claims involve damage to a customer’s real or personal property resulting from your company’s work on the premises (i.e., water damage caused by an improperly set toilet; a fire caused by defective wiring). Build a consistent process to address those claims with your insurer.
A second type of property damage claim involves allegations of theft of customer personal property. Your insurance likely will not cover intentional or criminal acts. For these types of claims, direct the customer to contact the police and their homeowner’s insurer; make a claim with your insurer (knowing that there may not be coverage); conduct your own investigation; fully cooperate with police and insurance investigations; and then make decisions regarding settlement based on the facts established.
Insurable customer personal injury claims involve physical injury caused by your work (e.g., a cut foot from a knife blade left on a new carpet). Have a prompt and efficient process to ensure your insurer has access to all the information it needs to address this type of claim.
The second type of personal injury is likely not covered by your insurance. These claims involve allegations of improper or inappropriate touching or threats to a customer (anything from arguments to actual physical confrontations and allegations of inappropriate sexual advances). It is essential that you have representatives in place who can remain calm and address each of these types of situations as they arise and, where appropriate, involve the police.
The customer should notify his insurer, and your insurer should also be notified. Resolution and settlement must be made based on thorough investigation and careful assessment of all facts and circumstances.
Customers with property damage or personal injury claims resulting from your business activities will appreciate your prompt, effective processes to resolve those claims. Failure to have adequate insurance or claims processes in place can result in damage to your business and reputation. Be ready for the bad stuff and it will prove to be not so bad. —Attorney Richard Feeley is president of Feeley Mediation & Business Law, which provides legal solutions for remodelers.
Safety & Profitability: Reducing insurance claims reduces the cost of doing business