How do I check a restoration company’s relationship with insurance adjusters?
Ask which adjusters and insurers send the work, how that work is assigned, and whether the relationships belong to the company or to the owner personally. Check job files, payment history and any disputes, then speak with a few referral sources if the seller allows.
Begin with the job files. Ask for a breakdown of jobs by source: which insurers, which adjusters, which repeat referrers. A pattern where a handful of names account for most of the work tells you where the dependency sits. Compare it with the invoices, since work sent is not the same as work paid for.
Then ask how the relationships work in practice. Is the company on an approved or preferred list, and is that tied to the firm or to a named person? Are there complaints, scope disputes or reduced payments in the file? Ask how estimates are reviewed and how long adjusters take to approve them. Slow approval can tie up cash.
If the seller agrees, and after confidentiality is in place, ask to speak with a few referral contacts. Listen for whether they name the owner or the company, and whether they would keep sending work after a sale. Ask the seller about a transition period for introductions. Your accountant can help you read the receivables. Be cautious about relationships that rest on one friendly adjuster, since people change roles. Ask how the firm earned its place and how it would keep it, and note whether the answers are specific.
Key takeaways
- Sort the jobs by referral source to see where the dependence is.
- Find out whether adjuster relationships belong to the firm or the owner.
- Review payment delays and disputes in the files.
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Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 02Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
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