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  • David Watts

The Lost Five Commandments Part 2


ETHICS IN RESTORATION

There are occasions when the restorative drying leader faces ethical dilemmas, and frankly, it would be inappropriate for anyone to declare what each person should – or should not do. The answer to such questions is gray and require each person to use their own moral compass to answer them.

For the purpose of an exercise, the following scenarios are provided to inspire thoughtful dialogue among your colleagues.

1. A contractor enters into a contractual “preferred vendor agreement” with either an insurance carrier or a third-party administration (TPA) company that includes limitations to the services he agrees to render on their claims. There are legal and ethical implications when this contractor does not disclose this arrangement to their prospect customer as there may be a resulting conflict of interest. How should a conscientious contractor manage this ethically challenging scenario?

2. A misrepresentation of the facts on an insurance claim can result in an allegation of insurance fraud. The insurance representative requests that you “juggle” numbers on the invoice to reduce a particular charge in one area while inflating another area. Actually, any change to the scope of work that misrepresents the truth should conflict with a healthy moral compass. You wish to accompany the insurance company’s needs, but you wish to be honest too. How should a conscientious contractor manage this ethically challenging scenario?

3. The property owner wishes for you to compromise on your recommendation of what needs to be done on the project, and the requested compromise can potentially harm others. The owner is willing to sign a waiver/hold harmless agreement, but the fact remains someone might get hurt as a result. How should a conscientious contractor manage this ethically challenging scenario?

4. You are a licensed contractor as required by your municipal and/or federal requirements. The insurance representative or their TPA attempts to dictate how you must approach your project. They do not possess the licenses you do, but you wish to maintain the good working relationship with them. How should a conscientious contractor manage this ethically challenging scenario?

5. You have entered into a contractual agreement with the property owner. The owner has provided you with a copy of their consultant’s microbial testing report so that you can perform the work responsibly. An adjuster arrives at the job since the property owner initiated a claim, and observes your men wearing personal protective equipment and containment with obvious signage. The adjuster requests that you provide him with a copy of the customer’s microbial report. You wish to be cooperative with the insurance representative, but the document belongs to the property owner and may produce insurance coverage consequences. How should a conscientious contractor manage this ethically (and legally) challenging scenario?

6. An insurance company’s representative wishes to have you review a local competitor’s file on work that has been completed. This is an insurance company with whom you would love to develop a relationship. The contractor being reviewed is one with whom you have never been impressed with; in fact, you have disagreed with each other on several matters. The opportunity is clearly present to “hammer” this competitor and market your firm’s superiority. This is calling into question your ability to be an ethical adversary. You may have greater experience and qualifications – and even know “the game” better than the competitor does. However, how should a conscientious contractor manage this ethically challenging scenario? Follow-up question: If you decide to conduct this review, exactly how would you present your message to the insurer? What would you say? Would you “conveniently withhold” information you know would be instrumental in a fair conclusion even if it benefitted the competitor? Would you misrepresent a relevant fact or restoration principle if it benefitted the competitor? (Remember: the Golden Rule)

7. The property owner has expressed their desire to replace the carpet following a water damage loss on an insurance claim. As you inspect the carpet, you know that if it is delaminated, you can make the recommendation for the carpet’s replacement. It is not too difficult to simply disengage the carpet in the corner of the room and pull the primary backing from the secondary backing, photograph it and then claim the carpet is delaminated so that the customer gets new carpet installed. The property owner would surely appreciate this development. How should a conscientious contractor manage this ethically challenging scenario?

8. You signed up a property owner on an insurance claim. The property owner wished to have some unrelated work performed in their home and you gave the customer a clear estimate prior to beginning the project, the customer accepted the proposal. Once work began, the customer was unreasonable, overly demanding and simply could not be pleased. They demanded a price reduction, which you reluctantly agreed to as you, failed to make the margins you expected. The insurance claim is still underway and you have the opportunity to “bump” the insurance claim estimate to make your desired margins. The insurance company is likely to never know the difference. How should a conscientious contractor manage this ethically challenging scenario?

