Conflict of Interest

Okay… Last week, my salesman went out on a referral lead and the homeowner had wind damage. We got her signed up with a contingency and she called her claim in and let us know when the adjuster estimate was and I met my salesman out at the adjuster meeting because I was familiar with the adjuster that generally handles the claims for this particular company. Well… It wasn’t an adjuster that showed up, it was a contractor that was representing the insurance company. He inspected the roof and was very short and to the point and with me, almost rude. It didn’t really really bother me that much as long as the roof was approved and. Well, my salesman calls me yesterday and said the customer called him and says they were no longer going to be using us and they were going to be using the contractor that the insurance company sent out. So, I called the customer after that and explained to them that we had a signed contract to perform the work because of the approval and basically they would be breaching the contract if they chose to go with the other contractor and I would contact my attorney and this seemed to change their mind because they called me back today and wanted me to come see them and I got the actual contract signed with dollar amounts. In the end, we still got the job but got all the hassle of dealing with this preferred contractor. How would you guys handled this situation and do you deal with it often?

I am sure we have all been in a simular situation.

Think about how things would be different for your company if you were a “Prefered Contractor”. You would no longer need a commissioned Salesperson because your customers would be fed to you. For most companies this would DOUBLE their profit per job. Your marketing costs are most likely dramatically reduced. Heck, you would probably even be able afford to do the job right with the innitial offer from the insurance company, especially if you collect the deductible.

I know it sounds crazy but many of you would jump on the band wagon if you could get a gig like this. Oh, don’t forget they also get paid a fee to go inspect the job for the insurance company.

sounds fishy i would call the insurance agent that does the adjusting and ask him what happened. If he sole the job from you with a 3 day live contract im not sure ask authentic dad i even need help in that similar situation.

A guy could get hurt straddling both sides of the fence like that…ouch!

First thing I’d do is get rid of the “contingency agreement” and change to a contract. You just need to play with the wording. Aside from the threat potential, I don’t think the contingency agreement is worth the paper it is written on as far as preventing the HO from changing horses in the middle of the race.

The other thing I would have done is to politely, or even not so politely, informed the preferred contractor that you have a contract. If he gets snotty about it, I’d give him a straight forward warning about tortuous contractual interference.

Finally, I wouldn’t have left the contractor alone with the HO at all. Once the contractor left, I would have set the HO’s expectations for the preferred contractor attempting to have them breach their contract. In other words, cut the guy off at the pass so the HO tells them a big “NO” as soon as they call.

This is going to happen from time to time, nothing you can do to prevent them from coming out. The other good news is, the HO has a valid reason for requesting a second inspection if the first one is denied by the preferred contractor. They can say they want a real Adjuster for their inspection, not some lackey from a second rate roofing company that in the Insurance’s pocket.

Mark, as far as changing the contingency to a contract, is it any more difficult getting it signed at the initial meeting? Right now were over 95% on getting it signed on the initial meeting and the contingency works for what we need it to do on nearly every occasion. But, I would have no problem of changing it to a contract if that would make it more binding. Have you ever tried to take someone to court with a contingency or with your new contract?

We’ve had zero problems signing people up by eliminating the contingency. The most recent attorney I consulted told me he didn’t like the chances of the contingency holding up in court, particularly when there was a “termination” fee. There are statutes on the books relating to this kind of thing that forbid the termination fee. He also said we’re trying to sue for what happened before the contract officially becomes a contract which gets a bit sticky.

What we have now has essentially the same wording except we call it a contract from the start. The contract terminates itself in the event the claim is denied. Instead of termination clause, there is cancellation for convenience with fees being paid for the work completed up to the time of the cancellation.

The other thing I like is now, when we meet with the Adjuster for the inspection, we actually have a contract in place, not a contingency.

[quote=“Authentic_Dad”]We’ve had zero problems signing people up by eliminating the contingency. The most recent attorney I consulted told me he didn’t like the chances of the contingency holding up in court, particularly when there was a “termination” fee. There are statutes on the books relating to this kind of thing that forbid the termination fee. He also said we’re trying to sue for what happened before the contract officially becomes a contract which gets a bit sticky.

What we have now has essentially the same wording except we call it a contract from the start. The contract terminates itself in the event the claim is denied. Instead of termination clause, there is cancellation for convenience with fees being paid for the work completed up to the time of the cancellation.

The other thing I like is now, when we meet with the Adjuster for the inspection, we actually have a contract in place, not a contingency.[/quote]

Makes Sense, Mark.

Care to swap copies of contracts? Empirercs@gmail.com