Risk Management at Its Finest
CDS Insurance Services helps clients to avoid the pitfalls
For a contractor, purchasing insurance to cover both personal and business risks may seem as simple as calling an insurance agent and paying for a policy. In reality, the complexity of different policies is vast, the language used in the terms and conditions is foreign, and potential gaps in coverage or the restrictions on the payout of a policy may end up exposing a business to costly risks.
“We mainly work with business people who have been burned or have concerns that they don’t see the big picture and they’re just going to be left with a skeleton policy—a limited policy providing minimal protection that doesn’t cover their entire exposure,” says Chuck Swan, President of CDS Insurance Services, based in Glendora, California. “Essentially, we keep our clients out of trouble.”
To do this, CDS Insurance Services offers a comprehensive range of services to educate clients on their insurance options. The staff circulates weekly newsletters on pertinent issues to their client base. They offer a human resources hotline to answer employment-related questions. CDS Insurance Services provides advice on safety and loss control, ensuring clients have the necessary guidance in place to comply with federal and state safety regulations.
CDS Insurance Services conducts mock safety compliance inspections to ensure that their clients are aware of the financial severity that unsafe practices can have on their business, especially if the inspection is performed by California’s Division of Occupational Safety and Health (Cal/OSHA). CDS Insurance Services also offers valuable workers’ compensation tools to assist their clients in reviewing and analyzing their current and projected Ex-Mod, a rating applied by the Workers’ Compensation Insurance Rating Bureau to a company, which greatly impacts their policy costs, either positively or negatively.
“We’ve designed a firm that encapsulates all of the insurance services our clients need, including claims, audits, personal insurance, life insurance, health and medical insurance, and all business insurance,” Chuck says.
CDS Insurance Services’ client base covers all of Southern California and parts of Central and Northern California. The company also provides coverage for client operations that are outside of California.
Working on Behalf of Clients
Chuck started CDS Insurance Services in 1996 with five employees after becoming disillusioned with the lack of client care from national brokerage firms. In his experience, the insurance sector had evolved into a commodity-based industry dominated by insurance agents working for insurance companies, rather than a service-based industry working in the interest of clients. More than 20 years later, CDS Insurance Services has grown to become an insurance brokerage firm employing 35 people, each working to provide a unique, client-focused alternative in the insurance market.
“We do not have a direct employment relationship with our insurance companies; we are not technically an agent of that company, so we are not compelled to do anything except act for the benefit of our clients,” Chuck says.
Maximizing Client Care
Insurance companies have a low tolerance for policyholders that are noncompliant or have difficulty providing the documents necessary to complete an audit. In these circumstances, not responding to the insurance company’s requests can result in substantial additional premium.
Sandi Stude, Executive Vice President of Claims and Audits, is specifically dedicated to helping clients navigate the complex claims and audit processes, walking them through each step and being their advocate when needed.
“Sandi is an extremely talented and dedicated person who has assisted our clients with difficult claims and audit issues, settling more than 5,000 claims and audits over the past 15 years,” Chuck says.
Sandi also assists clients with reconciling audits. In one case, a client was billed almost $100,000 in additional premium by their carrier. After a thorough review, Sandi discovered mistakes that resulted in their client receiving approximately $15,000 from the insurance company instead of paying anything more.
The company also offers an online portal for clients to access guidance on topics, including government compliance, human resources protocols and safety regulations. The portal offers more than 3,000 documents that are continuously updated; that guidance is supplemented with unlimited telephone support from experts specializing in legal issues and human resources.
“Clients can call this number and say, ‘Hey, I have a really bad employee that I need to let go, but I don’t want to be sued, what should I do?’” Chuck says. “That’s just one example of how we keep our clients out of harm’s way.”
Managing Major Risks
A major risk for contractors is workers’ compensation claims for injuries sustained by their employees. CDS Insurance Services takes great pride in matching the best workers’ compensation coverage for each specific client.
The company has a dedicated team focused on making projections of Workers’ Comp Ex-Mod rates, which fluctuate based on the number of claims that a business encounters. Using software from Zywave, the team is able to forecast what a client’s Ex-Mod will be in the years ahead. Using that information, they help their clients to identify ways to lower their rates.
The high cost associated with the Zywave software prevents most midsized brokerage firms from offering this unique, comprehensive risk management tool.
“Workers’ Comp is typically the third most expensive line item for a contractor, so being able to project what that cost will be over the next couple of years is a benefit that is particularly attractive for our clients,” Chuck says.
Team in Action
Watching out for their client’s best interests is a primary focus for the entire staff at CDS Insurance Services. It is not uncommon for the experienced staff to uncover significant gaps in coverage when reviewing policies written by other agents.
Drew Carreon, Vice President, Producer and Business Developer at CDS Insurance Services, recalls a conversation with a potential client to discuss the cost of his general liability insurance policy, a policy that the prospect thought was too expensive.
“When I was reviewing a grading contractor’s policy, I found an earth movement exclusion buried in the forms and endorsements.” Drew says. “Well, this guy’s business is to move earth. He was shocked and upset to discover that his policy didn’t really cover his business operations.”
Drew soon found the contractor a policy with the appropriate coverage, for the same premium that he had been paying.
Similarly, another team member, Senior Vice President Eileen Merino, was advising a pool contractor on potential insurance packages and discovered that his policy actually excluded any work related to pool construction. Once again, CDS Insurance Services came to the rescue by providing proper coverage at an affordable rate.
On another occasion, the CDS Insurance Services Workers’ Comp Claims Team uncovered a pattern of suspicious Monday morning “work-related” injuries. By implementing a supplemental accident policy, the business owner was able to reduce his Workers’ Compensation costs by over 30 percent.
Collaborative Approach
The team’s ability to identify risks, solve problems and design customized insurance solutions for their clients is in large part due to working as a tight-knit team.
“Everyone really works well together for the benefit of our clients. If I have a question, an idea or am experiencing a problem, I can always collaborate with fellow team members that have a collective 200-plus years of experience,” Drew says.