ForConstructionPros.com

Believe it or not, this month's column is not about your spouse restricting your play time, or about how much time you put in on the job, but about insurance. Many of you think today's insurance markets have you held captive - which is probably close to the truth. But we're here to see if we can make you a more profitable "captive" by changing your insurance equation around.

The amount you spend on insurance is probably the second biggest expense you incur, other than payroll. Over the past 10 years, it seems dealing with insurance matters takes more and more time, not to mention dollars, with no relief in sight. The cost bounces all over the place, you can't get an answer about what's happening in your markets, carriers are jumping ship. When you add it all up (health, workman's comp and property and casualty), it is completely out of hand.

To make matters worse (if that's possible), consider how much insurance companies just "love" to deal with construction firms. Let's face it, they don't. Your business is complicated and susceptible to large claims. It's no cup of tea for an underwriter, resulting in unstable and expensive insurance markets for contractors.

When you get down to it, however, insurance is a pretty simple business if you can control your risk. The underwriter takes your money based on his assessment of your potential losses, then makes adjustments as actual losses take place. Show the underwriter you have the ability to beat the odds and he will charge you less. Cost him money and you pay more. Pretty simple - all you have to do is control your business.

But as we all know, the contracting business is one of the toughest to control. And when you combine poor performers with the "best in class", the rates paid by the better performers are higher than they should be.