Update on Worley overtime class action case Altier vs Worley and BP- BP granted dismissal May 2011

May 11, 2011

Doing some research today, I was able to locate a May 9, 2011 court decision granting BP’s motion to be dismissed from this class action lawsuit filed by independent adjusters working BP claims through Worley adjusting firm.  Here is the link.

It is interesting to see several more independent adjuster names on the court document now as plaintiff’s…several of which I recognize from online interactions from several sites.

In another online document from a February 25, 2011 Status Conference held  involving all BP cases, they do list both Alteir vs Worley and Alteir vs Worley and BP as item number 17 on the Agenda. Here’s the link to that pdf document found online.

The website listing the status of the 368 litigation cases against Deep Water Horizen does show these two cases still open here (search alpha order for Alteir vs Worley.

While doing some online research I also came across another case in AL that includes BP and Worley as well as ESIS who BP originally assigned cases to filed with the State of AL as one of two plaintiffshere which also lists it as a RICO case as shown in this document. I will make some contacts to see if I can get more documents if they available to the public. There is a short explanation about the type of case it is in the top right corner of the pdf document. The 2nd plaintiff listed on this AL case is CMCO, LLC and here is the trademark info I found on them but no clue if this is actually the plaintiff listed on this case.

Amazingly (not) is a website which is basically an advertisement from the firm filing the class action speaking to adjusters who may have worked for Worley found here. The website for the law firm is listed on the bottom of that link along with contact information.

As far as what independent adjusters are saying,  here is a lin to a CADO forum topic where a few were discussing this case when it first hit the news.

For links to our prior posts with the original Complaint documents which explains the details of the case if you missed it, here is the link.

As we locate more documents and information we will update the information here on the blog.

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Commitment-Part 2/ Standby Calls / Emergency Adjuster Licenses /Cat Codes

September 12, 2007

We’ve beat the topic to death on the change in the need for independent adjusters. Here’s one additional  article from the Canadian Underwriter quoting AMBest not only on the reduction in the numbers needed but also discussing downsizing. This morning, I had another disturbing call from a Claim manager from a large firm who was just told that his firm in Florida would be closing their Florida operations in the next few months due to the lack of assignments caused by  carrier actions on policy cancellations in FL leading to less potential for future assignments. I am sure we will be receiving many such calls in the months ahead after these non renewals take place as more quality well qualified individuals are “downsized” right out of their staff positions during this major insurance crisis facing our nation.

So what does this have to do with current standby calls as we now hear of tropical depressions 8 and 9 in the gulf and the mid atlantic? Here is the link to today’s post on the storm information. Here is part 1 in this series on the commitment problem in the independent adjusting field so you can view that before this discussion on standby issues.

With these two new storms will come the next round of “standby” calls that adjusters will receive from numerous firms. Adjusters report in our forums over at ClaimSmentor that they receive numerous calls from multiple adjusting firms when there is a potential for landfall or a new storm event such as a hail storm, earthquake, or tornado causing significant damage. These standby calls are made by adjusting firms to both experienced and inexperienced adjusters contrary to many forum posts you read that only the experienced will be called. We’ve completed polls and have talked to many adjusters to confirm this on our site. We actually have many trainee adjusters out on new storm assignments now putting their hard earned training to work as these firms develop new candidates for the future success of their operations as many adjusters reach retirement age. Everyone is usually contacted as they do not know how significant the damage may be and will later prioritize those sent out based on experience once better information becomes known on the actual numbers they need to send on to a carrier.

There are several stages of deployment utilitized in our industry.

First, the carriers have major national catastrophe departments who monitor these systems and weather events. You will constantly see news announcements about adjusters on standby for the carriers. Here are just a few of the many examples here from Boat US on their cat team and an old announcement from Travelers on deployment of their catastrophe team and resources. How about this recent Chubb Insurance announcement for the option to deploy emergency water and restoration firms to handle claims instead of adjusters? We have put an entire comprehensive list together on ClaimSmentor of all carriers catastrophe teams we have located through their websites and news releases for adjusters interested in staff employment for catastrophe work.

