From auto damage to worker injuries, snow removal companies face risk with every job — and in the off-season, too. With good insurance, you can eliminate a lot of your financial peril.
Snow removal can be complicated. Not every state or locale has laws regarding snow removal, but among those that do, the regulations can vary significantly. Most consequential is that each state assigns different levels of liability to snow removal companies.
Some do not hold snow removal contractors responsible for third-party injuries suffered after snow removal, while others transfer full or at least partial responsibility to the snow removal company both during and after the snow is cleared.
Even if you aren’t liable for injuries suffered after snow removal, your liability is never completely eliminated. That means commercial general liability insurance is among the most important policies your snow removal company needs.
This insurance helps with the cost of defending your business against claims of property damage or physical injury caused by your company, either at your own offices or at a client’s property during snow removal. Depending on the policy, coverage may also apply even after the job is complete.
If your company is ultimately found at fault, the policy also helps with the cost of any awarded damages or medical expenses.
Confirm with your insurance professional if you need to add a snowplow completed-operations endorsement to your policy. This endorsement extends liability protection to incidents that happen after you’ve finished removing the snow and are not even on the property. For example, an endorsement would kick in if someone slips and falls in a parking lot you’ve cleared or a pile of snow you pushed to the side physically damages something.
Also make sure your policy covers rooftop snow removal if that is a service you provide. That activity poses special risks.
Beyond liability
In addition to liability protection, your insurance checklist should include:
Commercial truck/auto
This type of policy covers vehicles, snowplows or equipment used to haul vehicles to your work site. If you have several vehicles, your agent or broker will talk to you about fleet insurance, which is an efficient way to cover all your vehicles on one policy.
If your employees or subcontractors use their own vehicles for snow removal, understand that their personal auto policies do not apply to business use. You can add hired and nonowned insurance to protect your employees’ personal vehicles. And you should require subcontractors to provide their own proof of insurance with liability levels at least equal to your own limits.
Discuss any detachable equipment, such as snow blades, with your insurance professional to ensure it is included.
Of additional note: It is common for landscaping companies to augment income in winter months by plowing snow. Do not assume your current vehicle insurance extends to snow removal jobs. Confirm your coverage with your insurance professional.
Commercial property
Whether you own or lease a business space or operate your business from home, commercial property insurance helps with the cost of damage or loss of physical assets owned by the business. These include computers and technology, tools, furniture and other possessions. Losses related to theft, vandalism, fires, storms, explosions or burst pipes are typically covered, while those caused by earthquakes, floods or wildfires require an add-on policy specific to those perils.
You may want to add other coverages to your commercial property policy as well, depending on your business model. As an example, you may want equipment breakdown insurance to cover the repair or replacement of valuable equipment due to electrical or mechanical issues. Or you may want business interruption insurance to replace lost income if a covered physical loss forces you to halt your operations.
Talk to your agent or broker about off-season use and storage of your equipment as well.
Errors and omissions (E&O)
Also known as professional liability, this type of insurance protects you if someone accuses you of making a mistake that costs them money or causes them harm. Examples include negligence, errors in services provided, omissions, misrepresentations and inaccurate advice.
For example, say your employees didn’t show up at a client location or clear all required surfaces, making it impossible for the client to open for the day. While general liability would not cover you because third-party physical damage or personal injury did not occur, E&O coverage might apply.
Workers’ compensation
Most states require employers to carry workers’ compensation insurance. Depending on the number of employees you have, you may need to purchase this insurance to provide for medical expenses and/or lost wages caused by workplace injuries. Note that if you use independent contractors, you need to consult a labor lawyer as well as your insurance professional, since the government is cracking down on the misclassification of workers. Depending on how you structure your relationship with contract workers, you could be considered their employer, even if for a very short period. And you might need to include them on your workers’ compensation policy.
Umbrella insurance
There is always risk of a loss greater than your policy limits. To protect against catastrophic loss, an umbrella policy can provide backup protection by picking up where your primary insurance leaves off. An umbrella policy cannot be used as a replacement for a primary policy, but it does allow you to control costs by maintaining lower primary policy limits without leaving yourself exposed, should a large liability claim occur.
Customize your options to get the right coverage
As a snow removal company, you have several options for insuring your business. The policies discussed above are traditional methods, but there are more innovative products you may wish to consider.
One is an insurance program designed for snow removal and lawn care companies. An insurance program typically bundles multiple coverages for a client so you don’t have to build a full suite piecemeal. There are also business owner policies and insurance package polices that achieve a similar outcome — the fullest protection assembled into a suite specifically for your needs.
Talk to your agent or broker about these options since they are designed to be highly effective and affordable.
Contact Us
To learn more about unique public sector risks and how to address them, contact OneGroup’s team.
This content is for informational purposes only and not for the purpose of providing professional, financial, medical or legal advice. You should contact your licensed professional to obtain advice with respect to any particular issue or problem. Please refer to your policy contract for any specific information or questions on applicability of coverage.
Please note coverage can not be bound or a claim reported without written acknowledgment from a OneGroup Representative.
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