Ask the Expert: Can a Repairer Be Responsible for Part Failure?
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Can a Repairer Be Responsible for Part Failure?

Using any parts that are not properly tested for proven performance may expose you and your company to substantial liability, similar to a doctor or pharmacist who recommends or prescribes and/or dispenses potentially harmful and/or lethal medication.

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Barrett has authored numerous industry trade journal/magazine articles, including several cover stories for BodyShop Business. Having grown up in a family-owned collision repair business and owner/operator of two successful collision repair facilities, his ongoing efforts as industry speaker and repairer coach-consultant are geared toward educating professionals and consumers to achieve equally successful resolutions to automotive-related property damage issues. Such issues include proper and thorough repair, reasonable repair profitability for repairers as well as equitable claim settlements for both claimants and the responsible/paying parties. ADE offers numerous professional services nationwide.

Your question brings up some important issues that every shop owner/manager should be aware of.

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Actually, a repairer can be held responsible for all facets of a repair just as any other professional may be responsible for their failure to meet their professional responsibilities and/or properly perform their duties to best safeguard their customers’ interests.

Using any parts that are not properly tested for proven performance may expose you and your company to substantial liability, just as a doctor or pharmacist who recommends or prescribes and/or dispenses potentially harmful and/or lethal medication or combinations of such.

Professional Duty

The repairer has a professional duty as well as a moral, ethical and legal duty to provide a level of service that does not place the customer in harm’s way. Repairers accept and assume a position of public trust in being professionals in a field of expertise of which the average consumer has little or no knowledge and/or experience.

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A professional’s failure occurs due to one or more of the following three things:

  • Ignorance
  • Gross incompetence
  • Intentional misrepresentation

While none of the above are acceptable, under most state guidelines and statutes, “intentional misrepresentation” may be found to be fraud and/or deceptive business practices and be met with sanctions and punishment such as fines, revocation of one’s right and ability to conduct business in the state and even imprisonment. Should such activities end up with injury or loss of life, the repairer and their staff could also face civil lawsuits seeking financial damages for the victim’s injuries and/or loss of life by their surviving loved ones.

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The Insurer Made Me Do It

While many repairers may believe that they have a defense in that they’re merely doing as they’re told by insurers, this is no viable argument or defense.

Repairers need to be aware that under most state guidelines, repairers do not work for the insurer, they work for their true customer, the vehicle owner or the owner’s designated representative. If the repairer and insurer have a DRP relationship, most if not all formal agreements for participating in such programs include a hold harmless agreement and/or liability waiver or indemnity clause excluding the insurer from any and all liabilities. Generally, this liability release is for any and all liability for personal injuries including death and property losses or damage in connection with any activity of the repairer, their employees, sublet vendors, etc. Such agreements also mandate that the participating repairer have sufficient liability coverage for any and all claims arising from repair-related issues.

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One needs to be aware that should an issue arise, the insurer will take the position that they merely compensated the consumer [customer] for their loss in money and they don’t perform repairs, nor do they determine repair methodologies, including the ultimate labor operations, labor time for same and/or the selection of specific parts or materials. These activities are the responsibility of the repairer and authorized by the customer.

The insurer merely prepares an estimate of anticipated repair costs as to set aside financial reserves (monies) to cover the loss (as mandated by state and federal regulations governing insurers). The insurer will no doubt take the defensive position that should the repairer find that additional consideration was needed for a proper and thorough repair, all they [the repairer] had to do was advise the insurer and they [the insurer] would have promptly addressed and resolved the issues. After all, they write thousands of supplements a day all across the country (and would have no problem showing evidence of such). The insurer will no doubt take the position that all they want is a proper and thorough repair and a fair and reasonable price.

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Summary

The repairer’s responsibilities to their customers is to provide a proper and thorough repair which restores their vehicle to its pre-loss condition in safety, appearance, function and value to the best of reasonable human ability and do so at a fair and reasonable price. The repairer should take into consideration all aspects of repair, including parts, materials and processes which will enable them to meet this level of repair. In situations where they may be precluded from doing so, they should advise their customer as to:

  • What is needed (to meet the level of repair as previously noted)
  • Why it is recommended
  • Why it cannot be completed (insufficient funds, not repairable, no longer available etc.)

The next responsibility for the repairer is to provide their customer any viable solutions that may be available to remedy the situation and seek direction from the customer. This may aid in limiting the repairer’s liabilities.

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It’s important for the repairer to properly and adequately document each step and communication sent to and received from the insurer and the customer in an effort to avoid any miscommunications, misunderstandings, related delays and associated costs. Proper documentation will be there if and when you ever need it, and if you don’t collect it as it occurs and do need it one day, it will be impossible to recover and retrieve later.

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