4 Cs of Insurance Purchasing

Use these tips to ensure your company is safeguarded against the risks of your work.

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4 Cs of Insurance Purchasing

When I speak with cleaning and restoration professionals one of the first questions I ask is, “What do you dislike most about insurance?” It’s a loaded question, but it really does help me figure out what you value about insurance and what I can do to fulfill that.

Most people respond that their insurance agents don’t know what they do for a living. Restoration contractors especially say they must explain to their insurance agents — every renewal — that they are neither janitors nor carpet cleaners in order to have that taken off their liability policies. Does this sound familiar to you?

The next question I ask is, “What do you like the most about insurance?” The response I generally receive is that they like how it is an extra level of protection for their businesses. This is certainly accurate. The overall function of insurance is to provide the insured with financial assurance for the liabilities they take on and to be there when something catastrophic happens to help avoid bankruptcy or closing your business.

In my day-to-day work, I often hear that insurance costs too much. This could be true as well. Insurance is transferring the risks you take on to someone else in exchange for a premium. The premium charged should be minimal to the overall risk you take on.

Let’s say you are doing a Category 3 water job at a large commercial building valued at $15 million. If the job were to go wrong, what is the worst that could happen? Say you burn the building down, causing $15 million in damages; meanwhile, your annual liability premiums are $20,000. In this case, $20,000 is relatively minimal to the $15million dollars of risk you took on.

In this article, I will help solve the challenge of saving premium dollars while maintaining adequate insurance for your business. The simple way to do this is to follow the “four Cs of insurance purchasing,” which you should follow when looking over your insurance program. Three of the Cs affect you 365 days out of the year. One C will affect you only one day out of the year. Can you guess which C that is?

Kari Dybdahl : Kari@armr.net

“Insurance purchasing should not be stressful for you as the insurance buyer. If you feel like something is off with your insurance, it probably is. Ignoring the problem won’t fix it.”


What ‘Your Work’ Means for a Restoration Contractor

As a restoration professional, you would think your commercial insurance policy would cover damage to the work you do and mistakes that might happen. That might not be the case.


By Kari Dybdahl

In the last “Kari’s Korner,” I wrote about what “your work” means for a carpet cleaner regarding insurance.

This month I am going to carry that same topic on to a restoration contractor. Many may be thinking “your work” would be the same for all trade contractors. However, when operations involve regulating the relative humidity within a structure, we in the insurance industry look at “your work” on a more macro scale than the one thing you were called to a job to work on.

Although the way we look at “your work” as a restoration contractor is a bit different from how we look at a carpet cleaner, the core concept remains the same. In general, “your work” is the thing you were called to work on. As a carpet cleaner “your work” is the carpet you were called to clean.

What would “your work” as a water extraction or restoration contractor dispatched to a flooded home be in the eyes of an insurance company? Well, “your work” is the thing you were called in to work on, which is bringing down the relative humidity in that entire home. One would say the whole home is “your work”!

The “your work” exclusions on your General Liability policy and Contractors Environmental Liability policy exclude coverage for property damage to “your work” arising out of your operations. In the case of a restoration contractor at a water-damaged home, “your work” applies to the entire home; in theory, you have no coverage for any damage to that home caused by your operations.

Imagine one of your dehumidifiers short-circuits and starts a fire, burning down the entire home. We would expect the “your work” exclusion to trigger, because the property damage to the home from the fire resulted from your operations. It would exclude coverage for the whole loss because “your work” was the entire home. Therefore, “your work” exclusions are especially deadly for restoration contractors.

The good news is solutions exist to fix this immense gap in coverage. There are wholesale insurance brokers specializing in your industry that can help.


Claim Frequency Kills | Part 2

How a few insurance claims can make your restoration company uninsurable.

Claim Frequency Kills | Part 2

How a few insurance claims can make your restoration company uninsurable.

Last month, we talked about the issue with claims frequency. However, I don’t want any of this information to scare you away from making a claim when you need to. In this article, you’ll find a list of situations that should always be reported as a claim. This is by no means an exhaustive list or a rulebook on what to report and what not to report. You should always reference your specific policy documents for conditions, duties, and requirements imposed on you as a policyholder and it’s a good idea to chat with your insurance agent on what to do. If you selected your insurance agent solely based on the cheapest coverage available in the marketplace, I would get an opinion from someone else on when to submit a claim under your insurance policies.