Carrier catastrophe departments differ on the way they decide whether or not to activate this department. Some carriers deploy these teams only if requested by a region’s executive department once a threshold such as 1,000 claims with the same date of loss are reached while others use catastrophe teams no matter what the work load is. Some carriers prefer to send in staff adjusters into a damage zone or utilize independent adjusters to assist their local operations as branch assist adjusters. I regularly see press releases from Farmers Insurance on small storms announcing the arrival of their storm teams and drive in operations which is quite impressive! The new developments with many carriers the past few years include the claim central operations and only limited assignments to field independent adjusters for building estimates while they handle additional living expense claims and contents claim inventories. Remember just because ISO declares a cat code that the carrier may or may not declare a cat and issue a cat code of their own depending on their own company statistics on loss damage. The carriers have increased their national catastrophe teams in the aftermath of Katrina so currently there must be huge numbers of losses before activating a large number of independents. These very decisions are going on in carrier offices nationwide at this very moment with the soon to be Ingrid looking like it may develop into a strong storm.

We also have ISO and the Property Claims Services offices setting designated Catastrophe Codes for insurers once a catastrophe event  has been designated.  Here is a recent report on catastrophe 17 and 18 from their services. You will also find these articles  here, here, and here on what is involved in setting a national catastrophe code which PCS defines as “an event that causes 25 million or more in direct insured losses to property “. The third link above gives information on the types of property it maintains the stats on for many insurers.

Insurance Departments also determine when a storm has been assigned as a designated catastrophe allowing adjusters to work in their state under emergency adjusters licenses as these links from TX, FL, and LA insurance departments show. Normally, emergency adjuster licenses are good for one storm or one hurricane event but here is an example from 2004 where the Fl Dept of Insurance allowed adjusters to use the one emergency license to work for all 4 named storms. Note that FL has new rules for emergency adjusters as of 2006 and LA has a new license law for adjusters in 2007. Pre- storm season is the time most adjusters make the decisions if they will apply for non resident licenses or work strictly off of the state emergency licensing procedures. There are pros and cons to both schools of thought we’ll discuss in another blog. Basically, some don’t mind complying with continuing education requirements to maintain the licenses for a non resident and like the fact they do not have to pay new emergency license fees for each new storm assignment. Having a non resident license also allows you to work all types of assignments in the state if you have the proper license while an emergency license limits you to work the designated catastrophes only. Many adjusters are not even aware that some states allow you only to work under an emergency license for the one adjusting firm you are appointed for and require a new license as you change firms. I haven’t quite figured out how adjusters are doing claims when they are working for multiple adjusting firms although appointed by one firm (self appointment applies to permanent resident and non resident licenses in FL not emergency licenses). Emergency adjuster licenses also are normally limited to a very short period of time such as 90-180 days and adjusters don’t enjoy the hassle in the midst of trying to work claims to complete paper work required to get extensions on their emergency licenses.

When carriers conclude their analysis of potential landfall, the number of policies in force in a given area, and the potential number of claims they expect, they will put the adjusting firms on standby. There is no guarantee they will actually be activated and the number of adjusters they expect to need from the independent firms is strictly a “guess-timate” as to what they will need. We posted a link in Part 1 of this series to the article  where the reporter followed Crawford and Company and reported about this that we highly recommend you read.

The adjusting firms will often call upon adjusters even before they receive the first call from the carrier knowing they have contracts lined up with them should a major storm require their services. Adjusting firms tell us at this point they start looking at their core group of dedicated adjusters and check for licensing history as it may make a difference in their selection depending on licensing options. If it is not a declared official catastrophe by the state, they may need folks with the resident and non resident license. If a cat has been declared, they can use other adjusters under emergency licensing guidelines such as the ones linked to above. Some firms “jump the gun” and pull the standby trigger too early afraid folks on their rosters will sign on board with another firm while others wait for more assurance on assignment numbers. It is a very tough call and balance to maintain to know exactly when is the right time to make those standby calls. An interesting discussion with a new adjuster last week reminds me that those of us who have been in the business for a while take it for granted that everyone understands these terms when this new adjuster told me they didn’t realize that a standby call was storm specific and they thought they were still on standby long after storm assignments had been made.

Adjusting firms consider standby to mean they do expect to activate and send you out based on preliminary assessments they have initially been given from the carriers and their own research and evaluation of the damage potential. The purpose of the standby call is only to check for availability. They do expect you to give them either a yes or no decision. Therein lies the problem. Should you say yes or should you say no to a particular firm? Should you “fee schedule shop” or just be direct and tell them “no”. Should you say “yes” even though you don’t know? What are the consequences as far as your roster placement in the future with a particular firm depending on the answer you give them when the standby call comes in?

