We do quite a bit of emergency storm related work in the spring and summer and have started to run into issues collecting payment. Most clients pay in a timely fashion but there are always a couple who drag their feet or ghost us altogether.
We don't typically bill insurance. We let the client forward the invoice to their insurance company. We have gotten pretty good at writing proposals that are itemized for insurance purposes.
Would it be better for us to just collect insurance info upfront and bill the insurance company ourselves? What would we want to be prepared for?
Thanks!
Some bill insurance directly. You might get more, or you might run into the same issue with insurance companies ripping you off.
If it's under the dollar limit, and your state allows it, I'd sue in small claims court (some states restrict businesses suing in small claims court and make them sue in commercial small claims court, or perhaps even in regular county court. Then, if they refuse to pay the judgement, you can file the judgement with the county, and then execute the judgement with a county sheriff, doing a forced sale (not just a lien, but a forced sale) of their house, or car, or other assets, including in most cases a writ of execution against a bank account (probably your best option), or an order of garnishment of wages from their employer. The main issue is you can't have writs of execution against social security/pension derived income, so keep that in mind if you are dealing with retired people. In that case, it's better to execute a judgement against a car or house and do a forced sale/auction of that.
The same procedure applies to both small claims, and county/state court of executing on the judgement, but you'll have to pay the sheriff fee (this can be added to the judgement) if you need the sheriff to seize and auction off assets.
I'd use clearly written contracts, with an attorney's fees provision if payment isn't rendered. For pricing in the contract, it preferably has a fixed price. If not that, then use something with a easy-to-calculate formula, such as a man hour or equipment hour rate, times the number of guys or pieces of equipment on the job for the number of hours they are on the job. The second option isn't as good as fixed price. If you have a clearly written contract, in some states, if they don't show up to court, you can file for a default judgement with the county clerk, without really having to argue your case, and they move to executing the judgement if they don't pay that. If it's anything too complicated, get a lawyer (additionally, many states prohibit an LLC owner or corporation owner from representing his business without a lawyer, as they call it practicing law without a license, a very unfair law in my opinion.)
Hope this info helps. I'd book a free consult with a business/contract law attorney in your area.
