Smart and wealthy building contractors are the ones who associate with winners in their specialties, for good reason. They've come to realize they will never live long enough to learn all they need to know by themselves. They see the value of sharing information and comparing notes. They skip long, expensive learning curves suffered by the do-it-yourselfer's. As a result, they get smart much faster, and avoid making costly mistakes that happen using only trial and error.

For example, consider commercial liability insurance for general contractors. Buyers are isolated, and the insurance industry likes it that way. It is nice and complicated, and there are plenty of ways to spread fear, to keep contractors from doing much about it. Your job as a buyer is to stop asking questions, and pay the premiums. Isolated contractors try to ask intelligent questions, but they have no benchmark idea of what the best deals look like. They have very limited power.

I happen to know that rates are all over the map for contractors. General contractors focused on residential remodeling are a good example. I've seen premium rates range from 0.7% of sales to over 3%. As I collect more and more examples, I finally start to see into the murky marketplace. Turn on the lights, and it is easy to see what to demand.

Contractors are reluctant to show their insurance policies to their competitors for good reason. They don't want to show their numbers for sales and payroll for one thing. Also, they are not all that confident they have to best deals, and don't want to feel dumb. Every time I've seen contractors pull out their policies and compare them, there are always a good percentage wondering how the best deal on the table came to be that way. 80% of them discover they've been overpaying large sums of money.

What if every contractor in California where to regularly submit their results with the insurance industry into an ongoing survey, in exchange for access to the collective intelligence? We've been informally running such a survey for the past several years. If you'd be interested in participating, send me an email at my address below.