Monthly Archives: November 2015

9 Negative Phrases to Avoid with Your Clients (and what to say Instead)

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Lynette Gil | Property Casualty 360° | November 10, 2015

It usually plays out in slow motion. At least it seems that way to you.

You’re having a great conversation with a prospect or a client, and you’re thinking, “I think we could do business together.” That is, until a few words escape from your mouth that you didn’t intend to say, and everything turns sour within seconds.

If only there were a time-travel machine that would allow us to rewind to just before the exact moment that we catch ourselves saying the words that damage our relationship with that client or prospect.

We’re still working on said time machine — and building it to look like a Delorean — but in the meantime, SlickText, a marketing company that specializes in texting campaigns, put together a cool infographic with nine phrases that “pressure cook” problems. As a bonus, they also share what to say instead.

These phrases were originally meant for customer service representatives, but they apply to anyone [who works with people], really. More helpful tips SlickText offers when preparing to make a call include:

1. Don’t take complaints personally.

2. Show off your personality. This increases trust, and helps people relate to you and the solution.

3. Prioritize a solution. Instead of focusing on the problem, work towards results.

4. Don’t sacrifice your safety. If your gut is telling you something isn’t right, ask for help.

5. Once the problem has been solved, move past it.

Remember that practice makes perfect, and practicing these blunders will help you quickly adjust to different people and situations.

1. Don’t say: ‘Let me look into that.’

 

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2. Don’t say: ‘Unfortunately, no …’

 

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3. Don’t ever say: ‘There’s nothing I can do.’

 

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4. Don’t say: ‘Let me correct you on that.’

 

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5. Don’t say: ‘There must’ve been a miscommunication.’

 

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6. Don’t say: ‘I’m sorry, I’m sorry, I’m sorry.’

 

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7. Don’t say: ‘I have another call coming in, can you hang on?’

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New Jersey Appellate Court Holds That Coverage Exists for Consequential Damages Caused By Subcontractors’ Defective Work

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Denise N. Yasinow, Loly G. Tor and Christopher A. Barbarisi | K & L Gates | November 23, 2015

This past summer, the Superior Court of New Jersey, Appellate Division issued a favorable decision for owners, real estate developers, and general contractors regarding insurance coverage for damages caused by the faulty work of their subcontractors.  In Cypress Point Condominium Association, Inc. v. Adria Towers, LLC, the Court held that unexpected and unintended consequential damages caused by a subcontractor’s defective work constitutes “property damage” caused by an “occurrence” under a commercial general liability (“CGL”) insurance policy.  Thus, these types of consequential damages are recoverable.

The Cypress Point decision roundly rejected the Third Circuit’s opinion in Pennsylvania National Mutual Casualty Insurance Co. v. Parkshore Development Corp., which concluded that faulty workmanship performed by a contractor or a subcontractor that causes damage to the general contractor’s work is not an “occurrence.”

In Cypress Point, the plaintiff, a condominium association, brought an action against the association’s developer, the developer’s two insurers, and various subcontractors.  The developer served as the general contractor on the condominium project and hired the subcontractors to perform all construction work.  The plaintiff sought coverage from the insurers under the developer’s CGL policies for consequential damages caused by the subcontractors’ defective work.  According to the plaintiff, the subcontractors improperly installed the roof, flashing, gutters and leaders, brick and EIFS facade, windows, doors, and sealants.  The faulty workmanship caused consequential damages to the common areas of the condominium complex and to the unit owners’ property.

The trial court granted summary judgment to one insurer and dismissed the complaint against the other insurer as moot, determining that there was no “property damage” or “occurrence” as required by the policy to trigger coverage.

On appeal, the plaintiff raised two main arguments.  First, the plaintiff argued that under a plain reading of the policy language, consequential damages constitute “property damage” and an “occurrence.”  Second, the plaintiff argued that the trial judge erroneously placed substantial reliance on the holdings in Weedo v. Stone–E–Brick, Inc., 81 N.J. 233 (1979) and Firemen’s Insurance Co. of Newark v. National Union Fire Insurance Co., 387 N.J. Super. 434 (App. Div. 2006) to determine whether there existed “property damage” and an “occurrence.”