The reality is that it is a very tough decision for adjusters to make. It is much easier if an adjuster has a history with an independent adjusting firm and knows their reputation for prompt payments, they’ve viewed the independent contract and agree to the terms, and they have deployed with them before and know they make good calls rather than “calling wolf” and activating too many adjusters once too many times without concern for the need to send them back home by over staffing. The problems come in when those “A” firms haven’t called them and they are considering acceptance of assignments from other firms. Many adjusters indicate that they will tell all of the firms “yes I’ll be on standby”.. “please fax me over your fee schedule” and they take in as many fee schedules as they can during this standby period to make their decision and end up going out with the firm who actually “activates” them with the highest fee schedule. Most concerning is the fact they do not call back the other vendors they gave a “yes” to on the standby calls to let them know they will no longer be available. The 2nd group of adjusters is at the opposite end of the spectrum and will say “yes” to one and let others calling know they have already accepted a standby call and will call them back should they later find out that firm A isn’t going to need their services. We’ve found a third response used by some adjusters to be the straddle the fence response such as “thank you for calling, let me see if I can clear my calendar and call you back within 24 hours” while they take a wait and see attitude on what other calls may come their way. Anything other than a “yes” and you are taking the risk of missing an opportunity for work if “A” doesn’t activate you. You know that and they know that. It’s a very difficult call.

The questions come often from new adjusters “how long should I wait for them to call me back to actually activate me” and “what if another firm calls me with a higher fee schedule….what should I tell the first firm I said “yes” to”? What about the issue that an adjuster may have said yes to a firm only to receive their contract by fax and determine they are not willing to agree to those terms?

Adjusters need to understand what happens once they’ve agreed to be placed on standby. The adjusting firms submit the names of their standby adjusters to the carrier in preparation for receipt of files. It is not uncommon for carriers or adjusting firms to begin using those names to assign files the moment claims begin coming in. Ever wonder why you are being told by an insured you are the 3rd adjuster name they’ve been given on their file yet you see not one prior log entry showing the file was reassigned to you? Many times it is because of this very reason known as “no show” adjusters. (There are many other reasons this could happen during zoning assignments when a carrier finds out that too many claims have come in to an adjuster assigned to a particular territory and move the claims to even the workload for prompt claim handling and this is all going on while your traveling to the site or in induction center meetings before you have even seen the files). I was astounded to find out from many adjusting firm managers how high the percentage is on “no shows”. One firm provided the history of 800 employees on a roster and the inability to activate 200 of them as the majority had accepted other assignments during Katrina.

Standby is not a guarantee or an activation of your services. It is an “are you available” call when handled properly. In the past, there were no fees offered for you to “standby” waiting for the activation call. However, during Katrina and other peak events, some carriers will offer a “standby” fee usually stated as a given flat rate per day while you are waiting to be activated. This gives the carrier some assurance they can actually count on those independent adjusters the firms have called upon while reimbursing them for possible lost income had they accepted another assignment while they standby for this carrier. During 05, our firm received several staffing requests that included these offers. One carrier’s standby fee was as high as $5,000. I would not count on potential standby fees as a sole factor in assignment consideration. First, there are very few of these slots open and they are quickly taken. Second, they are usually tied in to production factors such as ” if you conclude X number of files within 30 days” yet you have no control over the many delays in getting closed files through the approval chain. Third, we’ve seen many tied into the criteria that the standby fee only applies “until you get assignments” and we’ve heard many stories of adjusters handed files at 5pm on the 1st day after induction classes all day who are told the standby pay did not apply since they did get files day 1 much to their disappointment when they still had atleast 2 more travel days to get to their assigned claim territory and locate housing. Consider yourself very fortunate indeed if you have been the recipient of a standby fee. This was unheard of years ago but goes back to the supply and demand issues carriers know they face when the “big one” hits like Katrina. When resources become limited , they are willing to make concessions such as standby fees and increased fee schedules they previously never considered but you should not wait for such tempting offers under normal catastrophe conditions. Right now, there are literally thousands of experienced adjusters waiting on work and it looks very doubtful you should expect to see such offers this season.

