Seth and Ashley Pietsch & Jessica Hale - The 10 Things you Need to Know about Roofing Insurance - PODCAST TRANSCRIPTION

Editor's note: The following is the transcript of an live interview with the folks at Integrity Insurance and Bonding. You can read the interview below or listen to the podcast. 

Speaker 1:
Welcome to Roofing Road Trips With Heidi. Explore the roofing industry through the eyes of a long-term professional within the trade. Listen for insights, interviews and exciting news in the roofing industry today.

Heidi Ellsworth:
Hello and welcome to another Roofing Road Trip. This is Heidi Ellsworth with RoofersCoffeeShop®, and I am not tripping very far today because I tell you, this roofing road trip is just taking me right over the Cascades to the Willamette Valley, where I am with Integrity Insurance and Bonding, with Seth Pietsch, Ashley Pietsch and Jessica Hale. Welcome to the show, all of you. [crosstalk 00:00:37]
You know what? I love this, even though this is a virtual road trip, we still aren't really on the road. One of these times, I'm going to grab my mic, get in my car and come over and see you guys in Portland, because we're only about three hours apart. [crosstalk 00:00:52].
I would love it too. So today I'm... To me, this is a really important podcast for a lot of different reasons, but for a lot of people out there, there's a couple things that I'm just really scared of. And I'm really scared of anything that has to do with lawyers, and I'm really scared of anything that has to do with insurance.
But luckily for me, I know some of the best legal people in the roofing business, and I know the best insurance folks in the business, and that is Integrity Insurance, led by Seth and Ashley. Jessica has just started and really has kind of brought a whole new flavor of marketing and getting out there, and business development, so it's been really exciting.
So let's start out with a quick introduction. So Seth, can you start real quick? Just tell everybody a little bit about yourself?

Seth Pietsch:
Yep. Started in insurance in the end of 2007, been a Commercial Lines producer pretty much the whole time. And then in 2018, Ashley and I started our own insurance agency, Integrity Insurance and Bonding.

Heidi Ellsworth:
I love it. Ashley?

Ashley Pietsch:
And I'm Ashley. I started in insurance in 2004, working for my dad's agency at the time. And I primarily do commercial insurance, a lot of construction, a lot of roofing contractors. We also do personal lines here in the office as well.

Heidi Ellsworth:
And Jessica?

Jessica Hale:
Jessica Hale, I've just been in insurance just a little over a year, and property management and banking before that, and I love it here. It's a good fit, the whole values, morals behind Integrity is I think why our whole team loves it here, and what will keep us busy and thriving.

Heidi Ellsworth:
That is so true, and I have to say to everyone who's listening, this is not the first podcast we've done with Seth and Ashley. So to really talk about family business and the great culture that is there, please listen to some of our past podcasts on Roofing Road Trips, where they've talked about family and culture, and just how important that is.
But today we're going to talk about insurance. We're going to get down to the nitty-gritty. And Seth, I would love it if you would kind of start out with why is it... Honestly, for a lot of us out there, we think, "Well, there's just a lot of insurance people and we don't really know what to do."
For roofing contractors, why is it so important to pick the right insurance company to help them on this journey, and to help their business?

Seth Pietsch:
Well, absolutely. That's a great question. When it comes to construction and roofing being included in the construction industry obviously, there's just so many moving pieces and we always have a target on our back, from a claim perspective.
In the Pacific Northwest, we get a lot of rain, we get a lot of the weather elements that are always beating down or beating on our house, our roof, our siding, our windows. And so when a house has a leak or there's water penetration issues, you have the usual suspects that get looped, factored into the claim or potential claim. And it usually starts with the roofer because they're designed to keep the water out of the house.
So whether it's a roofing issue or not, they get brought in and they get blamed for weather issues or whatever related issues, even though it may not have anything to do with them. So really understanding the importance of having the right coverage is going to be critical, not from just if you are found to be liable and there is an actual claim that your insurance company has to pay out on, but you get brought into these claims, these construction defect claims, and the insurance has to defend you.
So the defense costs alone, depending on the situation, whether it's a Condo Association or Homeowners Association, those just defense costs can really add up and claim expenses. So having the right coverage in place is going to help just the defense cost alone, let alone indemnity payments.