On the first argument, the Cypress Point Court found that consequential damages constitute “property damage” and an “occurrence” as defined in the policy.  On the second argument, the Court concluded that the trial judge erroneously applied the holdings in Weedo and Firemen’s and readily distinguished the cases on two grounds.  First, the Court concluded that Weedo and Firemen’sinvolved only replacement costs of correcting the defective work itself (cost of replacing stucco inWeedo and replacing firewalls in Firemen’s) rather than the costs of curing consequential damages caused by defective work.  Second,…

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Getting Beyond Emotion in Mediation

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Tony Lehman | The Dispute Resolver | November 23, 2015

Legal research and scientific research — especially in the psychological realm — overlap from time to time. A recent article in the ABA Journal was titled “Mediators find more tools through neuroscience” discusses how decision making in mediation may not be as logical and rational as we once thought.

Division 1 Member and Mediator Wendy Fassberg has seen this first hand in her practice in Los Angeles County, California.  Wendy’s practice focuses on mediation involving homeowner association disputes, with a particular emphasis on construction-defect issues. The article below outlines how mediators need to focus on the emotional aspects involved in getting to settlements in that context in particular, but it applies across the spectrum in the construction industry.  We thank Wendy for graciously providing this article to Division 1.

Getting Beyond Emotions Typically Present 

When Mediating with Common Interest Developments

by Wendy J. Fassberg, Esq.

Too often, disputes arise between the end users in common interest developments and the design and construction team that developed, designed, and built the subject property, whether the project is a condominium community, a gated community, or a mixed use development.   What the design and construction professionals must understand when trying to resolve these types of disputes is that, notwithstanding the fact that they may be dealing with a board of directors or officers of the HOA, the individuals with whom they have their dispute are homeowners dealing with their homes.  Most disputes that involve homeowners are emotionally charged.  The parties come to the table angry, resentful, hurt, fearful, or feeling vengeful.  Paradoxically, these emotions can be present even in a purely business, market relationship.  So, they are understandably a factor in many homeowner disputes where the issues are typically very personal.

One of the greatest impediments to the successful resolution of conflict is emotion.  Under a behaviorist approach, it is posited that because the parties are in conflict, they are so embroiled in that conflict that they experience a high level of stress, which causes them to put blinders on and to hyper-focus only on the conflict.  They have no peripheral vision which would allow them to see how this conflict integrates into the rest of their lives.  They have the selectivity of considering only their own position, often consulting family, friends, and fellow HOA members for opinions that are, of course, guaranteed to boost their sense of confidence.  This leads to an inflated sense of power.  And sometimes the attorneys get just as invested in the conflict as their clients.

But, if there is so much emotion involved, can mediation actually be effective in connection with these disputes?  There are several ways that emotion laden parties can improve the chances of resolving their dispute at mediation.  The first is to recognize when emotion rather than reason is directing their actions.  Once having acknowledged this important fact, there needs to be an understanding that when trying to resolve a dispute, the existence of emotion as a driving factor generally works against one’s own interests.  Therefore, ideally emotions should be checked at the door before entering the mediation.  This can be accomplished by stepping back from the controversy, and thinking through the ramifications of moving forward with litigation or other similarly costly alternatives.  Sometimes parties can do this on their own before mediation, and sometimes they need help.  The mediator is hired to be the one who is not in a state of conflict, and who is charged with remaining clear and mindful of the big picture.  It is the mediator’s job to help shift and change the parties’ thought process.  This includes working to bring the parties to the understanding that there are emotions present and how those emotions affect their decision making.  The mediator must then coax the participants back to a place where they can rationally evaluate their options and their alternatives.  For example, because mediation is conducted in a somewhat informal setting relative to arbitration and litigation, but one which is nonetheless overseen by a mediator, the parties can feel free to express their emotions during mediation.  This can sometimes provide a path toward rational decision making.  It is the ability of a party to “let it all out” that clears the way for them to compromise and reach a settlement.  Sometimes people just want to be heard.  Some are satisfied to tell their story and vent to the mediator, and some demand that the other parties hear what they have to say.  Design and construction professionals and their counsel must be mindful of this and accept, even invite this release in mediation.  Once having been heard, these parties are often ready to ramp down and look at practical solutions.

Timing can also play an important role in getting past emotional barriers in mediation.  If it is…

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Time to Hang Up the Spurs?

