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Insurance Costs Drifting Further Away

November 2, 2005
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The fall season is a busy time for contractor associations to gather for annual conventions, where members often find the information in the hallways to be as valuable as that found in the classrooms. A recent whirlwind tour of the 62nd Annual SMACNA convention, ACCA Commercial Roundtable meeting, ICP distributor meeting, and the HARDI convention revealed a consistent thread of conversation, both in the hallways and classrooms.

Insurance woes have beset union shops, open shops, commercial and residential contractors, and distributors' businesses. No company is immune from the pain.

A recent survey conducted by The NEWS shed light upon the fact that although many contractors are actually increasing their hourly rates, they are not able to maintain a consistent level of benefits for their employees. Why? Anyone who has ever flipped a hamburger, worked in a steel mill, or installed a low ambient kit on a rooftop unit knows health insurance costs are going up faster than the numbers on a gas pump after Hurricane Katrina. The difference is that after the panic went away, gas prices began to fall, e.g., $1.85 in Lawler, Iowa - the lowest in the nation on Oct. 28.

Insurance costs, whether for workers' compensation, property and casualty, general liability, or health care, have experienced a steady climb for more than a decade. Where was the panic that started all this? There wasn't one - just an out-of-control justice system that granted outrageous awards to injured plaintiffs. The chances of raking in big bucks after an injury, dismemberment, or tragic death are much better than winning the Super Lotto. Certainly, some well-deserved compensations have been granted to individuals who have been wrongfully harmed because of some tragic loss of life or loss of earnings potential. But isn't it time for some major tort reform?

The Boat Is Leaking

Most of us would like to win the lottery too; the dumb-luck reward that comes with buying a ticket at the right convenience store at the right time, not the reward that comes on the backs of all the hard-working people who can't get decent benefits packages anymore.

Think about it. It's your money that goes to pay skyrocketing insurance premiums and medical bills if you're an employee. It's your money that goes toward the escalating costs of workers' compensation, general liability coverage, etc., if you're an employer. Everyone is in the same boat. Costs keep going up for everyone, and the tort lawyers keep finding creative ways to suck money through a severely flawed legal system. They might as well be poking holes in your canoe with an ice pick.

When workers and employers unite to demand tort reform in our legal system, the boat will stop leaking. Write to your state and national legislators. Tell them you want reasonably priced benefits and you know a way to make it happen: change a legal system that doles out insane, $75 million awards to people who have smoked most of their lives and then wind up with lung cancer. You may say that tobacco companies deserve every bit of punishment they received for the way they behaved, but that type of thinking has permeated every industry in our economy, including HVAC.

The bottom line: Who do you think is paying for it? A pack of cigarettes costs a lot more money than it did 10 years ago. So does insurance coverage for an HVAC employee.

If everyone is going to be in the same boat, isn't it time someone brought a paddle?

Mike Murphy is editor-in-chief. He can be reached at 248-244-6446, 248-244-2905 (fax), or mikemurphy@achrnews.com.

Publication date: 11/07/2005

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