It is important to consider many other factors other than just fee schedules and fee splits when determining your vendors of choice. How much support will the firm offer in the field when you have questions? Have they staffed up their support and accounting operations for a major catastrophe so invoices are promptly billed and followed up on? Do they have the required management experience levels to help you out on some of the tough coverage decision calls? Will management respond to your phone calls when needed? Are there enough managers to promptly process your closings so your files are timely invoiced? Does the adjusting firm have a fair contract? Does the adjusting firm pay you before or after the carrier pays? What kind of reputation do they have with other adjusters? Does the adjusting firm have good induction center material providing you with the carrier guidelines so your files are not rejected? Are you familiar with the carrier file requirements they plan to deploy you to and are you willing to handle your files accordingly? Does the assignment require electronic claim file submission so you can more promptly conclude your assignments or is the carrier going to require unnecessary trips back and forth daily to pick up and drop off new and closed  paper file assignments? I would rather work for a lower fee schedule or fee split for a good organized firm I can count on any day as an adjuster as would most good quality experienced adjusters.

 The next stage is “activation” or “deployment” where you are expected at a given catastrophe induction center meeting or assignment within a very short time frame. Those calls go out to the adjusters who have given a solid “yes” to the initial standby availability calls. It’s interesting to read the stories that many firms are even using automated voice mail systems to notify adjusters of standby needs such as this news article by Brush Claims and using online data systems to receive the standby confirmations from adjusters rather than relying on the telephone calls we were used to. Here’s another firm’s announcement from 2006, Mariposaltd,  about a similar service. I’d like to think these automated services also go back and notify those who did accept standby when to stand down if their services are not needed.

I’ve had several adjusters even pass on information that they have gotten follow up calls AFTER THE STORM from adjusting firm managers wanting the status on files electronically assigned to them when they didn’t even accept an assignment from the firm or know they’d been assigned files so you have to be very careful about who you give a “standby yes” to which assures you understand  each other on exactly what that firm expects of you if you told them you’d go on standby. Apparently, some vendors consider this a definite while many adjusters do not.

When the activation calls do go out, the adjusting firms are normally given a very restrictive period of time  for adjusters to report for assignment as induction center meetings are normally required and the dates preset. Now is not the time to be going on vacation or asking an adjusting firm for an “exception” to a reporting time frame as they have committed you to report within this given window of time. There can be serious damage done to the reputation of an adjusting firm by not delivering the service level of adjusters they promised the carrier they can produce. Citizens of FL imposes a $1,000 fine per adjuster not reporting within their stated deadline. You need to watch these contracts you are signing since many only state fines assessed to the adjusting firm will be passed on to the adjuster. If you have signed a contract and agreed to go on standby and “no show”, watch for further contact about these fines. I would think some of these new terms in contracts is to try to stop this very problem of adjusters accepting assignments and failing to show up when they reported to a different adjusting firm.

There are alot of resources at the carrier level and the adjusting firm level involved in assigning  adjuster HR records,  matching adjusters to claim managers and reinspectors, territories, and file assignments. All of that work must be processed again as well as involving many other support folks to reassign files and locate replacement adjusters. It also puts the carrier in a bad light when an insured is told their file is constantly changing hands yet they have not heard from anyone not to mention the “heat” the adjuster who does call is going to get when calling an insured. You cannot blame an insured from being utterly frustrated by constant reassignments without the first inspection.

I don’t have any question about the ethics an adjuster should have when accepting assignments or agreeing to placement on standby whether for assignments they agree to with my staffing firm or with adjusting firms. Someone accepting an assignment and not showing up would be removed from our firm rosters as well as other adjusting firm rosters. I’ve had this come up several times while filling staffing requests on daily assignments with a firm “no” to a candidate that looks promising when the adjusting firm recognizes the candidate and recalls a “no show” situation.  Everyone understands the inability to commit due to all of the unknowns and in the majority of cases I do not think most adjusting firms would harbor any ill will if you give them an honest ” I’ve accepted another assignment, please consider me for your next opportunity” unless you’ve been known as one of their core adjusters who is regularly activated for assignments. Is what they do mind is counting on you when you’ve told them you are available then you not reporting for storm duty.

