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(More customer reviews)For construction business owners, Broke: The Broken Contractor's Insurance System and How to Fix it, amounts to a powerful eye-opener in terms of the enormous risk of catastrophe taken every year as a result of a traditional, never-questioned insurance broker system that, according to author Bob Phelan, has been running what amounts to a scam (my word, not his) for decades now. If an insurance broker, for example, bids very low when asked by a construction owner for a price on next year's premium, that "savings" likely hides significant on-the-job risks that could, in a worst-case or even simply very-bad-case scenario, literally put this same owner out of business. It's all about protecting your "blind side," Phelan writes, drawing inspiration for this phrase from the career of the great defensive football star Lawrence Taylor whose spectacular line-rushing in pursuit of quarterback sacks over the years introduced this concept to the world, i.e., the ultra-high risk of neglecting one's "blind side."
Broke peppers its crisp narrative with other real-life analogies and anecdotes as well such as quoting E.J. Smith, captain of the Titanic, who said a short while before the famous accident "I've never been in any accident of any sort worth speaking about." When you add in the customer commitment philosophy of L.L. Bean, Bill Clinton's campaign slogan "It's the economy, stupid!" and lessons from the book The Black Swan, Broke's breezy and clear descriptions of the emergence of the "Risk Advisor" unveils a rather ugly picture of how bad this age-old system really is. "This game of musical chairs is all about who is going to end up holding the bag (and) which party will be exposed to the biggest risks when something goes wrong," Phelan writes. Later in the same chapter he adds, "I am endlessly perplexed as to how we ended up with a system where otherwise smart business owners bet their companies on inexperienced or incompetent insurance salespeople peddling cheap insurance."
Can this outrageously dysfunctional system be fixed, or beaten? Yes, Phelan insists, if we both understand how it really works and then commit ourselves to doing things differently. All owners of construction companies, large or small, should start learning how well they are really doing with their insurance needs as well as assess the TOTAL costs of their risks... not to mention how much profit they may be leaving on the table, year and year out. And if you think you already know all that, well my friend... think again! Broke may very well smash your long-held assumptions and cast the potential success or demise of your company in a whole new light.
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The system is broken: Construction CEOs are buying contractor's insurance based on the lowest premium, and the "savings" are costing them a fortune: up to $20 lost for every claim dollar spent. The status quo can break a growing company, because brokers get paid their commission, whether or not they help prevent claims, manage risks or improves safety -- and in most cases, they don't. Contractors can go broke: driven into bankruptcy by hidden exposures and insurance loopholes that leave them blind-sided to their biggest risks. Construction Risk Advisor Robert Phelan deconstructs the broken system with common-sense ideas to fix it: ways to help prevent the high cost of low-priced coverage and keep contractors from the dangers that can bring down their business.
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