Heidi Ellsworth:
Yeah. And you know what? That really leads to understanding your contract. And again, I'm going to come back from the simple side of things. It's not easy to understand those insurance contracts or any contracts nowadays. Terms of use, all that kind of stuff, it's all out there. So I always feel like I really need to focus on working with folks who can explain it to me, to make sure I'm not signing something I shouldn't.
So maybe Ashley, just some of the experiences you've had too working with some of the contractors on contracts, and just how confusing that can be?

Ashley Pietsch:
Yeah. A lot of contractors actually don't even know what's in their contracts. And so what we usually do here at our agency is, first of all, we usually review their subcontract agreement in place, and put together a sample certificate that they can send to their subs.
And that way, they have kind of a guideline to go off of what they need, what requirements that they have in their contract that they need to comply with, and really sit down and train them, sit down and go over what additional insured means, what waiver of subrogation means, what primary non-contributory means, and why it's important to your business and protecting you?
A lot of people have no idea what any of that means and it's in their contract, but they don't request it. And if you're not requesting it, you're not getting it. And a claim happens, then you are held liable for a lot of things that you could actually shift down to your subcontractor. So we take a lot of time going over that with clients and helping them answer questions, and all of that.

Heidi Ellsworth:
I think that's so important. You really need to trust, you got to find people like all of you to trust, to kind of help you walk through all of that. And Seth, I know the other day we were talking about contracts, and you said there are just some key things that you're finding in contracts for roofing contractors, that's really bad for them, that you're finding other brokers are writing or insurance companies, whoever it may be. Can you expand on that?

Seth Pietsch:
Yeah. There's a laundry list of things that you really want to look out for in your insurance policy, and this goes for any type of contractor. But in Oregon, once the job is completed, that's when the statute of repose kicks in. And that could be... Depending on its new construction, in Oregon its 10 years for residential and smaller commercial. And then a large commercial project is six years. So basically you're on the hook for construction defects for X amount of years after the project is done.
So when you're moving insurance carriers, or even at renewal, if you're trying to provide a completed operations coverage for prior projects that you've done in the past, one of the big things is a lot of insurance companies, when they write a new policy for a new... Not a new contract, but a new policy for a contractor that's, let's say been in business for 15 years, they try to throw on or want to try to throw on a prior work exclusion.
Well, a prior work exclusion, when you're on the hook for construction defects for up to 10 years for prior work that you've completed, that's definitely something that you want to avoid because sometimes it's very difficult to pinpoint when an actual construction defect manifested itself.
A lot of times it goes back to when the job was performed, but a lot of times it happens five years after the job was performed. And then they've got to figure out when that actually was. Well, if you're with a new insurance carrier and they have a prior work exclusion in your policy, anything that's deemed not to have occurred outside of their policy period is excluded. And now all of a sudden, you're paying your own defense costs out of pocket.
So that's one of the main things that I avoid, is a prior work exclusion at all costs, because that's excluded in essence, all your price completed operations that you've performed, at least up until the last, well, the statute of repose, but 10 years for residential in Oregon, which, that's a long timeframe to be held accountable for construction defects.

Heidi Ellsworth:
Yeah. That's a really long time. I'm like, wow, 10 years, and I've lived here my whole life. I didn't even know that. That is crazy. Okay, those are the kinds of things that I know you do all the time for contractors, and you're looking through their contracts, you're really looking at understanding their business because you understand roofing, which I think is such a huge part of it.
But I also know... So I'm going to make a comparison, but with computers, if you don't know the question to ask in Google, or you don't know the question to ask of how to fix this, you have a hard time getting the right answers. So it really starts with the right questions.
And Seth, I asked you to come up with your top 10 questions because we want to share those on Roofers Coffee Shop and really kind of every month, go through a question, but we want to kind of launch it off here a little bit. So those top 10 questions that we kind of talked about, can you share your top three?