Tom Rongstad, a moderator on ClaimSmentor, made this comment in an ongoing topic about commitment which I think is very good advice saying :

An adjuster just entering this profession, whether it be a staffer or stormer, can have all the education and training certificates available from all the companies and possess the knowledge to operate several estimating programs having incurred the costs to do so. However, that person still does not have a reputation. That is one thing that can not be purchased. It comes with many years of commitment and hard work. Once you have it, you will not be the one turned around when the claims anticipated by the company do not materialize”

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While we can’t give you a simple answer on the standby ethics….only YOU can decide what kind of reputation you want to have in this industry.I’d give that some very strong consideration when formulating your plan of action BEFORE standby calls for TD 8 and 9 come in. Actions speak louder than words. Remember, the decisions you make when the calls come in will be decisions you must live with that will bolster or harm your reputation for years to come. The time for doing research on a firm was before you applied not after you get the calls from firms you sent resumes to.
 You should be in a position to make the decision on who your “A” firms are now- not next week when the calls start to roll.  Make a list and organize it into your “priority” firms just as adjusting firms decide who their “core” adjusters are they will call out first. This will help you have a clear head and a logical thought process when the time comes.  I had the opportunity to work with a fairly new adjuster during the midwest flooding as she sorted through 6 deployment offers from various firms. It was easy to prioritize them when she asked herself some of the many questions listed above in addition to reviewing proposed fee schedules. I’m very glad to recently learn she is happy with the decision made for the midwest assignments.We hope the strong majority of ethical independent adjusters will help preserve our industry by doing the right thing in representing the staffing firms, adjusting firms, and carriers they serve by handling these standby calls professionally knowing the big picture and how your decisions effect all catastrophe operations.

We wish everyone a safe trip should you deploy for one of these events. We invite all adjusters or claim managers to join us in the ClaimSmentor forums for ongoing discussions on these very topics. 


Splish Splash don’t go takin’ a bath- Understanding independent firm contracts

August 12, 2007

 I love the way music so aptly expresses so many things going on in life and love to use songs that help express issues much better than words ever can.  It’s a light hearted way to remember a principle we’re trying to drive home for  adjusters. Last week, our claim song of the week was Peter, Paul, and Mary’s song “Where have all the flowers gone” as our theme song for adjusters on “where have all the claim files gone ” here in this blog. This week we’ll talk about splishin’ and a splashin’ out on your new assignments and delving through the terms in many independent contracts. Here’s the link to the Splishin’ and a Splashin’ lyrics so you can follow along!

Every storm season brings out some of the best and the worst of adjusting firms and  contracts. We hear of adjusters “takin’ a bath” on their fee payments over some of the contract issues and non payment issues going on with hopefully a small number of unscrupulous firms.

Here are links to two very good commentaries on contracts. The first  here  comes from a blog entry over on CADO made by a senior adjuster and this article  by Donny Greer of Gulf States Training at the University of North Texas who shared this article with us over at ClaimSmentor with permission to post it in our blog :

Selection of a CAT Firm or CAT Claims Company

by:  Donny Greer of GulfStates Insurance Training at University of North Texas

http://www.adjustereducation.org

CAT Firms or CAT Claims Companies come in all shapes, sizes and flavors.   Not to mention their expertise levels and experience in running a real business.  
This type of business model structure brings out the best of  people and unfortunately the worst.  

Here’s what I am saying:  

These types of firms are generally started and run by professionals who are truly educated and experienced in both business and the insurance field with an emphasis on claims processing.  By and large, these firms are honest, forth-coming, and are personally chartered to “do-the-right-thing”.   But as you know, each and every field has its wolves!

Firms that process claims for insurance carriers earn their keep by accepting under agreement a claims assignment report containing many claims, from ten to five hundred, maybe even into the thousands as is the case during a major storm.   These claims could be auto, home, business and even in some cases casualty claims.  These homeowner types of claims are then farmed out (contracted) to Independent Adjusters whom are then sent out on the adjustment path to glory.  At least that is how it starts out.   

When I/As (independent adjusters) take on these claims, they likewise do so under the control of a contract offered to them by the CAT Firm (firm).   This is where things can first start to erode.   First, you receive a call from some firm with whom you have earlier registered with.  Next they ask you to go to the distant site.   With all your excitement, you’re off and running.  Now all seems well.   

Soon on the site, you are usually required to attend a Storm Meeting held by the firm with the goal of orientating new adjusters.  This meeting is quite beneficial as this is the place where all information is conveyed to the adjusters now on-site.   Miss this meeting and you miss the boat on policies, procedures, introduction to storm support personnel and so on.  Sometimes unscrupulous CAT firms purposely wait until you are at the storm site, and have incurred expenses before they present you with a contract to sign.  Don’t sign, and you must go home.   Could this be a contract signed under duress?  

What? you Say! 

