By Jack Demski, CIC, Ansay & Associates
From the August 2024 Issue of PLOW
Snow removal contractors are vital players in ensuring safe and accessible environments during Winter. However, with the unique risks involved, adequate insurance coverage is critical to protecting a business. Below are the essential policies.
General Liability Insurance
General Liability (GL) insurance is a cornerstone for any business. It covers third-party bodily injury and property damage claims that may arise during operations that include bodily injury mostly occurs with slips/falls and property damage can occur while using snow removal equipment. It’s vital to ensure the policy includes coverage for “Completed Operations,” as liability can arise even after work is finished due to alleged negligence or failure in snow removal.
(Photo: Adobe Stock / evannovostro)
Here are some of the most common GL endorsements:
Additional Insured Endorsement (CG 20 10, CG 20 26, etc.). Extends coverage to additional parties, typically property owners or municipalities, who may be held liable for the contractor’s operations and commonly required by clients as part of contract agreements.
Snow Plowing Operations Endorsement (CG 20 42). Specifically addresses liabilities related to snow plowing activities and extends coverage from the GL contract. May include coverage for property damage or bodily injury caused by plowing equipment or operations.
Snow and Ice Removal Operations Exclusion (CG 22 92). Excludes coverage for specific risks associated with snow and ice removal. It is important to review and understand the scope of this exclusion, as it could limit coverage for certain snow removal operations or businesses that have multiple different classes of liability.
Equipment Coverage Endorsement. Provides coverage for damage to or loss of snow removal equipment.
Waiver of Subrogation. Prevents the insurer from seeking reimbursement from third parties who may have contributed to a loss. Commonly requested by clients to minimize their risk.
Contractual Liability Endorsement. Extends coverage to include liabilities assumed under a contract, while protecting contractors in agreements requiring them to assume liability for specific risks.
Pollution Liability Endorsement. Covers liabilities arising from environmental damage caused by snow removal. It may include coverage for spills/leaks of chemicals, such as de-icing agents.
Hired and Non-Owned Auto Liability. Commonly added into an Auto Liability Policy but could provide coverage for vehicles not owned but used in operations, such as rented, leased, or employee-owned.
Broad Form Property Damage. Expands coverage for property damage to include damage to property in the care, custody, or control of the contractor and would be critical for contractors working on properties where they handle clients’ equipment or other assets.
Per Project Aggregate Endorsement. Modifies the policy to apply separate aggregate limits to each project rather than a single limit for all projects combined. Useful for those managing multiple contracts.
Other Essential Insurances
Workers’ Compensation is mandatory in most states for businesses with employees, and is crucial for companies involved with snow removal. (Photo: Adobe Stock / Parilov)
Commercial Auto. This insurance is crucial, and coverage limits should reflect the value of vehicles and the potential costs of liability claims resulting from accidents. Scenarios Covered: An accident involving a company vehicle while traveling to or from a job site and damage to or theft of a vehicle or snow removal equipment.
Inland Marine. This vital insurance protects equipment frequently transported or used at various locations. Tailor the policy to cover all equipment and tools you regularly transport. Scenarios Covered: Theft or damage to plows, blowers, and other specialized equipment while in transit and losses during temporary storage at job sites.
Workers’ Compensation is mandatory in most states for businesses with employees. It covers medical expenses and lost wages for employees who are injured or become ill due to their work. It’s crucial to ensure the policy covers the specific risks associated with snow removal activities or has payrolls allocated to class code 9402, as these can be more hazardous than landscaping work 0042 or 9102. Scenarios Covered: An employee sustains an injury from a slip/fall while working on icy surfaces; Medical costs and rehabilitation for an employee injured by operating snow removal machinery.
Professional Liability insurance, or commonly Errors & Omissions (E&O) coverage, protects against claims of negligence or failure to perform professional duties. Even if you operate as a sole proprietor, this coverage is vital. Scenarios Covered: Claims that the contractor did not clear an area adequately, leading to accidents and disputes over the quality of services provided.
Documenting Landscape Damage For Insurance Claims
Commercial Property insurance safeguards your physical business assets, including buildings, office spaces, and storage facilities. Ensure the policy reflects the value of your property and consider additional coverage for business interruption to cover lost income if operations are halted due to property damage. Scenarios Covered: Damage to a company office or garage used to store equipment due to Winter storms and vandalism or theft of business property.
Umbrella insurance provides additional liability coverage beyond the limits of GL, auto, and other policies. We call this the “sleep easy” coverage as everyone has a different tolerance for what is enough. Scenarios Covered: High-cost liability claims that exceed the limits of existing policies and legal costs/settlements from major lawsuits.
Cyber Liability insurance. Contractors often use digital tools for payments, so protecting against data breaches and cyber threats is increasingly important. Scenarios Covered: Data breach of customer information collected through online payment systems and cyber-attacks that disrupt operations or lead to financial losses.
Demski is a business insurance specialist with Ansay & Associates, based in Port Washington, WI. He has over a decade of experience in advising small to medium-sized enterprises, helping them navigate the complexities of insurance coverage. You can reach him via email at jack.demski@ansay.com, or call 262-284-7174.
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