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2007 Tip of the Month Archive
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January 2007: On-Site Repair Help
February 2007: Health Insurance Solutions: Health Savings Accounts
March 2007: Avoiding the 'Where are you?' Customer Calls
April 2007: Evaluate Your Sales Approach Now
May 2007: Slip and Fall Claims
June 2007: Bidding & Estimating Options
August 2007: Use of Snow Response Plans
September 2007: Measuring Lots for Pricing
October 2007: Bidding & Estimating Options
December 2007: Adding Clients as an Additional Insured?
January 2007: On-Site Repair Help
When evaluating repairs before or during a season, finding a repair company that will service your
machine on site is important, even if you have an in-house mechanic. When equipment is spread
out all over your service area you may not have the manpower or equipment to conduct repairs on-site during an event.
This tip adapted from SIMA's Skid Steer Loaders in the Snow & Ice Industry training video
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February 2007: Health Insurance Solutions: Health Savings Accounts - For more information on insurance, click here.
In order to remain competitive SIMA members must carefully look at all operational expenses and find other alternatives to lower costs. Health coverage is one of the highest rising operational costs to the self-employed. A Health Savings plan is an alternative to conventional insurance, which can save your company thousands of dollars each year.
A Health Savings Account consists of two components, a federally qualified, high deductible health insurance plan and a tax deductible Health Savings Account.
A Health Savings Account is a pre tax fund, which you can use to pay your deductible as well as those items which no insurance plans pay for. (i.e. Non-prescription Rx, alternative health care, dental & eye care, including Lasik surgery …almost anything other than cosmetic surgery.) The current maximum contribution allowed by the IRS for 2007 is $5,650 for family coverage ($2,850 single). If you are 55 and older, you can contribute an additional $800 annually. Another advantage to the self-employed is that this amount is federal and state tax deductible. Your pre tax fund can be used to pay routine health care expenses while building a tax sheltered safety fund for future medical expenses or retirement.
For example, if you only use $1,000 of the $5,650 that you invested, $4,650 rolls forward while accumulating interest from year to year. It’s your money and grows tax free in your choice of investments. That is why it is referred to as a Health IRA or a Health 401K. Best of all everyone qualifies for a full HSA deduction regardless of income or other plans status. It’s universal!
The financial benefits of these plans are the following:
-You pay no federal or state income tax (with the exception of: AL, CA, NJ, WI) on the money you deposit into your HSA.
-You “never” pay tax on the money you withdraw for qualified medical expenses.
-Your contributions roll over year to year to pay for future medical expenses or supplementing your retirement income.
-After the age of 65 you can withdraw your money without penalty for even non-medical expenses although you will have to pay your standard income tax.
-You will save thousands of dollars each year in health premium in an HSA vs. Conventional plan premium plans.
-Medical expenses are 100% paid by the insurer once you satisfy your deductible vs. conventional co-insurance at 80/20 or worse and all the copays and fees.
No one wants to pay over $1,000 a month for family coverage. A HSA with a comprehensive high deductible health plan can be purchased in the Philadelphia suburbs for less than $300 a month for that same family. This would cover all medical expenses including Rx, doctor visits, wellness, dental, visions, etc. You may then fund your HSA up to $5,650 this year. If you are wondering where you will find $5,650 to fund your HSA …do the math! The average family pays over $800 a month for health insurance. The HSA at $300 per month saves the family $500 a month or $6000 a year.
Snow contractors need to stay informed to alternatives to make your business profitable. SIMA is providing this information as a resource, and recommends that all members consider the options available to them for their insurance needs.
Special Thanks:
Greg Loerzel helped put this information together for SIMA. Greg is the Regional Director of the Mid Atlantic Region of Assurant Health. Greg was recently asked to speak at the National Assoc. of CPA’s annual convention. He provided one of the lead testimonies in Harrisburg PA. to make the HSA a state tax deduction. This message is meant to provide general information regarding the subject matter covered but not to provide tax advice. You should seek your own advice with a qualified tax professional for all federal and state questions.
Nancy Sullivan of Sullivan Contracting & Landscaping of Auburn MA (SIMA member) for bringing contributors to SIMA and assisting members with innovative ideas and alternatives to insurance needs. Nancy can be reached at info@sullivan-contracting.com or 508-721-7982.
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March 2007: Avoiding the 'Where are you?' Customer Calls
'We blast an e-mail to all our customers each morning of an event and during the day as conditions change. We have found no one complains about the extra e-mails, they appreciate being kept up to date and it really has cut down the “where are you phone calls”. This service also is excellent as a backup for the billing cycle as we refer any questions to the e-mail of that event.'
This tip was posted during an online discussion at www.sima.org by Bob Sargeant of Total Facility Solutions, Inc. in London, Ontario.
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April 2007: Evaluate Your Sales Approach Now
Spring and early summer is a great time to evaluate sales techniques. Many times, property managers don’t want to talk about snow since the season just ended. However, this is a great time to find out what they did/didn’t like about their previous contractor while it is fresh in their memory. Notes should be taken during these phone calls and the information should be kept readily available when the bidding season starts.
Good selling also means knowing the measurements and peculiarities of each site. Now is the time to get out and measure new sites and make notes about problem areas. Plan on targeting certain areas and get all the sites in that area measured. Come fall when bids are due, you will be limited in the number of properties you can measure by the amount of time you have.
This material was taken from the script of 365 Degrees of Snow & Ice Management , SIMA's newest training video.
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May 2007: Slip and Fall Claims
When the certified letter arrives notifying you your customers "right to recover".