Any contract is necessary for you and the firm you are working for, as it is the sole document that list out your agreement to provide services and spells out expectations of both parties.   This is a good thing as Martha Stewart has Said a few times.   The problem is not all firms are looking out for the adjuster’s best interest.  Read on… 

Most of the better firms out there are good, honest and looking out for the adjuster, and ask the adjuster to sign the agreement prior to deployment and before you the IA incur expense, but some, want you to bring in money for them, and under a very strict agreement written with mainly their interest in mind.  These firms however, are only concerned with a fast buck, and a BIG BUCK at that.   

Be aware of any contract wording BEFORE you leave your home for a storm.   Do yourself a favor and read the contract they are asking you to sign, before you invest in doing business with a firm you don’t really know.   Never wait until you have arrived in Ft. Lauderdale, entrenched in a hotel, in debt. for a new laptop computer, and then review a contract!  Know before you GO! 

In reading the contract, look for clauses where you are waiving your right to sue in court.  Read carefully the section that covers the adjuster’s hold back portion (portion normally held back by the CAT firm until all claims have been paid and settled).   Know this percentage BEFORE you travel and begin working.  Holdback is normal and there is nothing wrong with this type of arrangement.   Just be aware of how a contract might address such an issue.    

Again:  KNOW WHAT YOU ARE SIGNING  AS BEST YOU CAN. 

CAT firms bill the carrier based on the gross amount of say one of your claims.   They publish to you a fee schedule showing how you earn a percent of the billing amount.   The billing figure being an arbitrary figure listed on the fee schedule.  Shown as a split, in some cases 40/60 with 40% for the firm and 60% for the adjuster.   One question that comes to mind is what is this percent actually a percent of?  It is a percent of what the firm says they are billing the carrier for the claim.  Fact is, you don’t really know the true amount of the billing from the CAT company to the carrier, only what you are shown on the fee schedule. Your fee schedule only reflects your percentage of some listed amount published for the sake of the fee schedule’s completeness.  You are only allowed to see and know what some limited number of these firms want you to see.   

Keep this in mind when shopping for a firm to work for.  A 40/60 split sounds good, but your 60% is 60% of what?  You should know this answer  before you get engaged with a firm and way before you travel on your dime to a storm site.  You just might be working for pennies, not knowing it, and lining the pockets of some unworthy CAT Firm.   Be wise to Check-It-Out.  And beware of ads that solicit adjusters with talk of 70/30 and 80-20 etc., etc., etc.   Without you knowing what this percentage works against, you might be actually working for less that other adjusters with splits of 40/60. 

Speak with other adjusters on adjuster web sites that post experiences from other more experienced adjusters.   Join some web site forums and ask other adjusters who the good companies are.   Check with the Secretary of State’s office in the state the CAT firm resides to see if they are in good standing as a corporation.    

The best way to check out a CAT firm is to ask seasoned adjusters on portal website forums.   Trust what they tell you,  its better information than no information at all. 

Watch out for CAT firms!  Most are good, but try not to get so absorbed in deployment, that you forget to tend to the basics of being a good business professional.   

Any truly good company would have no problem at all allowing you time to review a contract prior to deployment, and any truly good company would invite any questions you may have about their structure, their officers, and how long they have been in business.  

One more time:  MOST ARE GOOD AND HONEST. 

Donny Greer
Donny Greer of GulfStates Insurance Training at University of North Texas 

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Our Blog continued below:

Don’t go out their “reelin’ with the feelin’ and a movin’ and a groovin’ with your excitement at obtaining placement on a roster or receiving new assignments without getting this most important document finalized.

Already this year we are hearing from adjusters receiving independent contracts faxed or emailed to them that contain “blanks” in the contract forms for important things such as fee splits, holdbacks, etc.  We have reports from one group of adjusters attending recent seminars for carrier certifications that could not find one person in the adjusting firm office or at the conference that even knew who signed contracts for their firm nor could the adjusters get copies back signed by an AUTHORIZED person with the adjusting firm. The firm had no idea where they were filed and they were not with the adjuster’s personnel records they sent in.  We have other adjusters being told ” that’s ok on the blanks- we’ll fill those in later”.    Now what does that tell you? Hello????????

One of the concerning contract terms in many of this year’s contracts concerns fines assessed back to the adjuster. We haven’t seen any yet that spelled out what exactly those fines were or the dollar amounts involved although I’ve heard there are some out there with specifics. The Citizens FL RFP manual for the adjusting firms does outline the many $1,000 fines to be assessed to adjusting firms yet the companion independent contracts the selected vendors have that we have viewed only indicated “any fines assessed will be passed on to the adjuster” type clauses. You need to have specifics in writing.

