Question: How do I keep a loss from ‘going bad’? And what are the signs warning me to bail out?
Steve’s answer: Get proactive by setting clearly defined expectations both verbally and legally. Then maintain good communication and if all else fails listen to your gut!
I have two questions for you. How do you know when to walk away from a customer? And can I get paid by a customer that refuses to pay?
Here’s the big picture: I have a client that agreed to have work done on their house and would pay me out of pocket whether there was coverage or not. We agreed on a price but near the end of the project the homeowner requested that additional containment and an AFD be placed during the “re-build phase” to reduce airborne particles and dust from affecting their entire home.
Since I was not doing the reconstruction on the home I suggested that the insured call their insurance company to request more funds be allocated on their claim to cover the additional cost associated with having containment built specifically for the construction/re-build and the use of the AFD (Hepa Air Scrubber).
These additional funds were paid to the policy holder/home owner. But now they refuse to pay me!
The home owner then called to have an independent, third party Indoor Air Quality tester to come to their home and test for particles and mold. The Insured told me that the tester stated the mold remediation wasn’t done properly. And they are refusing to answer questions about it when I call them about the findings.
Steve, the home owner even requested that I buy a Particle Counter for the loss so I did so. But now the home owner claims that this Particle Counter was included in the loss and refuses to return it! I think I’m screwed on this one but how can avoid these problems in the future?
Apprehensive in Albany
Your question is a good one, Apprehensive. It is hard to know when to walk away.
“Pre-identifying” these ‘Discriminating Clients’ and/or preventing them from “going ballistic” is very important. (Especially in restoration losses where the stakes AND the potential liability are so much higher!) Here are some thoughts:
1. Establish “clearly defined expectations”. Do this both verbally and in writing from the git-go! Did you get a written, signed authorization to begin work? (My guess is yes.) BUT does the authorization have EVERYTHING listed out in writing? Plus even more importantly you must…
2. Update the paperwork as the job progresses. Any contract (which is what a legal work authorization is) should be a “living document”. After all, any complex mitigation is going to require “job changes”. These changes should all be written down as they come up AND the Insured should sign to approve them.
This document can protect you, the contractor, but even more important it sends a “silent message” to the Insured that you are on top of your game! (One of my favorite sayings in SFS Training is, “Good fences make good neighbors”!)
NOTE: This “ongoing document” should also include any equipment to be loaned (not “gifted”) to the home owner. For example, the famous Particle Counter you mention above probably wasn’t signed for as a loan from you to the Insured. Of course, the goal is to not let things to get to the ‘legal stage’ where you have to use any of this written stuff! Instead, the goal is to…
3. Build (and maintain) a positive, professional relationship with the Insured. Now I know you feel this Insured is the “Customer from Hell”. (And you may be correct!) BUT if I was to interview this Insured they likely would have an equally compelling and very sincere story on how YOU “done ’em wrong”! (don’t get mad at me- I’m just telling you like it is!)
So it is vital with all losses to maintain a positive flow of communication and good feelings between ALL parties. (Including the adjuster.) For example, HERE is one neat way to do using a password-protected, online Shared Folder.
NOTE: Remember that this “Cheerleader Relationship” should be based on much more than the communication between a contractor and the insured. Instead, the insured will decide if it is a “good job” or a “bad job” from ALL the Moments of Truth from ALL of the firm’s workers on the loss. (Including sub-contractors!) HERE is a great Restoration “Moment of Truth Outline” to help guide your relationship. And HERE is a complete guide to transforming any restoration business using Value Added Service principles.
4. Enlist the help of your adjuster. So if this truly is a difficult customer it should have already been evident to the adjuster. (The home owner has probably been giving the insurance company a hard time too!) So IF you’ve built a close relationship with the adjuster sometimes they can protect you. And even if they can’t you will be cementing ties with this adjuster for future losses. And finally…
5. Trust your gut. When you get warning signs from a client immediately tactfully air the issues. You may already know when to walk away. Offer to step aside. If they beg you to continue working then gently but firmly bring up the new “ground rules”. And yes, these rules should include a precise schedule of when payments need to be made. If you wait till the end of the loss you have NOTHING to “bargain with”. The Insured has YOUR finished product (a restored home) AND they have YOUR money! Never a good position to be in! So if that is where you are now I suggest you…
6. Learn from it and move on! I can’t tell you how many times I lost money but gained valuable experience from scenarios just like this! Life is too short to brood and agonize over this stuff. And the silver lining is no matter what punishments you could dream up for this horrible Insured… the life they are living as a negative, spiteful and dishonest person is its own worst punishment!
Hopefully this will help you recognize when to walk away and in general avoid sticky situations.And best wishes going forward!