If you've been socked with one of those astronomical insurance rate increases, chances are you've had to pass along some of the cost to your customers. But have you explained to them what you're doing, and why? If not, you may be missing an opportunity to do something about the liability insurance crisis.
So argues Al Burger, co-founder and chairman of the board of Miami-based "Bugs" Burger Bug Killers Inc. In March, his $30-million pestcontrol company had its annual insurance premiums raised by $720,000. That increase added 3% to the company's operating budget, more than it could handle by general belt-tightening. After cutting as many costs as possible, Burger began surcharging customers. Not only that, but he also wrote to all 13,000 of them, as well as to their trade associations and even to some of his competitors.
In his letters, Burger said than he was raising his fees to cover the cost of the insurance hike, and that he would eliminate the surcharge when insurance rates come down. He further urged his restaurant and hotel customers to pass along the increase to their customers, explaining why it was necessary and encouraging them to complain to legislators and insurance commissioners. He even spent $40,000 designing small, cardboard "tents" for restaurant tables, complete with test and graphics.
The goal, of course, is to generate public pressure on officials to take action that will ease the crisis. He reports that 20% of his commercial customers have objected to the campaign, not to mention the increase in his fees. But even the most irate of his customers understands why he raised them.