Two new service associations have emerged in response to complaints about existing groups’ insurance plans and membership requirements.
The California Pool Association formed in March and the Swimming Pool Pro Alliance in spring of last year. Both use the same marketing hook: individual insurance policies without the monthly meetings and sick route coverage required by traditional service organizations.
Directors of the new groups say they’re filling a need among service professionals who simply want to be covered without having to engage in chapter activities. But officials of older organizations object to how the new groups market themselves, saying they are little more than insurance programs masquerading as associations.
The search for insurance alternatives inspired formation of the new groups. The California Pool Association came to be when a chapter of the 45-year-old United Pool Association was dissatisfied with its general liability insurance, which involved a single policy that was shared among the members, rather than individual policies. That chapter left UPA and formed a new group under Inszone, an insurance provider specializing in contractors.
The Rancho Cordova-based CPA currently has about 20 members, each with individual limits. Fourteen belong to the chapter in the Inland Valley. The association hopes to establish more chapters, but members won’t be obligated to join them.
“We encourage that. We’re able to help create a chapter but certainly understand, too, that that’s not right for every business owner … so we offer it on an individual basis as well,” said Pat Grignon, an Inszone agent who is serving as CPA’s secretary.
The Swimming Pool Pro Alliance was begun by Program Director Danielle Bahr, who for nearly 10 years sold insurance for a well-known industry organization that she declined to identify. That group’s members also shared an aggregate policy, so if they filed more than $5 million in claims in a year, coverage would be exhausted. Bahr then struck out on her own to offer individual policies backed by A-rated carrier Navigators Insurance Group.
The Riverside County, Calif.-based SPPA began selling insurance in March 2014 and enrolls about 50 new members a month across the Sunbelt, Bahr reported.
SPPA and CPA also say they’re making it more affordable to add workers. This is attractive to larger firms looking for lower premiums to cover seasonal and part-time employees.
“I try to make the best business decision I can based on cost and return, and some of them are offering what I need at a cheaper rate and not making me pay for things that I don’t use,” said David Hawes, owner of H&H Pool Services in the San Francisco Bay Area.
Pool pros also have explored their options because of a recent decision by the Independent Pool & Spa Service Association, which determined it could not legally require members to be covered under its insurance provider. So it is that Hawes is insured through SPPA and retains his IPSSA membership.
Leaders of long-established organizations are keeping a close watch on the competition, but aren’t losing any sleep over it. They have strength in numbers to sustain the occasional blow and maintain long-lasting relationships with their providers, they said. Plus, chapters vote members in, which they said adds a safety mechanism: Prospects may be required to take a test to separate the pros from those who might be an insurance risk.
For UPA’s part, it is taking a cue from the new groups. Its president, Steve Homer, said it hopes to offer individual policies in the near future.
Beyond insurance, leaders of the new groups say they represent a disruption of the traditional association model. The old guard sees meetings as educational opportunities. The more knowledgeable their members, the less likely they are to make mistakes and file costly claims, the thinking goes. Some associations even leverage penalties when members miss a certain number of meetings a year.
But Bahr questions the value of these monthly sessions. “Our fast-paced life these days is not about meeting up and having a beer anymore,” she said.
Such activities define an industry organization, others said. “If they’re not requiring monthly meetings, in my view, how much of an association can they be?” said IPSSA President Todd Starner.
Bahr said some service professionals also object to a benefit that inspired formation of groups such as IPSSA. When they began, many service technicians joined for sick-route coverage in which members take over each others’ work when another is incapacitated by illness or injury. With the benefit, the entrepreneurs figured they needn’t worry about losing their businesses to catastrophic health conditions. Now, some techs have become resentful of this program, feeling it’s a burden to cover for laid-up colleagues, Bahr said.
“Old guys are blowing out their knees and are out for a couple of months,” she said. “Younger guys do not want to drive across town to clean their pools.”
That’s why SPPA’s coverage offers a less formal alternative that works more like a “buddy system.”
Starner acknowledges that the generational divide is creating “an interesting dilemma.” The sick route coverage is putting some burden on the 20- and 30-somethings. But it’s not as though IPSSA is hemorrhaging members over it. In fact, some chapters are growing, he said. More seasoned pool pros with families to feed want the security that their routes will be taken care of.
It’s a benefit that’s almost unheard of in any other industry, and IPSSA has no intention of making it optional.
“That’s the thing that separates us from everyone else,” Starner said.