Seth Pietsch:
Absolutely. My top three would... One we just touched briefly on would be, does your policy include a prior work exclusion? No matter what it is, a manufacturer, a contractor, whatever it is. But if there's something that's excluding prior work, that's something that you should be avoiding at all costs.
Depending on the situation, not all roofing contractors perform residential work, but if you are engaging in any type of residential work, you need to know whether or not your policy excludes residential work. And if you're performing new residential work, how that new residential exclusion is going to affect you, because just because you have an insurance policy, that does not mean that it's covering all the type of work that you're going to be engaged in.
So residential exclusions would be number two, and then I don't like bodily injury exclusions. So if there's any type of exclusion that pertains to basically an over action exclusion, which would be you don't even have to be the general contractor, but if you're a lower tier or a subcontractor and you are also subcontracting work out, you have a responsibility to keep the job site safe.
So if a subcontractor gets injured on the job, even though workers' comp in Oregon is sole remedy, which means they basically... the workers' comp carrier will pay first and ask questions second. A lot of times the workers' comp carrier or the subcontractor's attorney will come back to the general contractor or the contractor that hired them as a sub, and then seek for reimbursement of medical expenses.
And if you have an overreaction exclusion to subcontractor, your policy would exclude a subcontractor from trying to sue you or recoup medical expenses from their injured employee. So not every situation is going to apply to every single contractor, because if you're not subcontracting work, that's not a huge issue for you. But in most cases, almost every contractor is using some sort of a trade, or another contractor to help them with a job, or do some sort of a trade for them.
And so those are big issues having overreaction exclusions, and it's actually pretty scary to see how many policies I come across that excludes that type of work. It's more times than not that I come across these policies that have those exclusions hidden. And it's definitely very concerning to see how many insurance carriers that are excluding this type of stuff in their policies.

Heidi Ellsworth:
That, I don't even know how someone would be able to think of all those things. So to have this list to ask... So we have folks from all over the country, right? Who are there. So if you're in Florida, or if you're in New York, first of all, you should always check with Integrity because they are licensed.
Ashley, how many States now? It keeps growing.

Ashley Pietsch:
I think we're at 14 now. [crosstalk 00:14:09]

Heidi Ellsworth:
Jeez. So you should always check in there, but we're also going to have these 10 questions that are going to go over all these things that Seth... Those are the top three that we just talked about, but you're going to be able to have that as a document to really be able to start asking those questions when you get ready for renewals.
And so kind of talking about renewals, Jessica, I would just love to get some of your insights on what you've seen. You're doing a lot of business development. You've been working with Integrity and seeing the contractors, and talking to them.
What are you seeing and hearing as the contractors are coming in for renewals, or maybe they want to come in and have their policies checked? What are some of the things you're seeing?

Jessica Hale:
Well, I'm just going to say for stuff for my job, being on the marketing end of things, is to really make sure that our clients are happy and getting that feedback, and that is our retention is huge. And because of, again, for me, and the reason that I love it here, insurance is daunting.
There's a lot of details and input, and a lot of background that goes into it, and our pros here that handle that part. And I'm good at the relationship part, and so to really make sure that we have that retention because people don't just stay, they don't just stay because the price is low or the coverage is enough. They stay because they like the people and they feel heard and valued.
And so that's what it comes back to. For me, my part of the job is to make sure the beginning, are you understanding everything. At the end, did you get everything you need? We want to make sure that you do renew with us over and over again. And most of our business, a ton of our business, we're just starting to do a lot more advertising, and clearly, here with you.
But so much of it is just word of mouth. People talk about us, and again, sometimes when you have to up your coverage, if your policy isn't covering everything, maybe the price goes up a little bit. But if people are getting the service that they want and they deserve, they come back. They feel covered and valued, and those are the kinds of relationships we want to have with our clients.

Heidi Ellsworth:
Well, I think you are right on target because roofing is all about relationships. And when you can bring the personalities, the great relationship building that all of you have, with a great knowledge of protecting their business, their roofing business, that is so important. It can totally take you down. We've talked about this before.
And Seth, I know that we have fall renewals coming up. I don't know all the dates or all the time. So maybe just talk a little bit about kind of what that timeline usually looks like? I know it's different for all carriers in different places, but talk a little bit about that and then what the contractors should be doing right now to get ready to do their research ahead of time?

