Quality Matters - 08/04/2008 (Plain Text Version)

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In this issue:
Leverage Your NHQ Certification with Insurers and Builder Clients
Streamlining
Survey Findings Reveal Changes in Builder Business Ops, Promotion, New Product Purchases
IAS Board of Directors Wowed by NAHB Research Center Facility
Shining Light on Latest in High-Tech Solar Panels
Quality Matters to Me
National Housing Quality Program Welcomes Newly-Certified Trades, Suppliers

Leverage Your NHQ Certification with Insurers and Builder Clients

The lull in the economy has required trade contractors to examine more closely what it is that will add to their bottom lines. Every contractor can certainly benefit from two things: a break in the rising cost of general liability insurance and more builder business.

General liability insurance for trade contractors has increasingly become more difficult to get and maintain. Helping insurers understand how your quality management system significantly decreases risk can mean lower insurance rates for your company. And, helping builders understand that contracting your services will cost them less in the long run, can mean more business.

Although having an NHQ Certified quality system in place doesn’t automatically guarantee lower insurance rates or increased builder business, having a fully documented system of quality assurance can certainly be a selling point. “You have to prove to builders and insurers that quality is your priority,” advises David Craig at Select Build in Las Vegas, Nev. “The only way to do that is to make sure that you have a good data documentation system in place. It’s also good to show that you have implemented a quality management educational system for your employees.”

Trade contractors have to be very specific when demonstrating to insurers that their quality system is working and their business is eligible for rates that are associated with lower risk. Performance measures that should be highlighted when striving for lower premiums and more builder business include demonstrated evidence of a decrease in call backs, customer services calls, warranty calls, and claims.

HBW Insurance Services (HBWIS) is a nationwide underwriter of general liability, excess liability, and builder’s risk coverage for general contractors. HBWIS has 10 years experience in the business and is a leading contractor insurer. “By the end of 2008, we’ll be offering discount rates to trade contractors who are NHQ Certified,” states James Leach, Executive Vice President of HBWIS. “The more we know and learn about a builder or trade contractor’s quality processes, the better job we can do on their pricing.”

Participation in third-party certification programs, such as the NAHB Research Center’s National Housing Quality (NHQ) Program, can help contractors present a persuasive argument for increased builder business and lower insurance rates. As outlined in the NHQ Certified Trade Contractor quality management system requirements, trade contractors can highlight the following elements of their quality system when presenting their case to insurers:

At least once a month, a random independent audit of at least one jobsite is conducted to verify the implementation and effectiveness of the quality system and safety program on the jobsite. All audits are documented and appropriate corrective actions are initiated when quality system non-conformances are found.
Training is conducted every month to focus on and eliminate at least one recurring issue as part of an ongoing continuous improvement effort.
Every job gets inspected by a trained/qualified inspector. The inspection process verifies the key checkpoints related to job-ready, in-process, and job-complete criteria. The inspection information is used to drive the continuous improvement process.
There is an annual process to gather and analyze feedback from builder customers to guide continuous improvement.
At least annually, senior managers review the operation and effectiveness of the quality system and safety program. This review includes the issues noted in the independent jobsite quality assurance system audits, customer feedback, complaints/call backs, and customer service. The annual review also includes ensuring compliance with these requirements, assessing quality performance statistics and trends, setting goals, and addressing needed changes to the system.
The company’s quality manual provides a documented reference to ensure consistent implementation of the quality system across the company and through organizational or personnel changes.
Procedures have been implemented for periodically updating the documents of the quality system to ensure they are current.
Appropriate records are maintained that will provide evidence that the processes and procedures of the quality system are being followed.

Under NHQ, the effectiveness of a quality management system is monitored with performance statistics that show performance and improvement trends. Companies should have a list of their performance statistics and show how they are improving over time. Most trades can show a significant reduction in call backs, code inspection failures, etc. Having real data for your company’s experience is essential to convincing your insurer that you are a lower risk company.

Trade contractors who don’t have a quality assurance system in place should consider participating in the NAHB Research Center’s NHQ program. “It’s important that insurers know that your company takes a proactive approach to quality, focused on doing it right the first time rather than inspecting and punching out,” according to Bob Hill, director of Laboratory and Certification Sciences at the NAHB Research Center. “And having your quality system audited and certified by a third party demonstrates a commitment to an effective quality system, just as outside financial audits are a commitment to proper accounting.”

For additional information on the NHQ Program, visit www.nahbrc.org/quality. For more information on HBW Insurance Services and their discounted general liability insurance to builders and trade contractors who meet specific criteria, contact James Leach at (678) 742-6335.