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Adam Gardiner | AdjusterPro® Blog | November 6, 2015

The Wild West Heads Indoors: Inside Adjusting

In our last article, The Changing Face of Independent Claims, we discussed how the claims industry is fundamentally changing the way it does business. The unpredictable and unregulated Wild West era of independent claims adjusting is becoming further streamlined, increasingly standardized and, to the chagrin of a few old cowboys, more civilized.

But what does this transformation mean practically, for adjusters and IA Firms? We will be discussing these changes in this and our next few articles.

THE WILD WEST GETS AIR-CONDITIONING

Perhaps one of the most noticeable shifts in the claims business is the increase in the role of “Inside Adjusting”.  Yes, it’s on the rise, and the carriers hope it will play an increasing role in future daily and — perhaps surprisingly to some — catastrophe response as well.   In fact, it seems that the carriers’ vision is that once the infrastructure is in place, the kinks are worked out and public expectations readjusted, even major catastrophe response will be adjusted remotely, supported by field adjusting and technology.

For those new to the business, inside adjusting is when an adjuster handles the claim remotely, typically within a call center with other inside adjusters. Instead of visiting with a claimant to physically inspect the loss, communication takes place by telephone and other technology. Pictures and even videos are submitted, along with any other documents required for the claim.

Another challenge is that desk adjusters must view the claim through the often biased eyes of the claimant.  So it is unlikely that field adjusting will ever fully disappear, but it is our belief that future field adjusting will be less often handled by general adjusters with full claim-closing authority. Rather, the parts of the claim that must be inspected physically will be assigned to in-field specialists whose job it is to transfer their findings to the inside adjusting team handling the claim as a whole.  In other words, they become but one part of a process.

WHY THE SHIFT?

Technology – Advances in technology are revolutionizing the way the world does business, and claims adjusting is no different. With the advent of digital pictures, video, scanning, drones and new programs and apps, it is increasingly possible for adjusters to obtain almost every piece of the puzzle they need to assess coverage, accurately estimate damage, and maintain customer satisfaction, without ever having to meet the policyholder or inspect the loss physically.  Any reduction in accuracy will, they expect, be more than offset by the increase in efficiency by the new system.

Centralized Workforce – Adjusters who only handle claims remotely can work together in the same location.  In the new generation call centers, hundreds of independent adjusters from several different IA firms can all be placed together in one large office, all under the supervision of the carrier itself.

Training, regulation and monitoring are all easier when the work force is together. This, however, is a tough change for those who love the personal connection, freedom and autonomy the industry previously offered.

Team Strategy – With adjusters all working in a call center together, they can operate as a unified team to handle a claim instead of one person handling the entire process start to finish. Multiple adjusters often touch a single claim, or a specific part of the claim, before it is paid out. Essentially, the claim now moves through an almost assembly-line like process. It has a less personal feel but the idea is that it creates a more streamlined, efficient and scalable system.

Money Money Money – Of course industries rarely make huge transformations without financial gain being at the heart of the matter. Ultimately, the rise in inside adjusting is designed to save carriers money while also giving them greater control over the entire process as it is increasingly outsourced to independents. They can use more narrowly qualified adjusters, pay them hourly, and reduce the messiness and liability of having so many adjusters in the field.

ACES & DUECES

For adjusters in the business or looking to get in, these changes bring both advantages and disadvantages. For experienced adjusters, especially those who made a lot of money in the previous CAT system, it seems like only bad news. The independence and financial potential of the Wild West era is changing, but — believe it or not — the new system does offer employees new positive opportunities.

Master of One – Up until recently, an adjuster had to be a jack of all trades. They’ve needed to know all aspects of the process: communication skills, damage assessment, estimatics, policy, negotiation contract law, local statutes, carrier protocol, etc.  And they needed to know it all from day one, making it risky for IA firms to hire new folks.   The process is now increasingly broken down, so that an adjuster doesn’t need to know everything to make a very successful start to her career.  She is part of a team that, together, will get it done.

Larger Viable Workforce – To handle a claim, field adjusters have always needed at least two things: to be there in person and to be physically capable of inspection. Climbing ladders? Scaling Roofs? Wading through debris? These are things that a field adjuster may have to do for any given situation. Combine that with a claim 100 miles from the nearest airport in a frozen state and things can get very challenging for a large number of people to handle. Inside adjusting allows the insurance industry to pull employees from a larger group, one not constrained by physical challenges or location.  Adjusters need no longer be deployed for one particular event, so deployments are much longer.  The call centers handle catastrophe and daily claims throughout the entire country, events coming and going.  Older adjusters will also be able to stay in the workforce longer.

