Is The Insurance System Targeting Certain Types of Roof Inspectors?

As I think I've mentioned before, sometimes it seems like the insurance companies are worried about whether or not we have enough work, so they create serious premium audit disputes that panic policyholders (and drive them to seek us out.) In the latest iteration of this, it looks like they're currently targeting certain kinds of companies that do roof inspections, and then subcontract out the actual roofing repair.

We've gotten calls from three different such companies in the past month, all with similar stories. All these companies don't actually do any roofing work themselves--they hire independent contractors that have their own Workers Comp insurance. This is an important point, as it means that the workers who are doing the roofing repair are not covered by the policies purchased by the roofing inspection companies.

The insurance companies are developing huge additional premium charges at the audits, saying that the roofing estimators, since they sometimes go up on a roof as part of their inspection work, go into the roofing classification--which is a pretty expensive classification.

One of these small businesses just got a bill for $400,000 from their insurance company. Another got a bill for $150,000. As one of these small business owners told me, "my annual profit from the company is $25,000--how do they expect me to pay $150,000?"

The thing is, there is a separate classification that is designed for those who do roof inspections--a class that is much, much, much less expensive than the roofing class. But the insurance companies are taking the position that NCCI rules require estimators who work for roofing companies to go into the roofing class. And even though there are no actual roofers covered by the policies in question (the roofers, remember, have their own policies) the insurance companies are adamant.

So now we're going to be trying to help these roofing inspection companies avoid being destroyed by these huge and unexpected premium increases. We think we have a sound, reasonable, and fair basis for using the roof inspection class for these companies. But only time will tell if we can actually persuade the various appeal boards involved to use it for these clients, or if the insurance system will instead drive these companies out of business.