Ep. 607 A Strategic Approach for Insuring HVAC and Plumbing Contractors in California Requires an Industry Specialist

Rancho Mesa's Alyssa Burley and Account Executive Matt Gorham discuss a strategic approach for insurance HVAC and plumbing contractors in California.

Show Notes: ⁠⁠⁠Subscribe to Rancho Mesa's Newsletter⁠⁠⁠

Host: ⁠⁠⁠⁠Alyssa Burley

Guest: ⁠⁠⁠Matt Gorham⁠⁠

Producer/Editor: Megan Lockhart

Music: "Home" by JHS Pedals, “Breaking News Intro” by nem0production

© Copyright 2026. Rancho Mesa Insurance Services, Inc. All rights reserved.

Transcript

Alyssa Burley: You're listening to Rancho Mesa StudioOne™ Podcast, where each week we break down complex insurance and safety topics to help your business thrive. I'm your host, Alyssa Burley, and I'm joined by Matt Gorham, Account Executive with Rancho Mesa. He specializes in risk management for plumbers and HVAC contractors. And we're going to discuss a strategic approach to insuring HVAC and plumbing contractors in California.

Matt, welcome to the show.

Matt Gorham: Thanks, Alyssa. Always great to be here.

AB: Now, you recently wrote an article where you encourage HVAC and plumbing contractors to work with a broker who specializes in their industry. What are the key differences between using a specialist versus a generalist in today's challenging insurance market?

MG: That's a great question, and there are a lot of different ways to answer this. Specialization leads to a depth of understanding that generalization simply can't match. Outside of insurance, I think of my own recent experience where I had knee surgery last year and I didn't go to a general practitioner or my son's pediatrician. I went to an orthopedic surgeon that specifically focuses on knees and shoulders. And I see that we do benefit by applying that same logic into insurance, as we're seeing in so many other areas as well. And I think when it does come to insurance, there's a level of credibility with underwriters that goes beyond the basics of class codes or payrolls or claim dollars. And I think it elevates the conversation to create leverage in renewal negotiations. By focusing on specific trades, there's a stronger evidence-based understanding of what risks are really present, how carriers are currently aligned with those trades, and how to favorably present information and advocate for clients.

And this translates to, I'd say, the structure of an insurance program, the pricing of that program, knowing how and when to strategically engage appropriate carriers at renewal, and proactive risk management. And as you mentioned, especially in the current insurance market, as we're seeing premiums rise and increasing underwriting scrutiny, carriers are making active risk selection decisions; who do they work with rather than simply processing renewal transactions. The better a carrier understands who they're working with and how they manage risk, the better the renewal outcome for the contractor. And specialists are best positioned to help illuminate the specific characteristics of their clients.

AB: Okay, so you're really looking for somebody who understands the industry and is knowledgeable and has specialized in that. So why does a carrier's understanding of a contractor's specific operations and risk controls play such a critical role in renewing their insurance?

MG: Well, fundamentally, insurance is the practice of transferring risk, right? Carriers have their preferences on which industries, and more specifically, which companies within those industries they want to invest their resources into. The underwriters that are making these risk evaluation decisions on behalf of the carriers are often working with very limited information. They'll get loss runs, accords, maybe a supplemental, and a company's website. And if they're really lucky, they'll get to have a risk control report and possibly a conversation with the broker. So they're often relying on assumptions and perceptions to fill in their gap in knowledge. In the absence of reliable information, these assumptions and perceptions can over-exaggerate the risk that a contractor presents, which oftentimes leads to underwriters declining to quote or to overprice their quotes.

Similarly, we've recently started working with a few clients whose carriers had non-renewed them after discovering that certain aspects of their operations were outside of those carriers' appetite, which understandably caused some concern for them at the time they found out. When an underwriter understands the specific risk exposure they're accepting from a contractor, they can more easily justify pricing that deviates from generic pricing models. And even beyond that when the underwriter sees that the contractor understands their own risk exposures and demonstrates a commitment to proactively mitigating those risks and aligning with a broker that truly partners with them then that underwriter can be more confident in aggressively pricing their renewal terms.

AB: Okay, so the broker, since they really understand the industry, they can create a narrative about the client and what the actual risks are and not let the underwriter assume that they understand.

All right. So what advantages do HVAC and plumbing contractors gain by working with an insurance broker who specializes in mechanical trades, particularly when it comes to risk management and avoiding coverage gaps?

MG: That's another great question. In terms of risk management and coverage gaps, there are two areas that come to mind. Integrating risk management strategies into operations and designing an insurance program that's really tailored to the specific needs of an HVAC or plumbing contractor. Both of these really start with understanding the types of claims and the risk that are most common within each of these trades, as well as their underlying causes and the potential claim implications. As an example, water intrusion claims are prevalent in both HVAC and plumbing, but there are a lot of different causes that lead to these claims. It could be soldering work that sets off a fire sprinkler, which is much different than a condensate line backing up but they can look the same on a loss run report.

Having a more detailed discussion on what these claims are and how they've happened with a specialist can lead to, say, actionable ideas or controls that actually address the underlying cause rather than simply accepting or overlooking them as generic water intrusion claims. By knowing typical operations and common types of claims and their causes, a specialist broker can also help their clients to avoid problematic coverage exclusions or limitations, right, in tailoring what their insurance program looks like. So these same water intrusion claims that I mentioned can easily lead to mold claims, which are typically excluded from coverage in standard GL policies. And yet we often see plumbing and HVAC contractors without appropriate coverage in place to respond.

And on a similar note, kind of a coverage gap, which I thought was really interesting, wanted to share that we saw recently was a two-story height exclusion for a commercial HVAC contractor that routinely performs rooftop work for clients in four-, five-, and six-story buildings. So really hoping that doesn't come back to bite them. So I'd say a specialist broker can help to create an insurance program that's designed to meet the specific needs of these trades. And again, building in or integrating controls into the operations that help to mitigate the chance of them happening.

AB: Yeah, so being a specialist broker, it really gives you the experience to offer your clients advice on what they should make sure is covered, right? And oftentimes if you're a generalist, you may have had an HVAC or plumbing client in the past. Maybe they've experienced some of this. Maybe they haven't. So the fact that you're specifically working with this group of contractors, you really know their industry and you've kind of seen it all.

MG: Yeah, I appreciate the way you said that. It's about repetition and, you know, it's allowed expertise to develop from that.

AB: Matt, if listeners have questions about developing a strategy for their insurance renewal, what's the best way to get in touch with you?

MG: The best way to reach me is either by phone, (619) 486-6554, or email mgorham@ranchomesa.com.

AB: All right. Well, Matt, thank you for joining me in StudioOne.

MG: Yeah. As always, thanks for having me.

AB: Thanks for tuning into our latest episode produced by StudioOne. If you enjoyed what you heard, please share this episode and subscribe. For more insights like this, visit us at RanchoMesa.com and subscribe to our weekly newsletter.