WHAT YOU DON’T KNOW CAN HURT YOU!

November 7, 2011   ·   By ServiceMaster   ·   No Comments   ·   Posted in Air Duct Cleaning, Carpet Cleaning, Tile & Grout Cleaning, Upholstery Cleaning

As a home or business owner/manager, how well do you know your contractors or subcontractors? What is their safety record? Do they carry adequate insurance? Do they pay more for their insurance than other companies in their field do?

Their problem, right? Think Again.

“Licensed, Bonded and Insured” the ad reads. As an astute manager concerned about your exposure to lawsuits and other losses, you say to yourself, “They’re the ones to hire for our service contract.” Good Move! In fact, now that you think about it, you always hire licensed contractors when the work requires it.

And insurance? What’s the big deal? Hiring an insured contractor is a no-brainer. Anything else would be business suicide in this day and age of litigation.

You say you even require a certificate of insurance from the contractor’s insurance carrier or broker? Excellent! You’ve done the right things so far, but if that’s where you stop you could be blindly taking on liabilities and headaches you don’t need.

In addition to the other indicators you may look for, such as price, reputation, payment history and such, you need to investigate their safety record and safety program. This is critical! You or your business can be held liable in many situations for the hazards that your contractor(s) create. More and more the courts are disallowing hold harmless agreements or other contract verbiage as the sole means of protecting yourself from the unsafe activities of your subordinate contractor. They are viewing it as a convenient means to duck responsibility for maintaining a safe work environment. Every time you hire a contractor (or sub-contractor) you must invest the time and effort to select the best contractor for the job.

Here are a few things to look for:

Safety Program

• Do they have a program in writing?
• How involved is their management in the safety process?
• Do they inspect their job sites for safety compliance? How often?
• Do they hold their employees and supervisors accountable for safety?
• How are they notified of accidents and injuries on the job?
• Do they have accident review committees? How do they correct situations or practices to avoid a similar situation in the future?
• How are their employees and supervisors trained?
• Do they have a safety orientation for new employees?
• How often do they have safety meetings? Do they perform short, frequent safety training sessions (known as tailgate or toolbox meetings).
• Do they perform corrective training for employees who violate safety practices? Are they disciplined?

Safety Record

• Has OSHA cited them during the last 3 years? Any repeat violations that would indicate a disregard for OSHA standards rather than ignorance.
• What is their Experience Modification Rate (also known as Ex Mod or EMR)? This is a decent indicator of the contractor’s past Worker’s Compensation record. A little explanation may be necessary here. Insurance companies use the Ex Mod to compare companies in the same work classification and adjust their rates accordingly. It is a reflection of their Worker’s Compensation loss history for the last three full years.

If a company’s Ex Mod is near a 1.0, it means that they have an average loss history as compared with similar companies. A higher number, such as 1.4, means they have more injuries than similar contractors (40% more in this case). If you can get a contractor with an Experience Modification of 1.0 or less, there is a good chance you will be dealing with a company that has a safety record better than that of their peers.

Proof of Insurance

• Don’t forget to obtain a current certificate of insurance from your subcontractor. Don’t accept a “copy of a copy”. Request that their agent or broker send you the certificate. For contractors that have worked for you before and provided a certificate, which has since expired; don’t assume that they still have insurance. Obtain an updated certificate.

Finally, after you’ve determined that this contractor isn’t likely to put you and your company at risk, ensure that it doesn’t. Once you’ve hired the contractor, inspect it. Spot check to ensure that their employees and supervisors follow your safety guidelines (which you’ve communicated to them). Make sure that the work area is free from hazards to the public or your employees (you can be liable). Take notice if their employees are not wearing the proper protective clothing. If you feel uncomfortable with their safety practices, communicate that to their management. Either they will correct the situation or you need to shop elsewhere.

We’ve really only covered the basics, but it’s a good place to start. Also, this won’t guarantee that you won’t get stung by a reckless contractor, but it will certainly decrease your exposure. For more information contact your insurance carrier. They should be very interested in helping you reduce your losses, or exposure to losses.

The best place to start researching your vendor is with the Better Business Bureau. You find the complete record for Park-Ellis ServiceMaster online at www.toledobbb.org or by clicking here!