Seth Pietsch:
Sure. We do our best now. Sometimes we're ahead of the game, sometimes we're a little bit behind, but we do our best to try to start the renewal process 90 days in advance. For one, when you're ordering loss runs, which shows your prior claim and your current claim activity, loss runs are only valid for 90 days.
So when you start the process, let's say six months in advance before your renewal, well, that doesn't do too much good because your loss runs are only valued or are valid for 90 days. And so then you have to get them revalidate. So 90 days in advance is about when we start. 30 days before renewal, is about the time period that insurance companies really start getting serious about offering a quote, because for one, quotes are only valid for 30 days.
So if you're trying to really get ahead of the game, it's a little bit difficult. It's good to get all the information to your agent well in advance, but a lot of people are like, "Hey, we've got to get certificates sent out," which they do. We were fully aware of that because everything a contractor or a roofing contractor needs is usually yesterday.
So we understand the importance of getting things sent out, but it's very difficult to get quotes and buying coverage 30 days before renewal, because carriers are only sending out quotes within a few weeks before renewal because they're only valid for 30 days.
So if you are renewing your general liability, I would say anywhere from two weeks before renewal or maybe a little bit before, a little bit after, you're still in very good shape. So within a couple of weeks before renewal, if you're done and everything's bound and you've got the policy numbers and the binders, that's usually... you're in a very good situation from renewing early, because it's not the easiest thing to get bound and renewed two months before your actual renewal date.

Heidi Ellsworth:
Okay. Now, what if you want to change? What if you want to change brokers? What if you want to change insurance companies? And it's now, so we're in July, what's that process look like? And maybe Ashley, do you want to take that one? Kind of talk a little bit about that?

Ashley Pietsch:
Yeah. You don't feel like you have a relationship where there's a trust, or that maybe your agent doesn't explain to you what you have, or whatever. The sooner, the better. First of all, if you end up issuing a broker of record, which means that you're basically brokering your policy from your current agent to a new agent, each carrier kind of has their own guidelines, but it usually takes five to 10 business days for the company to process that broker of record, and transfer everything over.
So there is a waiting time, which a lot of people don't understand. They're like, "Well, I signed this yesterday. You're my agent. I need all this done." There is a waiting time. If you want to explore and see what kind of coverages you do have, we always say if you do have a good working relationship with your agent, call them, give them that chance, write down your questions, schedule a time to go over that.
If you don't feel like you're getting those answers, and you want to reach out to someone like us, another agent, give them the most time so they can really get to know your company, get to review your coverages, know what program will best be tailored to your business.
But literally, as long as you're probably doing it 30 days in advance, I would say there should be enough time, but you might get down to the wire.

Heidi Ellsworth:
And so a little bit of a mystery here to us non-insurance folks, but I've always heard that there's renewals in May and November. Is that myth or truth, Seth?

Ashley Pietsch:
There are, but they are also... We had some roofers renew last month and we have some this month, we have some in October. There's a lot of roofing contractors that renew in those dates, but they renew all year long, every day.

Heidi Ellsworth:
Wow. Good. Okay, because that's a little stressful, if you have to try to get in that certain time, that certain window, more like medical insurance probably.

Ashley Pietsch:
Yeah.

Heidi Ellsworth:
So I'm going to go back and I'm going to just talk real quick about when contractors are having problems with insurance claims or OSHA, or any of those kinds of... Safe in Oregon, all those different kinds of things. I know they don't all, how do they go about understanding the processes, who to talk to, what to go through?
So Seth, maybe you can kind of talk a little bit about that. Just when they're actually in the claims, in the problem.