How about the non compete clauses? We saw one firm’s contract last year that didn’t allow adjusters to work for any other adjusting firm in the Southeast USA for 2 years! You need to check with your attorney regarding the validity of such non compete clauses in your state. I see many postings from adjusters giving advice about those “not holding up” in court. We’ll see. I’m monitoring the development of a suit file right now over in Alabama that was recently filed in June and we’ll link to it as things develop beyond the initial complaint and answers as well as searching for other cases involving adjusters and adjusting firms. We welcome any links if you are aware of any others.Don’t believe that the firms won’t enforce them! They are there for a reason and you need to abide by these contract agreements you sign.

We are looking for a good employment contract attorney willing to volunteer some time to look at a few of the examples of contracts we have to provide some general advice to adjusters if you know of anyone interested.  We’ll post their advice and links to their services both here on our blog and in the ClaimSmentor forums.  We are seeing simple contracts about 2 pages long to hearing reports of some in excess of 18 pages long. BE CAREFUL about what you are signing.

We recommend you seriously consider these terms in contracts and consider running all contracts by your attorney. I am not an advocate of “forum advice” posts being your sole venue of information on something so important as an independent contract. In my never ceasing quest to get insurance carriers and state insurance departments to help protect adjusters, I’d like to suggest if they aren’t doing so that carriers exam the independent contracts that adjusting firms give to their adjusters. It is not enough that the carrier sign a contract with the adjusting firm outlining their expectations but they should get involved in making sure that independents are not being taken advantage of in the independent contracts with the adjusters. Is it the “employee” versus “independent issue” keeping them from doing so? If so, state Insurance Departments need to establish acceptable standards for acceptable terms adjusting firms can use and have a published area on all state insurance department sites that list adjusting firms and their complaint ratios just as they do for consumers to determine what a carrier’s complaint ratio is before buying an insurance policy. I have a real problem with the fact a carrier has first hand knowledge of firms they have fired for poor claim service yet where do they publish that information for other carriers to avoid using them or for adjusters protection in accepting assignments for such a firm? They would fear being sued I’m sure but if the Department of Insurance required this they’d have to report it. I cannot stress enough we need to improve the communication gaps in the independent adjusting community for the protection and preservation of our careers.

Effective dates, Hold Harmless terms, Fee Schedules, Fee Splits, Payment terms (before or after carrier pays?), Witholding provisions(how much they withhold as well as how long), Non Compete Clauses, Venue (City/State/Court?)for where any disputes are handled, Other provisions such as Arbitration of Disputes, Fines to be assessed to you, information on who provides the Errors and Omissions Coverage, and many other important terms.. Seek your attorney’s advice BEFORE signing such provisions if you are in doubt.

We have many adjusters who sign contracts but then do not ask for a copy of the contract back after an AUTHORIZED person with the firm has signed it. We had a large group of over 30 adjusters working for one firm in 05 who could not pursue legal action for non payment on over 90 days of work as they had never gotten back a signed copy of their contracts showing any agreements between them and the adjusting firm. ASK for a copy of the Independent contract up front before you leave home as Donny points out above. If the vendor tells you they will sign them at the induction center, make sure you have two original copies with you and sign both and request they sign both and take one with you and keep it in a safe place in case you need it later. This will help you  avoid running into those situations where the “gathering” place has no facilities or staff to give you a copy on the spot.

Don’t assume because it is a large well established adjusting firm that you are safe signing their contracts. We have reports from several adjusters that contracts they assigned with a large vendor signed for Katrina duty contained 60% fee split agreements yet the payments received were 40% and they were then told that the 60% only applied to experienced adjusters. I’m curious if this would hold up in court since the fill in the blank could be twisted on the 60/40..is that 60 to you or 60 to the adjusting firm….we don’t know if it’s not specified in the contract right? Folks, that is not what their contract said. Make sure the fee split does apply to YOU and not termed “in general fee splits are….”.

Go movin’ and a groovin’ this storm season with the comfort of knowing you are protected if you encounter one of the tough situations with a non paying adjusting firm. Splishin’ and a Splashin’ just isn’t the way to handle business contracts professionally! Put those “dancin’ shoes on” AFTER you have properly prepared for accepting new assignments! We hope you will pass the word on to other new adjusters so they don’t go “takin’ a bath” this season!