As winter approaches, it’s time to ensure that your snow removal contractor agreements are set and, more importantly, that your risk transfer strategy is airtight. Liability claims resulting from the “improper removal of snow and ice” are not only frequent but can also be incredibly costly. Many of these claims stem from elderly individuals sustaining severe injuries from slips and falls, often resulting in long-term or permanent consequences. In other words, BIG CLAIMS.
Whether you own a manufacturing facility, manage a building, or oversee a property with parking lots, sidewalks, or pedestrian areas that require snow and ice removal, there are some key things to keep in mind to avoid being buried under liability.
Why Snow Removal Poses a Serious Risk
As a landlord or property manager, snow removal is your responsibility—and it’s a critical exposure. The most expensive claims often involve slip and fall accidents that occur due to ineffective or incomplete snow and ice removal. That’s why one of the most important steps you can take in managing this risk is to transfer it to your contractor when securing snow/ice removal services.
Key Risk Management Steps for Business Owners
Here’s how you can protect yourself and your assets:
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Choose a Reputable Contractor
Make sure your snow removal contractor has well-maintained equipment suitable for the job and a strong safety record. A contractor who cuts corners can leave you exposed to greater risk. -
Establish a Solid Written Agreement
The agreement with your contractor must be thorough and contain:- A clear scope of work.
- Insurance requirements.
- Indemnity and hold harmless provisions.
This ensures that the contractor, not you, assumes responsibility for any damages or injuries arising from their work.
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Obtain Proper Proof of Insurance
It’s essential to collect Certificates of Insurance as well as any necessary endorsements that demonstrate the required coverage extensions. These should clearly outline the nature of the operations and guarantee coverage for snow and ice removal services.
Essential Insurance Coverage to Include
Regardless of the job size, as a landlord or property manager, you must ensure that the contract requires the contractor to:
- Procure and maintain proper insurance coverage for the duration of the agreement at their own expense.
- Include general liability, automobile liability, and workers’ compensation coverage.
- List you as an Additional Insured on their policies, ensuring that you are protected in the event of a liability claim.
Additionally, the contractor’s policy should provide full contractual liability, which supports an indemnification provision in your favor. This means that if an incident arises due to the contractor’s negligence, their insurance covers the damages—not you. Be sure your name and address appear in the Certificate Holder sections of all Certificates of Insurance issued.
Before the Work Begins
Before any snow removal begins, you must review all insurance documents and endorsements. Verify that each coverage required in the contract is present, and make sure it explicitly states that snow and ice removal services are included. In many cases, summer contractors take on snow removal during the winter as a seasonal service, without updating their insurance policies. Make sure this is not the case by confirming coverage with their insurance agent, whose contact details will be on the certificate.
Stay Vigilant About Cancellations
You also need to ensure that your contractor’s insurance policies are not cancelled or altered without sufficient notice. Require that at least 30 days’ written notice is provided before any cancellation, termination, or modification of their coverage. This requirement should be clearly stated in the contract and confirmed on the Certificate of Insurance.
If you receive such a notice, do not allow the contractor to continue work until replacement coverage is provided that meets all of your contractual provisions.
A Smart Additional Step: Verification
To safeguard your business further, after receiving a Certificate of Insurance, it’s a good practice to contact the issuing broker directly. Request written confirmation (an email is sufficient) that the coverage listed on the certificate is accurate and up to date.
Consider This Real-Life Example
Imagine you’re the property manager of an upscale mall. A customer slips on ice-covered steps and suffers a severe ankle fracture requiring surgery. The customer is a working mother with a family. Over five months, the family incurs medical expenses of $40,000 and lost wages of $35,000. To add to this, they had to hire domestic help, which cost an additional $17,500. The total out-of-pocket expenses, known as “specials”, amount to $92,500. After factoring in the permanent disability, pain and suffering, and the family’s loss of services, the claim balloons to over $350,000.
If your snow removal contractor’s insurance isn’t sufficient or you don’t have the proper indemnity and hold harmless provisions in place, this claim could easily fall on your shoulders.
Protect Yourself: Effective Risk Transfer Is Key
By ensuring your snow removal contractor agreement includes proper indemnity, hold harmless language, and necessary insurance coverage, you transfer the financial burden of any accidents to the contractor. This can help shield your company’s assets from costly claims related to snow and ice removal.
For more information on how to protect your business from these risks, contact Albert Sica at 732.395.4251 or email [email protected].
About The ALS Group
The ALS Group is an independent insurance and risk management advisory firm based in Edison, N.J. As advocates for our clients, we do not broker or sell insurance, nor do we accept engagements from insurance carriers or brokers, ensuring that our perspective remains objective and uncompromised.
For more information, email [email protected] or call (732) 395-4250.