Staying Close to Home – While it sounds simple, those adjusters who’ve been in the industry a long time have likely spent many a night away from home and family. Handling a claim from the office allows adjusters to stay closer to home regularly. And ultimately, it is safer.

Cultivating Company Relationships – Staying in an office, working with firms and carriers, learning aspects of the business from all around you… these are invaluable in creating a long term relationship with an employer.

This is part of the big-picture strategy; get promising adjusters in the door handling simple things, then cross-train them to expand their value.  This is a great equation for folks serious about the career.  Based on merit, strong candidates receive on the job training and promotion to more complex positions with more responsibility.  Sometimes this means promotion to management, sometimes it means a transition to field work.

TO EVERY SEASON

Yes, today’s claims industry paints a very different picture than what we saw 20 years ago. Some changes will be…

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The Changing Face of Independent Claims

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Adam Gardiner | AdjusterPro® Blog | October 2, 2015

First in a seven-part series on the evolving state of the claims industry.

The independent claims industry is a bit like the Wild West: unpredictable, with few rules only erratically enforced and where only the strong survive.

It’s tough. It requires grit.  But often enough, you get to be the good guy wearing the white Stetson.

Yes, for the right cowboy (or cowgirl), independent adjusting is a rewarding career.  But you should know something.  While it’s still rough and tumble, the West is slowly being tamed.

Changes are afoot and those that best anticipate and adapt will win out in the new dispensation.

But before we understand how the West is being tamed and what it means, we need to look at how it was born.

AN INDUSTRY GETS ITS SPURS

Independent claims adjusting arose in the early 70’s from a simple need: to buffer spikes in claims volume.  Insurance carriers began to outsource “overflow” claims to independent adjusters.  Because these adjusters served as independent contractors, carriers saved money by not directly employing a massive army of adjusters – which they would otherwise need in the event of a major catastrophe.

Otherwise, a permanent Hurricane Katrina-sized workforce would largely sit idle.

To insurance carriers, the use of independent adjusters ceased to be a luxury decades ago — becoming instead an economical necessity.  And a billion dollar independent claims industry got its spurs.

THE WILD WEST OF CAT ADJUSTING

Until recently, independent adjusting was been virtually synonymous with catastrophe adjusting.  And, since mobilizing thousands of adjusters in a matter of days in response to a catastrophe is expensive and messy, there were consequences.  Industry regulation was spotty, career paths unclear, training was all over the map, and safety rules were only randomly applied.  Things got tense and untidy.

Independent adjusting firms and adjusters tough enough to survive were paid handsomely.

Carriers, it turned out, were willing to pay millions to clean up claim spikes quickly enough to keep them out of trouble with regulators and skirt the wrath of the public.

And the industry still prefers the open range: low regulation, high expectation, unpredictability, and the chance of a big pay-day.  It’s a maverick industry, from the family-owned firms to the adjusters riding solitary in the field.

But industries evolve, and the claims industry is in an important evolutionary stage right now.

INDEPENDENT ADJUSTING IS THE FUTURE

Rather than outsourcing as an economic necessity, carriers increasingly see a real strategic advantage in the use of independent adjusters – in particular, a long-term advantage.

They’re transferring the expense, hassle and liability of employees onto independent adjusting firms.

In effect, the independent industry is becoming a human resource solution: ‘leasing’ employees rather than hiring; outsourcing an entire “department” of an industry.  And, as they lean ever more heavily on independents as a long-term solution, carriers gradually tame the Wild West.

CARRIERS TAKE A RISK

Outsourcing claims as a department is a bold move.  It means relinquishing full control of customer satisfaction for a growing percentage of non-catastrophe claims.

On the other hand, outsourcing grants carriers some enticing advantages.

One advantage is flexibility.  Cumbersome employee rights make it onerous to fire or lay off salaried employees, but independent adjusters are easily hired or let go in direct proportion to fluctuating claims volume.

Another advantage is financial. Using leased employees evades the burden of costly employee benefits.  This adds up to millions of dollars saved — a massive competitive advantage for the carriers and their shareholders.

CHANGE MEANS PAIN…AND OPPORTUNITY

Predictions are that the culture and the nature of the independent industry will continue to change until it is…

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