Money is on the Table Waiting for Contractors to Collect
Snow Removal Contractors should get certified in ISO 9000 because it could mean saving thousands of dollars every year. Do I have your attention? I admit, I was skeptical of this movement convincing contractors to go get ISO (pronounced Eye-So) certified. My background started in manufacturing, serving in ISO certified manufacturing plants for both General Electric and SPX Corp. I can even attest authoring my fair share of ISO documents.
Now, slowly over the last couple of years, we have been hearing a call for snow removal contractors to get ISO certified. At first I thought it was overkill, until I learned the impact it can have on your bottom line.
What is ISO Certification Anyway?
Simply put, ISO certification is having an outside company inspect your Quality Management System to ensure it meets the current ISO standards for our industry. If you were wondering, a Quality Management System (QMS) is the system (including tools, training, people, etc.) you use to ensure you get the quality desired (by both you and your clients). In a simplistic way, a typical ISO QMS system has three components.
- Clear documentation about your system to ensure expected quality
- A working system where you do what you said you are going to do in #1
- A feedback component to improve the system in case:
- Bad quality is found
- Client expectations of quality have changed
- A new quality opportunity has been identified
Now if you are like me, you may be thinking, “Hey, we document our process, we work the process, and if the process breaks, I fix the process, how can this ISO thingy save me money and how much money anyway?” Well, I am glad you asked.
What ISO does for You Beyond What You are doing Now
At this point I turned to Kevin Gilbride at ASCA for some facts since he is helping spearhead this movement. Kevin told me that early adopters are seeing a 20-30% reduction in their insurance rates for the snow and ice removal side of their business. Considering that insurance rates for snow removal are typically 2-3 times larger than the landscaping side of the business, that is a huge deal.
Then what about the documentation? Do we have to throw all of our old documentation out? That is the beauty of it, your current documentation has most contractors in a good place to get certified initially. Gilbride shared, “Most people are 80-90% complete on their documentation already.” It turns out, the cost to become ISO certified is drastically cut down for companies that have documentation and a system to follow that documentation.
So if you already have the documentation and the system, why the insurance savings?
Your ISO Certification Reduces Risk for Your Insurance Company
Here is the deal, if there is a slip and fall event, and you have documentation, that documentation may still get ignored as evidence if the lawyer can create doubt about your documentation’s accuracy. When it is your word versus an “innocent victim” the courts often favor the victim.
Gilbride shared with me the industry average is about 1/3 of slip and fall lawsuits are dismissed because of good documentation. A full 50% of lawsuits are considered not defendable because of inadequate documentation. The lawsuits that reach settlement have an average payout of about $15,000.
When an independent company audits your system in relationship to the ISO standards, the tables are completely turned. About 70% of slip and fall lawsuits are thrown out when it happened on a property cleared under a certified ISO QMS. It gets better. The average claim is only about $5,000. My simplistic mind says your insurance company reduced their dollar risk by about 85% when you are ISO certified. They save money so you save money.
What to Expect with ISO Certification
Expect ISO certification to take several months (hint: start as soon as the snow stops flying) just because it takes a bit to update the required documentation and train all of the people. Getting up to snuff the first time will cost more money than future years as well. Definitely get help with a certifying agency on the front end and an agency who has already certified a snow removal contractor, like Smithers Quality Assessments, is even better (no affiliation, we just know they have experience with certifying contractors).
Getting the documentation together and getting your QMS up to speed the first time is by far the hardest. During that first year of certification you will likely find more adjustments than you thought are needed to your QMS, but then year over year it gets easier to maintain and the cost of staying certified should drop after the first year as well.
ISO Certification Does More than Reduce Insurance Premiums
ISO Certification is becoming familiar language among manufacturers and health care facilities as well as in many other industries and those that are ISO certified themselves value suppliers whom are ISO certified. If you are ISO Certified, you are at an advantage with your clients. Sneller Snow Systems clients’ were glad to find their exposure to lawsuits was decreased and the clients are assured the documentation is in place should a lawsuit arrive. Clients with less risk make for happy clients.
Highlighting your certification can also help win and keep those zero-tolerance contracts because you can prove you have a quality system in place to meet client needs. When you add that to the decreased exposure to lawsuits, many clients are delighted.
With the trend to pass snow removal contractor limited liability laws in our country, ISO certification will also likely became a requirement for future contracts with large clients whom will be looking to keep their own insurance costs down.
When you implement ISO you should also expect less costs due to poor quality since the whole point of ISO is to engineer quality into your process. Less rework, less bad costs, happier clients, happier contractors. You can look at a full list of ISO certification benefits here. In the end, it looks like there is only opportunity for you in getting ISO Certified.
Be sure to hop on over to our Facebook Page and add to the conversation about ISO Certification.
This article is by Staff Reporter Jeff Serafin who has been following the industry since 2006.
We would like to thank Kevin Gilbride at ASCA for providing the financial and lawsuit data for this article. You can see a list of these stats and some of the companies who have received accreditation at this link: http://www.ascaonline.org/asca-iso-insurance.aspx#.V_1kX-ArJaQ
Updated June 2017 to ensure accuracy.