A little peace of mind is what any snow removal contractor is looking for during those grueling winter months when accidents and damages can occur.
This peace of mind is achieved through a good insurance program. In making sure that the program is appropriate for the contractor’s needs, they need to simply know what coverage to have, how much to have and what sorts of questions to ask an insurance agent.
With the proper coverage, contractors can go about snow removal without having to think about insurance needs, and know that they are protected should a problem occur.
| Subcontractor Stipulations |
While snow removal contractors have to be prepared for winter with the proper insurance, they also have to make sure that their subcontractors are covered as well. If the subcontractors are not insured, the contractor could end up in hot water. “Subcontractors have to give the contractor evidence of insurance and their liability has to be equal to the contractor’s,” said Bruce Strachan, president of Strachan Casale, an independent insurance agency in Twinsburg, Ohio. Jay Michaud, president, Witness Tree Landscaping, Williston, Vt., echoed Strachan’s comments. “Any subcontractor that works for us has to have at least an equal amount of insurance. If someone is close, I may take a gamble, but if it’s just a one-man operation with a truck and he only has $100,000 coverage, I can’t take that risk.” Doug Jessup, president of Corporate Assurance, an independent insurance agent in Mission, Kan., explained that contractors need to require a certificate of insurance from the subcontractors. “More importantly, have you as the contractor named as an additional insured on at least the subcontractor’s general liability. This requires the subcontractor’s insurance company to notify the contractor if the insurance were to become expired or if it has been cancelled, for example.” |
THE NECESSARY COMPONENTS. According to Bruce Strachan, president of Strachan Casale, an independent insurance agency in Twinsburg, Ohio, contractors should have two main types of insurance - automobile liability and general liability.
“Automobile liability is the commercial automobile policy, which includes liability and damage to the vehicle,” Strachan noted. “Also, be sure to notify the agent that the equipment will be attached to the truck because then the plows may need to be insured specifically.
“General liability insurance includes two parts: premises and operations and completed operations coverage,” Strachan continued. “Premises and operations includes ‘doing what you do when you do it where you are doing it.’ For example, if the contractor is cleaning the sidewalk and someone gets hurts because of flying debris or ice, the damages would be covered under this because the accident isn’t relating to the auto policy. Completed operations coverage is for once the job is finished and the crew has left the site. The contractor will be covered if someone slips and falls.”
Jay Michaud, president of Witness Tree Landscaping, Williston, Vt., explained that he carries a commercial lines policy that covers his equipment, general liability and an umbrella policy.
“Under the umbrella policy is where most of my snow removal problems would fall,” Michaud stated. “Also, under the general liability policy, I have finished goods insurance. For example, if I plowed and dropped deicing material, then I left and someone slipped and fell, the damages would be covered under this policy.”
Once the types of coverage needed are determined, the actual amounts of the policies need to be decided upon.
“There isn’t any standard for how much coverage a contractor should have,” remarked Doug Jessup, president of Corporate Assurance, an independent insurance agency in Mission, Kan. “Typically, these contractors have lawn or landscape businesses so they are covering their automobiles already because of the summer work. We see a lot of people with $1 million in coverage. It is hard to determine how much is necessary so we recommend $1 million even though some carry only $300,000.”
CARE, CUSTODY & CONTROL. A gray area in many contractors’ insurance plans is a clause called care, custody and control.
Strachan explained this as damage that occurs to a property that is under the care, custody and control of the contractor. Some insurance plans will not cover this.
“This is a difficult area to understand because every adjuster handles it differently,” Jessup commented.
“For example, if someone takes in their shoes to be repaired and they are ruined while in the repairman’s care, then his or her insurance will not cover the damages,” Strachan remarked. “Although the process is the same, there is more of a gray area for contractors. If a contractor is cleaning snow off of a parking lot and while working on the surface, the blade hits the pavement and becomes damaged, will it be covered? Some insurance companies say no, however I say ‘yes’ because the contractor is only working on the snow and not the lot and is therefore not responsible for the lot itself.”
According to Strachan, the most important thing to know in regards to care, custody and control is how each individual agent handles the issue. This way, there won’t be any surprises.
“We damaged an expansion joint on a parking deck and at first our insurance agent refused to cover the $8,000 damages,” lamented Norm Detrick, president, Reliable Snow Plowing Specialist, Macedonia, Ohio. “The insurance company claimed that the parking lot was in our care and custody because of what our job is. We finally won the suit, but this is an important subject to talk to your agent about.”
In some cases, Jessup will broaden the general liability coverage so that more is covered to protect the contractor.
Talking to the agent and asking specific questions is key to having an effective insurance program and being aware of what is and is not covered in a policy.
Strachan stressed that contractors should ask their agents what coverage is needed in the off-season.
“Contractors should tell their agent where their equipment is stored in the off-season because it may not be covered under the regular auto policy since it is not attached to the vehicle in the off-season,” Strachan added. “Just be sure to ask the agent a lot of questions.”
MINIMIZING LIABILITY. Using common sense is the most obvious way to reduce liabilities when doing work as a snow removal contractor. However, there are a few other ways to minimize accidents while contractors are on the job.
“Reducing liabilities requires good management,” suggested George Hohman, president, Turfscape, Northfield, Ohio. “Let the employees know that management is watching out for any damages they create. Contractors can’t do a lot to change the damages made to turf because that is just something that will happen. Just use common sense and don’t rush through the jobs.”
Michaud recommended that contractors do not push the drivers too hard. “We have sleeping quarters for them and we rotate drivers during a storm,” he added. “We could be up for 24 to 48 hours, so we feed our drivers and have them take naps. If the equipment is maintained and contractors have responsible drivers, the company should be successful.”
Jessup explained that training is a major factor as well. Workers should be trained to operate the equipment and operate it in inclement weather, according to Jessup.
“Give drivers enough time to do the job safely,” Jessup continued. “When they rush, accidents are much more likely to happen. Also, don’t overbook and try to be in two places at once. Keeping the same drivers on the same routes can be helpful so operators can get used to the same properties.
“Don’t overbook your contracts, and try to minimize the time spent on the roads,” echoed Doug Freer, president of Lawn Lad, Cleveland Heights, Ohio. “Also, be sure the drivers take their time and don’t rush through a job.”
Another key point for avoiding liabilities is to keep all of the equipment maintained, according to Jessup. “A preventive maintenance program will save money in the long run.”
Above all, for a contractor to reduce liabilities, have an effective insurance program and keep peace of mind during the winter, they should use their agent as a counselor, according to Strachan.
“The agent should tell the contractor how to be prepared,” he added. “The contractor has to tell the agent what they do and how they run their business because different coverage is needed with different equipment.”
The author is Assistant Editor of Lawn & Landscape magazine.
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