Read The Full Article HERE

By: David Dybdahl


Navigating the Complex World of Insurance

With custom-designed insurance policies, many of the cleaning and restoration industry’s insurance woes can be resolved.




Let’s transport together back to 2003 when a court ordered Farmers Insurance to pay Melinda Ballard $32 million for a small water damage claim gone bad that resulted in toxic mold growth in her home.

Although the payout was eventually reduced to just over $4 million, the point still got across to insurance companies throughout the industry. Ballard is the number one person insurance companies love to hate. A 2003 article by The Austin Chronicle stated insurance companies use the Ballard case as ammunition against the fight of frivolous lawsuits.

What is particularly interesting about the Ballard case from the viewpoint of an insurance professional is that the claim originated from a small water damage loss. Due to the lack of urgency from the claims department, the small water leak turned into extensive mold growth. Instead of getting the water out as soon as possible, the claims adjuster wanted to investigate the loss, which took two months. Within those two months, the loss worsened and resulted in detrimental bodily injury to family members as well as an uninhabitable home.

A claim similar to the Ballard case could happen to any restoration contractor no matter the size of the firm or the job.


Have you ever wondered why you are rated as a carpet cleaner on the declarations page of your commercial general liability policy even after you have told your insurance agent most your revenue is from water damage restoration?

By: Kari Dybdahl



Claim: Frequency Kills: Part 1

How a few insurance claims can make your firm uninsurable

By: David Dybdahl | July 2018

When should you report a claim?

Here are little known facts in insurance:

What does this boil down to? Insurance Is Important! You need it to run your business as well as protect it!  With out it, you will be unable to get a majority of jobs and leave yourcompany open to loss that could bankrupt it! 

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Insurance Is Important! You need it to run your business as well as protect it!

The Sudden and Accidental pollution coverage myth

Sudden and accidental pollution coverage and Greek gods are both myths. People gave up on believing the Greek gods would do them any good more than a thousand years ago. However, due to the crafty work of insurance marketing spin doctors, the sudden and accidental coverage myth in general liability insurance policies persists in the US insurance business.


By: David Dybdahl

Pollution exclusions have been the cause of more litigated insurance coverage disputes than any set of words in the history of insurance. The words “sudden” and “accidental” are at the root of many of these coverage disputes.

Looking at the insurance marketing slang used to describe pollution exclusions, it is not surprising that there is so much insurance coverage litigation over denied pollution-related claims. Insurance coverage litigation is created when insurance buyers think they are covered for a loss that the insurance company thinks is excluded. It turns out that insurance sellers and buyers and their lawyers often have some very different ideas about what sudden and accidental pollution might mean.

Sudden and Accidental Pollution Coverage

Representing a “pollution exclusion” as “pollution coverage” is a great way to create coverage litigation. It is still common to hear in the insurance brokerage community that “this policy has sudden and accidental pollution coverage.”

Much of the new insurance coverage litigation over pollution exclusions in property and liability insurance policies could be avoided if the insurance marketing spin doctors could be reined in from developing feel-good words to disguise the effects of pollution exclusions. Sudden and accidental pollution “coverage” has as its foundation an exclusion in the comprehensive general liability insurance policy that has not been used for over 30 years. In my opinion, the use of the words “sudden and accidental pollution coverage” on new insurance policies should go the way of Greek myths; both make interesting reads, but neither is based on facts.



Private Risk Financing for Environmental


Expert Insight Panel:
April 19, 2018 1:30 pm

Bloomberg Environment


Brad Maurer
J.D., CPCU, American Risk Management Resources Network,
Philadelphia, PA

Brownfield Initiative Programs have three common elements:

  • Statutory liability relief for successfulremediation,
  • Use of voluntary cleanup programs and expedited governmental approvals for
    remedial actions to shorten remediation periods, and
  • Funding to identify brownfield sites and bridge the financing gap between cleanup costs and property market value.


Superfund Site Redevelopment: A Brownfield Approach to Financing Environmental Remediation Costs for Site Reuse

The Environmental Protection Agency, through its Superfund Task Force, has indicated that the agency will be focusing on streamlining and expediting cleanup and reuse of contaminated sites, with a major emphasis on involving private parties and encouraging private investment.
This session will explore the costs and benefits of several private risk funding approaches for site cleanups, such as: litigating old general liability insurance policies, purchasing pollution legal liability and cost cap insurance, and
incorporating environmental liability transfer and guaranteed fixed priced remediation strategies at sites. The session will provide an overview of common terms and conditions associated with the various options, the market
and providers for each of these options, and their potential role in transactions through real-life case studies.

