Summer is here, and many remodelers are busier than ever. But now is the perfect opportunity to explore simple strategies to improve profitability.
Insurance Plan Timing
When does your workers comp and/or general liability policy start? There are good reasons to have your insurance year start on July 1. The biggest reason is to improve cash flow. Many insurance policies require 25% or more up front. If your policy starts January 1, that means you have to come up with a big chunk of cash in December—the worst time to tie up your cash.
Instead, if your policy is slated to start July 1, your cash need occurs in June, often the time of year when cash flow is much better. Check with your carrier to see if you can revise the start date of your policy. It typically won’t cost any more, but can improve your cash flow.
While looking at renewing workers’ compensation and general liability, be sure to shop around. Working with a broker can help, but if you’ve been with your broker for several years, he or she might be getting lazy and no longer shopping for your best rates.
And do a quick internal audit—make sure you are covered for the kind of work you do. Many policies have different rates for different types of work (both liability and workers’ comp), so make sure that you are properly covered. For example, you don’t want to have a claim against some exterior work you did only to find that you are only covered for interior work.
Don’t forget to check with your local Builders’ Exchange or other group that might have special rates.
Are you tracking your safety rate and experience modification factor? Do you know your insurance carrier’s policy regarding injuries? Typically, your workers’ compensation experience modification is affected by two factors: number of claims and cost of claims. In many states, there is a cut off (such as $5,000) where the cost of the claim doesn’t matter, only the fact that you had a claim.
For some carriers, if the injury is minimal, you can send your employee to an Urgent Care Center and pay for it yourself. It may not even show up on your Loss Run for the year.
Insurance Claim Prevention
Make sure that you have a way to report injuries on the job. If your paper timecard has a check box that says there were no injuries that day or week, it makes it more difficult for your employees to come back later to claim an injury. There’s nothing worse than the employee who calls you on Monday morning to say he or she was injured on Friday (when the injury really happened over the weekend on the Jet Ski). Many mobile apps even include this feature to keep better track of reporting.
Paying attention to these insurance details can go a long way toward lower insurance costs and improved profitability. Enjoy your summer!