9. An insurance representative calls you and asks you to provide an estimate on a project that has been completed by a competitor. The insurance representative provides you with a copy of their scope of work and charges. You are not permitted to view the actual property; therefore, your estimate is significantly hampered as you are unaware of the many details affecting the estimate and scope of work. You know that the insurance representative is going to try and leverage your “uninformed” estimate against the contractor so as to leverage a price reduction. How should a conscientious contractor manage this ethically challenging scenario?

10. A competitor has been spreading malicious rumors about you and your firm. It has been done so frequently that it has actually become personal. One day, a prospective customer tells you that they will either award the project to you...or the contractor that has been spreading rumors about you. This is your chance for vengeance… and some karma! How should a conscientious contractor manage this ethically challenging scenario?

11. You have a large project with several supervisors reporting to you. As with projects of this sort, there are many tasks that must be managed simultaneously. One day, you arrive at the project and discover that one of the things you needed to schedule slipped your mind. Now the project is going to fall behind schedule… unless… you have a person who you could blame for the mistake. Sure, it’s not really their fault that the project is delayed now – but you saved your reputation with the customer. How should a conscientious contractor manage this ethically challenging scenario?

12. A local catastrophe has devastated your community. Competitors from all over the country have rolled into town and are enjoying a feeding frenzy of projects and cutting into your gross revenue. They seem to be completing these projects faster than you – and you realize that it is because they are cutting corners in their scope of work in order to accomplish more projects. Everyone seems to be doing this, and it seems you are the only one that is missing out on all of the easy profit because you insist on doing it right. You wonder if you should compromise on the process for the purposes of this event. How should a conscientious contractor manage this ethically challenging scenario?

13. You have worked with an insurance adjuster on several projects over the last few months. On the last few projects, the adjuster has been particularly critical of your scopes of work and invoice. The adjuster has said, “Don’t worry, we will make up the difference in price on the next one.” Well, you now have the “next project” with the same adjuster, and you wonder how you are supposed to make up the difference as the adjuster stated. You know what you deserved on the last project but how are you supposed to make up the difference on a completely different insurance claim? How should a conscientious contractor manage this ethically challenging scenario?

14. You are grateful that your business is busy. Things are going well. One day, a very large project opportunity arrives. The prospect expresses their “high maintenance” demands and you know that your other obligations will make it impossible for you to fulfill their expectations. You pretty much have the job if you want it – all you have to do is say “Yes!” to their terms. How should a conscientious contractor manage this ethically challenging scenario?

15. You agree to participate in an insurance claim referral program. As a participant in this program, you agree to certain stipulations including:

a. a fee is charged to the contractor for the referral,

b. price caps and/or reduced rates,

c. procedural mandates that prohibit the use of certain tools and technology,

d. strict demands that communications must be with the program representative rather than the insured,

e. the contractor must forfeit their own contract and use the contract/agreement provided by the program representative,

f. paperwork must only be submitted to the program representative – never the insured,

g. work must be approved and managed by the program representative prior to beginning,

h. new assignments are given to those who best meet the program representative’s measures – and one of their measures is the amount of “friction” you produce in your discussions with them,

i. the contractor must never accept the opportunity to do supplemental work requested by the property owner (outside the insurance claim itself), even when the property owner is fully willing to pay for this work themselves.

j. The contractor must agree to never refuse work from the referral program while accepting work from another source.

You clearly have many limitations in how this project can be executed due to the terms of this contractual agreement. You arrive at the prospect’s home, and they wish to enter into a contract with you to do the work. But you are in a paid, contractual agreement with how the work will be done on their property. Do you disclose the terms of this agreement that will affect how this work will be performed on their property due to what might be perceived as a conflict of interest? How should a conscientious contractor manage this ethically challenging scenario?

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