Join Colorado Marketing Representative, Peter Constas, and Commercial Lines Managing Underwriter, Debbie Chieffo, as they discuss general contractors, the best way to fill out an application, and Debbie's insurance story.
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Peter: Good morning everyone. I hope you're having a wonderful Wednesday. My name is Peter Constas and I'm the marketing representative for Chris Leef General Agency here in the Colorado area. And this is making good amazing. I'm joined today with Debbie Chieffo department manager and Underwriting Superstar here in the Westminster office, and we are here to talk about general contractors. How are you doing today, Debbie?
Debbie: Great, Peter. How are you today?
Peter: Oh, I'm doing great. Another, another day in Insurance Paradise, as they say. So we're here to talk about general contractors. Now, this is like my third month here at Chris Leef so this is just, you know, I'm stepping into the insurance industry for the first time, and I'm wondering what even is a general contractor.
Debbie: All right, Well, with contractors, different people name them, different things. But in a nutshell, a general contractor is a contractor who subcontracts out most of their work.
Debbie: They may have some employees, but most of their work is done by subcontractors.
Peter: Okay. So there are different types of contractors. What are they?
Debbie: Well, the most basic one is the artisan contractor.
Debbie: Those are the contractors that do one or two different operations. So a drywall contractor, all they do is drywall.
Peter: Oh, okay. Okay.
Debbie: Painting contractors, carpentry contractors, get a little more, um, involved. There are remodeling contractors.
Debbie: That's the guy you call when you want to redo the family-room. They'll do a little painting, a little drywall, maybe a little electrical work to move around some lights, but not doing new construction.
Peter: Okay. So would a remodeling contractor still be considered an artisan contractor?
Debbie: For most carriers, yes.
Debbie: They're a one step above.
Peter: Why would a general contractor go through the E&S market, not the standard?
Debbie: If anybody's ever had any construction work done on their homes or in building a new homes, Lots of things can go wrong in contracting.
Debbie: Um, and when they go wrong, they usually go wrong. Bad . So most contractors, um, are written through the, uh, E&S market instead of the standard markets. The other reason they go through ENS is a lot of contractors, um, are just starting out.
Peter: Oh, okay. Okay.
Debbie: They may have worked for somebody for a few years and now they're going out on their own.
Debbie: So most standard markets don't like to write new ventures.
Peter: So Debbie, you're a wealth of knowledge. As you know, I'm very new to the insurance industry, and I was wondering what would you need to fill out the perfect application for a general contractor?
Debbie: First and foremost is to what type of contractor they are. Are they doing ground up construction, building a brand new house?
Debbie: Are they just the, what you call a paper contractor. Where they're gonna control and organize the construction project, but hire subcontractors to do all the work.
Debbie: Are they just a roofing contractor where they just do the roofs for new construction? So knowing what they do, whether they have employees or subcontractors, if they're doing residential or commercial work, or a little bit of both, but those are the information that we need. If they use subcontractors, do the subcontractors have their own insurance? . That's also a key to writing contractors.
Peter: So when you see agents filling out these applications, what are some of the most common mistakes that you see?
Debbie: Not putting the payroll down.
Peter: Mm, Okay.
Debbie: Um, or including the owner lumped in with the payroll for the employees. Uh, our carriers will cap owner payroll at a certain amount, so even if the owner is getting a hundred thousand dollars on the books, We usually cap that at anywhere between 20,000 and 31,500 in the state of Colorado.
Debbie: So we don't wanna have to charge them extra if we don't have to.
Peter: Speaking of that, um, what kind of carriers do we usually use for this kind of risk?
Debbie: Um, we have several different carriers that we, uh, can write contractors with, and when we get a submission in, we will usually go to those two or three markets because the carriers write them in different ways. Some of them will write based on payroll and subcontractors costs. Some of them will rate on gross receipts and factor in the payroll and sub costs in the rate, but not the actual premium uh, calculations.
Debbie: So we will go to all of our markets to find the best pricing and fit for the risk.
Peter: Perfect. Let's say an agent wants to submit an application for a general contractor, but let's say it's 5 35 and we just closed. Is there a way for them to get an instant quote?
Debbie: So we have several online raters through our Grove portal.
Debbie: Um, you can at least get an indication. For some on some of those carriers, you can also submit it in through our various email addresses, commercial info, send it directly to an underwriter. It will get, uh, routed to the correct person, and we will try to get the quotes out as quick as possible.
Peter: Let's say somebody sends me a submission, would that still reach you?
Debbie: Yes, it will because you have been trained well, , and you'll forward that to the appropriate, uh, submission email address, and it will get into our system and get into the hands of an underwriter.
Peter: Absolutely. Well, you heard it here first, folks. Uh, you can email me with anything and it'll make sure it gets to the right person. Well, thank you so much, Debbie, for taking the time to talk about general contractors a little bit when I'm going to see agents and agencies. Um, the biggest thing that I've come to learn is that not a lot of people choose insurance. It's more of insurance chooses you. So I'm a little curious about how did you get into insurance?
Debbie: After I graduated from school, um, I realized that I did not want to make use of my degree in elementary education, .
Peter: Fair enough.
Debbie: I worked a few jobs and I had a friend who was working at an agency who was a CSR and a part-time producer.
Debbie: She wanted to go to producing full-time, so needed to find a replacement. She asked if I wanted, was interested, so they hired me. I started out in personal lines for about two months, reviewing homeowner's policies. Really exciting there. At that point, um, my friend was ready to go to producing full-time, so they needed someone to handle the, uh, president of the agency's book of business.
Debbie: So it went from no experience to handling a 5 million book of,
Peter: oh my gosh,
Debbie: President of the agency. Um, got my license in about four months after a furious amount of studying
Peter: I bet.
Debbie: And been in insurance ever since. Did eight years on the retail agent side, and then moved over to underwriting and the surplus lines market. And, uh, I will have been at Chris Leaf. Uh, this week actually 17 years.
Peter: Wow. Really This week is your 17th year anniversary?
Debbie: Yes, it is.
Peter: Well, congratulations, Debbie. That's awesome. Well, Debbie, I know you have a really busy schedule, so I'll let you get back to it. And thank you listeners for listening. You can tune in every other Wednesday for another episode. May the commission be high and the hard times pass you by. See you in a couple weeks, folks!