One Sunday morning, Sam, Magic Roofing's owner, received a call
he had always dreaded. He recognized the voice of Harvey Greene,
manager of the Ocean Hotel, which Magic Roofing was in the process
of reroofing. There had been a major rainstorm with high winds
Saturday night and into the early hours of Sunday morning, and
Harvey was calling to inform Sam of leaks in the roof that were
damaging multiple rooms on the hotel's upper floors. Sam told
Harvey he was on his way to the hotel.
Before leaving for the job site, Sam called Magic Roofing's
insurance company to report the possible claim. The insurance
company advised him to try to mitigate any damage and not to offer
reasons for damage, accept any blame or commit to any liability
until a thorough investigation had been completed.
After surveying the job site, Sam discovered the leaks were
caused by improperly sealed flashings that were on the roof before
Magic Roofing started the job—something his project manager
had overlooked during the pre-job planning stage. Other damage
included roof insulation that was stored on the roof and covered by
tarps that weren't secured tightly enough to withstand high
The next day, Sam met with Kevin, the insurance company's
risk-control representative. Kevin told him documented water damage
prevention procedures are critical to a roofing contractor's risk
management success and should be part of a company's culture. Kevin
went on to say all Sam's employees should be made aware of the
company's water damage prevention procedures and their personal
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