Seth Pietsch:
That's a good question. What we try to do when it comes to a situation with a claim is if we... Sometimes we don't even get notified that there is a claim. We just, all of a sudden, get notified from an attorney saying, "Hey, your client's been put on notice," because in Oregon, you can go to the Construction Contractors Board and you can see the prior insurance carrier for every licensed contractor in Oregon.
So a lot of times, these different attorney firms will just send a direct notice directly to their carrier, whether it's current or prior. And now all of a sudden, you get multiple notices of a claim that you didn't even get made aware of, or the client wasn't even made aware of. And then all of a sudden, everybody just gets bombarded with a claim.
So put in a perfect situation, when there is an issue where we get notified or the roofer gets notified about a claim, is we gather the information as much as possible. The date the work took place, the type of work, the address, the client, just your most basic information that you would need.
We submit the claim directly to the insurance company. We follow up with them to make sure an adjuster is assigned. Once it is, we relay that information to the client, letting them know, "Hey, John Smith, Jane Doe, they're going to be contacting you. Here's their information. Here's our email or phone number, et cetera."
And so we get that process started to make sure that everybody's in the loop, the process is going as quickly as possible because when you're paying all this money for insurance and roofing contractors pay, more times than not, more money than other trades, just because of the type of work they do and the exposures, you wont have the best possible claim scenario that you can, because why would you be paying all this money for insurance when a claim experience to go south or negative?
So we're always following up with adjusters because adjusters, just like anybody, gets very busy. They're dealing with what they feel is the most burning hot fire for the day. And a lot of times, they don't follow up or get the chance to follow up on something that they need to.
So we are constantly sending out reminders for status updates on claims, to make sure that all the information is provided. If there is something missing, we help the client navigate what they need. So they're always being kept in the loop because if you go two weeks and you're wondering about a claim, that takes up a lot of your time in the day, worrying and wondering about what's going on.
So we try to be engaged as much as possible to just keep that claim process going along as smooth as it can, and just giving reassurance to our clients that we're handling it.

Heidi Ellsworth:
Yeah. That makes a lot of sense to me, and that's the kind of support you need. I can tell you what, when you're in the thick of it, you need to know somebody has your back and somebody is working with you, so important.
So I want to kind of take to that one step. I always love to talk about proactiveness. And so Ashley, what can roofing contractors be doing besides reading their contract? We've talked about that. We're going to come out with the 10 questions, but what are some other things that are really important that they do through operations, through their everyday business, to help keep their insurance rates down?

Ashley Pietsch:
Well, safety on a job site, clearly, that's where a lot of claims come from. A lot of claims come from auto, a lot of auto issues, making sure as a business that you're running NVRs before hiring somebody. When you hire somebody and then you send an MVR to the... Motor Vehicle Report to the agent and say, "Hey, we need this guy covered." And it's like, he's got multiple violations or she's got multiple accidents, or whatever, that's difficult.
That also can, at renewal time, play a part in jacking up your insurance rates. They kind of look at what your drivers, what your guidelines are as a business owner, when you have people that are driving your company vehicles out there. So really taking a part and making sure that the people that you're hiring do qualify to be driving a company vehicle.
I would say safety meetings, constantly meeting with your staff. There's a lot of companies that put in GPSs, that's always helpful. I'm trying to think about any other...

Seth Pietsch:
Yeah. Some of the big ones that we like to see is actual loss control meetings or visits with your insurance company. Not all general liability carriers, especially for roofing contractors performing residential work, have this opportunity or this option, but definitely on the workers' comp side.
We like to have actual loss control visits with our safety rep from the workers' comp carrier, because workers' comp is going to be one of your largest premiums that you pay from an insurance standpoint. And when you have an employee get injured on a job, or on performing a roofing job, it usually can be pretty severe because you're working at heights, you're working around... Just that in general, it can be a pretty significant injury and it can last for a long time, depending on how the disablement is, how long that lasts.
Your workers' comp carrier can be paying for several years after the injury actually occurred. So getting direct loss control with your designated worker's comp safety rep, or general liability rep too, they do those too, loss controls and just learning your hazards and exposures, those are really vital in your overall business health.
And it also creates really good rapport with your insurance company. Many, many times, if a situation comes up, and from an underwriting standpoint, frequency versus severity is actually more negatively looked upon because the way the insurance adjuster is going to look at it, or an underwriter, is they're like, "Look, you had three small claims, and luckily they were small, but if you have multiple small claims, eventually one of those small claims can turn into a big one."
So now you're looking at frequency and severity. So one big severe claim where it can be like, "Okay, this was just one of those off and/or... It, wasn't likely to occur again," is much more easy to loss control and to implement procedures to help reduce the likelihood of that happening. But if you're constantly rear-ending somebody in a vehicle, and it's constantly happening, eventually you're going to hit somebody hard enough, heaven forbid, where it actually does cause serious bodily injuries to that person. And now you have two rear-ends claims, and now a third one, and that one turns into be a $500,000 claim. And so now you have frequency and severity.
So constant loss control, constantly tweaking and meeting with companies that performed safety meetings and procedures and stuff. There's a lot of companies that specialize in that. I know Western States has companies that they work with that does that. So there's so many resources out there, it really shouldn't be that difficult now.
It can start to get expensive. So you have to obviously look at your budget to see how it's going to implement you, but there is three services that your insurance companies can provide as well that offer those.

