As an Independent Contractor, you are often asked to provide coverage and or indemnity beyond that which is normally provided in any policy of insurance. In addition the RSIG policy speaks for itself as to actual coverage provided.
When reviewing a contract you should consider all of the terms very carefully because in many cases it includes costs or requirements that will not be covered by insurance.
Two contract terms that you should pay particular close attention to in the new Chase contract are:
Section 3 Services, (h) Storage, (2)
“At its sole cost and expense, Supplier will repair any damage to any Vehicle, including replacement of lost or damaged parts, which occurs while in the custody or control of Supplier, its agents, or employees. This includes satisfying the balance of the Account, or fair market value of the Vehicle, whichever is greater, if the Vehicle is stolen or deemed a total loss while in the custody of Supplier.”
RSIG or all other current insurers of repossessors provide coverage for actual cash value (ACV). Under this term in Chase’s contract if the payoff on the loan is greater than the (ACV) you will be contractually obligated to pay the difference. This difference can be substantial. One case that we know of under such a clause cost the repossessor in excess of $10,000. This clause places you in the position of guaranteeing Chase’s debtor’s deficiency.
And Section 4.3 Prices and Rates, (c) Most Favored Customer.
“If Supplier offers more favorable pricing to any other similarly situated customer than are offered to JPMC under any Schedule, then Supplier will concurrently extend that pricing to JPMC, and this Agreement and/or any Schedule, at JPMC’s option, will be deemed amended to provide that pricing to JPMC.”
Basically this provision requires you to give Chase the lowest price you are currently charging any of your other clients.
For example, if Chase agrees to pay you $375 a repo but you are currently working for a forwarder who is paying $275, this contractual term would reduce the amount you can charge Chase by $100.
And Chase can come to your office to check if you are giving anyone a lower price.
“In addition to JPMC’s other audit rights under this Agreement, JPMC will have the right to audit Supplier’s records with respect to compliance with this Most Favored Customer provision.”
And make you pay the difference if you have worked for less than you are charging Chase.
“Any amounts charged to JPMC in excess of prices offered by Supplier to any other similarly situated customer for goods and services will promptly be refunded or credited to JPMC by Supplier at JPMC’s option.”
And if you refuse to pay back the difference in “excess of price” you are subject to being sued by Chase to recover this amount. This type of litigation would not be covered by your insurance.
Edward Marcum
Chief Executive Officer
Recovery Specialist Insurance Group
9379 Forestwood Lane
Manassas VA 20110
800-997-7224
“The Bitterness of Poor Quality
Remains Long After the
Sweetness of
Low Price is
Forgotten”
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