It's a fact of life that truck-and-ladder companies are going to underbid you. Their sharpest weapon is price. You can counterattack with value, a key part of which is your workers' comp and liability insurance.

Homeowner Perceptions “The average homeowner isn't thinking about insurance during a sales presentation,” says Dave Yoho, president of Dave Yoho Associates and REPLACEMENT CONTRACTOR columnist. Most homeowners assume that every contractor has workers' comp and that homeowners' insurance will cover potential liability problems such as accidents. Those assumptions could cost them their home. Homeowners' insurance typically protects for accidents with potential damages in the neighborhood of $25,000 to $100,000, but liability suits these days often seek damages in the millions.

“If someone ever gets hurt on the jobsite, [the homeowner] wants to be dealing with a company that has insurance,” says Lee Ewing, president of Custom Remodelers in Clarksville, Tenn.

Credibility Factor In fact, Ewing thinks the issue is so important that his salespeople put it front and center during the company story, at the beginning of the sales presentation. “We want to present ourselves as a credible company, and part of being credible is being able to protect the client,” Ewing says. “We bring out our insurance certificate.”

Of course, Ewing points out, the contractor who carries insurance will be more expensive than the one without it. “During every step of the sales process,” he says, “homeowners are making decisions about why they want to pay this much money.”

Fresno, Calif.-based Cal-Tec Construction scripts its sales presentations to gain homeowner confidence. Salespeople carry laminated proof of the company's insurance to show at every presentation, says Greg Williams, vice president and sales manager. “We put it in the homeowner's hand and say, ‘Whether you do business with me or with someone else, promise you will check that they have workers' comp and liability insurance.' We make a big deal out of it.”

State Regs States have their own requirements for both workers' comp and liability insurance, and knowing what those are can help you sell. For example, prospects should know that in Rhode Island, homeowners' insurance won't cover injured workers if workers' comp is available to the contractor — whether he bought it or not, says Ed Ladouceur, president of StormTite in Warwick, R.I.

StormTite carries not only workers' comp but also $2 million annual aggregate in liability insurance, with $1 million per occurrence. That information gets prominent play in the two-page company cover sheet. In addition, salespeople leave homeowners a copy of the insurance certificate and contractor registration card. That written proof is important, Ladouceur says.