Heidi Ellsworth:
That's excellent, that's excellent. That is such great advice. And so now, as we're looking at this, for everyone listening out there, what we really wanted to do today was kind of talk about those contracts, what to look for. As we said, we're going to have the top 10 on the website coming out over the next 10 months basically. And we also have talked about the renewals and what you can do to be proactive with insurance. I just think that is so key, and getting to know people is, I think one of the best things you can do.
So Jessica, as contractors are out there right now, how do they get ahold of you? How do they get ahold of the team to really kind of talk through some of these topics?

Jessica Hale:
You can obviously call our office. Usually within a few minutes, we can have an agent call you back if there's someone not available right away. Obviously Seth is the guru, so he's got a lot of the fine details, and we all kind of refer back to him, but email, calls, set up an appointment.
We love to have lunch with people, take you to a happy hour. We want to hear more about your business and learn what we can do for you. Key for us is we want to fine-tune something that yes, refers, but refers to... There're all kinds of different businesses and maybe of other construction things that you're doing also.
So we really want to fine tune a policy that works for exactly your business, and make sure your livelihood, your family, everybody's covered. So we want to get to know you a little bit more than a three minute conversation. And so yeah.

Heidi Ellsworth:
Yeah, that's perfect. And so just for everyone listening too, for that phone number, for the website, for everything that you need in order to get ahold of the team, you can find that on Roofers Coffee Shop, in the Integrity Insurance directory.
It's all there, phone numbers, information, names, the whole nine yards. So it makes it really easy for anybody to find this team out of Portland, Oregon. So Seth and Ashley, just real quick, any last thoughts? Any last words?

Seth Pietsch:
You want to go first?

Ashley Pietsch:
No. We just appreciate you having us, and this is an industry that we're really passionate about and we really love all the relationships we've gotten to know. If anybody has any questions, whether they just want to pick our brain, we're always available, and yeah, that's all.

Seth Pietsch:
Yeah. The roofing industry is absolutely awesome to be a part of, and we've been very, very blessed over the years to build the relationships that we've had, and the friendships that we've had. And I think everybody says, "Hey, read your policy, read your policy." Well, it's very difficult for a non-insurance professional to understand your policy.
So glancing at the endorsements, just to see what they say. And then if you have any questions, be like, "Well, does that pertain to me?" Having an open conversation with your Asian or getting the answers to your questions that you may have. That shouldn't take more than 30 minutes. I think everybody has an extra 30 minutes to look over their policy really quick, just to see if there's anything that stands out.
And it's the best way to fall asleep at night. If you can't fall asleep at night, read your insurance policy, and I guarantee you it'll put you to sleep. I

Heidi Ellsworth:
I love it. I love it. Well, I want to say thank you to all of you. I know we'll be here again. Also, as I said before, if you visited the directory, you'll also see where this team will be in upcoming trade shows. I know one of them is Western States this fall.
So be sure to visit them, watch for these questions as they come out to the site. And thank you, Seth, Jessica, Ashley. Thank you so much for being here today. [crosstalk 00:34:21]
Thank you, and thank you everyone for listening. We appreciate you so much, and please listen to all of our podcasts that are available on riverscoffeeshop.com under Read, Listen, Watch. You can find all of our Roofing Road trip podcasts there, but you can also subscribe to them on your favorite podcast channel. So be sure to do that so you don't miss any of these great episodes. I hope everybody has a wonderful day and we'll see you on the next Roofing Road Trip.

Speaker 1:
Make sure to subscribe to our channel and leave a review. Thanks for listening. This has been Roofing Road Trips with Heidi from the rooferscoffeeshop.com.