Download The Article HERE


Insuring Farmers for Environmental Damage Claims

Environmental impairment loss exposures are inherent in the operation of a farm, and these loss exposures cannot be avoided in the business of farming. Recent court rulings have shown that farmers face pollution-related loss exposures, most notably from drinking water supply contamination and odors. On top of that, farm package insurance programs commonly sold to farmers do not provide any effective coverage for claims arising from gradual contamination of soil and water or from odors.

Insuring Farmers for Environmental Damage Claims

Increasing Litigation

Across the country, lawsuits are increasing along with the growing size of farming operations. The alleged damages being sought by the plaintiffs in some of these lawsuits are in amounts never seen in the agricultural economy.

In a recent example of surprising environmental damage claims being made in farming country, the city of Des Moines, Iowa, sued the County Board of Supervisors in three counties northwest of the city for over $180 million. The city did so to recover its anticipated costs to construct and operate a new water treatment plant needed to treat the drinking water supply serving over 600,000 residents. The cost to build and operate the water treatment plant was estimated to be as high as $183,500,000.

Read More HERE

“the good news is that specialized environmental impairment insurance for farms is available through thousands of insurance agents and brokers across the nation..”

By: David Dybdahl

Coauthor Aaron Millonzi


6 Things to Know to Get Paid for Sewage Claims

By: David Dybdahl

A continuing conversation on getting paid, working with mortgage companies, and insurance dilemmas.

This is the third in a series of articles on how to get paid for insured restoration work. The first two articles focused on accelerating payments from insurance companies and from banks holding two party checks in escrow, mostly in homeowners insurance claims.

This article focuses on getting paid for water losses on commercial property. The writing is on the wall; it will become increasingly difficult to be fully paid for jobs involving a speck of mold/bacteria or Category 3 water in the future, if the property is not insured under a specially designed Environmental Impairment Liability (EIL) insurance policy. Restoration firms providing Emergency Response Plans to the commercial property owners and management firms in their area can cut the costs of this needed insurance by half.

Changes in claims payment practices combined with universal exclusions for restoration work involving fungi/mold/bacteria have created the situation where 99% of all commercial property owners are severely underinsured for any loss involving a speck of any type of mold or bacteria in any sequence in the job. Being underinsured creates problems in getting paid when a property owner is dependent upon insurance to pay for a loss.

The good news for remediators is 99% of claims adjusters do not know how to pay for claims when there is a sublimit on the policy for mold or bacteria-related losses. The result is uncovered claims for losses involving a speck of mold or bacteria have been routinely paid for the last 12 years. However, things are changing fast in the claims business. Today, there is a much higher chance that a remediator will be left holding the bag with a bad debt for the work performed for underinsured property owner or manager.

Here are six factors to consider to assure payment for mold or bacteria related (Category 3) water jobs:



The need for the industry to embrace environmental insurance

He started from the bottom and now he’s making history.

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He started from the bottom and now he’s making history.

Sixty-three-year-old David Dybdahl was one of the few professionals who studied and mastered the craft of insurance in college – in fact, he finished his BBA with a degree in risk management insurance at the University of Wisconsin-Madison. While he says he was not the brightest student in college, Dybdahl has certainly made a significant mark in the industry, particularly in the environmental insurance segment.

Dybdahl is the president of American Risk Management Resources Network (ARMR), a specialty insurance brokerage firm offering customized insurance products in the United States and Canada. Over the past three decades, he was able to work on the placement of thousands of environmental insurance policies both as the placing broker and as the global environmental practice leader.

Dybdahl served the US Environmental Protection Agency’s Contractor Indemnification Technical Review Panel in 1986, providing the panel with technical information on environmental insurance issues for the United States Department of Defense and Department of Energy.

He also once took the helm of the Environmental Task Force of the National Association of Insurance Brokers and, in 1999, he founded the Society of Environmental Insurance Professionals, an organization advocating for the enhancement of environmental insurance’s utilization as a risk management tool.

Insurance Business had a brief conversation with Dybdahl to get to know his insights about the industry. In this profile piece, he shares the most challenging issue facing the environmental insurance industry. He also outlines his hopes for the industry for the years to come.