-Report information promptly to your General Liability Carrier
-Cooperate with the claim reprensentative verbally and in writing as requested
-Be prepared to show any and all records of the event
-Do not try to settle the matter yourself!
Questions to ask and information to prepare:
Who was on the premises?
What time did you start and end service?
Did you salt and sand? Mixture and quantity?
Were there any subs involved in the work?
Do you have snow logs to substantiate your work?
This information was taken directly from the Risky Business: Insurance in the Snow & Ice Industry web seminar.
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June 2007: Bidding & Estimating Options
Bidding and estimating can be a time consuming task, but all properties should be measured for exact square footage. Square footage will allow for more accurate predictions on time and material needs. Once a property is measured, the measurements can be easily stored in a database for future use. Some easy ways of measuring properties are done with a typical measuring wheel and walking and/or driving the site. Some more creative ways are using a laser range finder commonly used on golf courses or GPS systems that can be used from the comfort of your office.
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August 2007: Use of Snow Response Plans
Snow response plans can be used in two ways. The first way is as a sales tool. After the snow response plan is formulated by the estimator, it can be used to accompany your bid to the property manager. The plan can consist of instructions for the personnel on site as well as the number and types of equipment to be used on site. This lets the property manager know that you reviewed his/her site with their best interests in mind. There should be no doubt that you took all of theirconcerns into account when formulating the bid.
The second way is for the personnel servicing the site. This is the ‘bible” that all personnel should use to service the site. If all directions for the site become part of the snow response plan, there should be no excuses for anyone not knowing what to do.
Want to learn how to create a snow response plan that works for your company? Register for SIMA's next online training course, Creating a Snow Response Plan, information to be announced soon.
This information was taken from SIMA's newest video, 365 Degrees of Snow & Ice Management.
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September 2007: Measuring Lots for Pricing
To properly estimate pricing for a bid for snow and ice control, a key component is measuring the area as accurately as possible.
This HOW TO MEASURE document provides a 4-step process to measuring.
This tip provided by Rich Arlington, CSP and SIMA member in Erie, PA.
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October 2007: Bidding & Estimating Options
Bidding and estimating can be a time consuming task, but all properties should be measured for exact square footage. Square footage will allow for more accurate predictions on time and material needs. Once a property is measured, the measurements can be easily stored in a database for future use. Some easy ways of measuring properties are done with a typical measuring wheel and walking and/or driving the site. Some more creative ways are using a laser range finder commonly used on golf courses or GPS systems that can be used from the comfort of your office.
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December 2007: Adding Clients as an Additional Insured?
What does 'Additional Insured' actually mean?
Adding a client as additional insured means that they can actually file a claim against your policy. This means that your client is 'piggy backing' on your policy, and can give them the right to have themselves defended by your insurance company.
'You must have complete confidence in your ability to manage the snow & ice at any location where you are willing to list your customer as additional insured' says Rich Arlington, CSP.
Advantages:
-You are giving them peace of mind - if you can provide the service to their desired level (as spelled out in a contract), then the possibility for forming a stronger, longer lasting relationship does exist
-You are working with the property owner/manager in managing risk---in other words, you are assuming all or the majority of the risk for issues related to slip and falls or other accidents caused by snow & ice on the property
-Many 'big box' stores require it--it seems to be a growing trend
Disadvantages:
-You are assuming the majority of risk on behalf of your clients
-You are opening your insurance policy to risk associated with negligience on behalf of your customer
-Your insurance company may charge a premium for adding additional insured to your policy
According to Darryl Beckman, a Litigation Attorney and columnist for Snow Business magazine, 'From a litigation perspective, an additional insured designation adds a significant number of issues, including when the carrier is actually responsible to assume the defense and indemnification of an additional insured.'
How does this topic apply to real life?
"The fact that additional insured would be an additional charge was not openly disclosed in our policy, our agent wasn't fully aware of it, and was buried in the regular print as 'additional premium may be billed for additional insured, ...case by case basis...' you get the idea.
We have never paid for a additional insured cert before and I didn't know enough to ask. It ended up being $103.00 per cert! If you have hundreds of clients...do the math." Michael Merrill, SIMA Member.
The term 'additional insured' can also be broken down, and these endorsements can come in all shapes and sizes. Some cover the sole negligience of the additional insured, others cover only for the named insured's negligient acts. Best advice: have a lawyer look at any additional insured situations you are creating with clients, and be sure you understand the risk.
So should I do it?
In determining whether or not to add a client as additional insured, these are the major factors and questions to consider:
-Insurance Policy: Is it allowable? What does it cost you?
-Client: What is your relationship? How reliable are they?
-Level of Service: What are you responsible for? What are they responsible for?
-Competency: You must be sure of the competence of your operations--you have to have the confidence that you can do the work, if not, you are opening yourself to a high degree of risk in the case of a slip and fall.
BOTTOM LINE: Darryl Beckman says that no matter what you do, 'you should never agree to indemnify a customer for the customer's own negligence'. If I client will not do business with you unless you agree, then you should evaluate finding a new client!
What else can I do?
If you are unwilling or not ready to provide clients as additional insured, no worries. Many clients don't ask for them, and least not yet...at the least, however, you should furnish a Certificate of Insurance for them, to show them that you are covered for snow and ice removal.
This article submitted by:
Michael Merrill, North Country Snow & Ice Management
Deb Matson, CSP, Allied Snow Removal
Nancy Sullivan, Sullivan Contracting & Landscaping
Rich Arlington, CSP, Arlington Lawncare
Darryl Beckman, Budd Larner PC
Brian Birch, Assistant Executive Director, SIMA
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