‘Tis the season of slips and falls on ice and snow. Business owners, self storage facility owners, and other property managers know only too well the costly consequences of these cold winter months.
That’s why they understand the importance of working with a snow removal contractor who has the proper snow plowing insurance.
So, before the first snowflake hits the ground, and the first person slips on ice on your premises, make sure the written contract includes these 5 snow removal insurance requirements.
5 Insurance Requirements for Snow Removal Contractors
1. Defined Contractor’s Responsibilities
It is imperative to have a written, signed contract that guarantees you receive the services you are paying for. A snow removal contract should be fair to both parties. Make sure the contractor you select understands exactly what is expected from him. Before you put pen to paper, make sure the contract includes the following:- Detailed “Terms & Conditions” that identify the duration of the contract (start & end dates)
- Detailed scope of service that clearly defines the level and timing of service that is included (exactly what areas of the property the contractor is responsible for, the work that is to be performed, and when the contractor is expected to respond)
- Clearly defined pricing and terms of payment for work that is included as well as ad-hoc services the contractor has been authorized to perform
- In-depth description of a snow event, and when and how the work must be performed, melting products used
- Clear identification of any areas and items that are not included in the scope of service requirements
- The ability to edit the contract with written agreement from both parties
- A termination clause applicable to both parties
2. How Much and What Kind of Insurance Should Your Snow Removal Contractor Carry?
The contractor must have general liability and workers’ compensation insurance in place with an insurance company that has an AM Best rating of at least A-, and is licensed to do business in your state. The contract should specify the required liability limits, and while this depends on the size of the contractor, and the number of properties they insure, the minimum should be at least one million dollars per occurrence.
3. Be Listed as an Additional Insured
The contract must mandate that the contractor’s policy lists you as an additional insured. That’s right, a certificate of insurance is no longer sufficient, and an increased number of insurance carriers will not provide additional insurance status unless it is required as part of the written contract.
4. Liability & Protection
The defense and indemnity requirement enforces that as long as the contractor is liable for a claim, they must defend you against any claim or lawsuit made against you, and settle the claim, provided it is warranted. It’s a good idea to carry your own liability policy, especially since most states refuse to allow you to contract away your own liability.
5. Primary and Non-Contributory Requirements
The primary and non-contributory requirement clarifies the intent of the defense and indemnity requirement, by defining the contractor’s policy as primary while stating that your policy is not to contribute to the defense and indemnification of a lawsuit or claim.
No Two Snowflakes Are Alike, and the Same Applies to Snow Removal Contracts
A Per Event contract means that you only pay if snow falls. Your snow removal contractor will begin their services after the snow accumulates to a pre-determined height, usually between 2-4 inches. This type of contract is attractive to some property managers because they only pay for the services they receive.
A Seasonal contract is usually set for 2-3 years, during which you pay fixed snow removal prices. Depending on the weather conditions and amount of snowfall, a seasonal contract can work in the client’s favor one season, and the contractor’s favor the next season.
A Full-Service contract is also set for 2-3 years and is the premier plan for snow and ice removal. As a full-service customer, you know exactly what your winter costs will be, and you have peace of mind knowing that all your needs for the season are covered, including ice treatment around the clock, and signs warning of dangerous road conditions.
So, leave the shoveling to a snow removal contractor with quality insurance in place, who provides the five insurance requirements in your contract, and enjoy peace of mind knowing you are well-protected.