Snow removal insurance checklist: How to get affordable coverage

The cost of insuring snow and ice removal operations has been on the climb for a couple of decades. While there is no simple answer, there are ways for contractors to mitigate their risks, get insured and avoid being subjected to a third-party bodily injury lawsuit.

The cost of snow removal insurance coverage in Canada soared to new heights in 2021. Although we’re still enjoying summer’s warmth, it won’t be long before contractors with snow clearing businesses face the chill of paying wildly expensive premiums or be forced to freeze their operations.

Inflation and a challenging economic environment are why insurance rates are ratcheting up currently. But the cost of insuring snow and ice removal operations has been climbing for a couple of decades.

What’s fuelling the problem is our increasingly litigious society. There’s been a dramatic rise in the number of slip-and-fall lawsuits in recent years, resulting in insurers operating at a loss and prompting many to hike their rates or stop offering coverage altogether. The Insurance Bureau of Canada estimates commercial liability coverage claims that include ice-slipping incidents increased by 108 per cent between 2013 and 2020, rising from $2.4 billion to $5.1 billion.

That leaves snow removal businesses, which range from small one-person operations clearing residential driveways and walkways to large subcontractors plowing commercial properties, roads and highways, in a real bind.

Tips for reducing your snow removal operation’s liability

Here’s a cold, hard fact: Getting a snow removal insurance policy for the forthcoming winter will be difficult and more expensive than you would like. Nevertheless, here are a few tips for contractors to mitigate their risks, get insured, and avoid being subjected to a third-party bodily injury lawsuit.

• Don’t buy equipment first. Before you drop several thousands of dollars on snow clearing equipment, make sure it’ll be a worthwhile investment by getting insured and signing up clients first. Moreover, buying an annual policy that covers snow removal operations in the winter and landscaping in the summer tends to be more affordable and easier to obtain than seasonal insurance contracts.
• Carefully review your contracts. Before signing off on a snow and ice clearing contract with a commercial client, be sure you don’t agree to accept more liability than you reasonably should. A loosely worded contract may place almost any slip-and-fall mishap on you, exposing you to greater risk than an insurance company is prepared to accept. Speak to a licensed broker before inking client contracts to understand what you are covered for and what may prove problematic.
• Watch for hazards. Take the time to identify, assess and minimize any potential dangers on any property you’re clearing. Since slip-and-fall claims have become as popular as owning a mobile phone, strive to reduce the risk of it happening to you. That is particularly true of properties or areas such as public sidewalks and parking lots with a lot of pedestrian traffic.
• Maintain your equipment. Ensure you keep your snow removal vehicles and equipment in excellent condition. Don’t put off regular or necessary maintenance work. Always conduct a safety check of your equipment before starting any snow clearing operation.
• Log every action at every property. Maintain a logbook with an accurate account of your work and take photos or videos documenting what you did and when. For example, let’s say you’re responsible for clearing and salting a big box retailer’s parking lot. The weather was dreadful overnight, with heavy snowfall followed by freezing rain. You arrive at the property at 4 a.m. to clear and salt it and depart at 4:30 a.m. At 5 a.m., someone comes to the property, exits their vehicle, and walks across the lot in a pair of old sneakers instead of winter boots. They fall, are injured, and sue you for third-party bodily injury. Good news: You’ve got a log showing you upheld your commitment to your client. That significantly reduces the likelihood of an insurer rejecting any claim you file.
• Make training employees a priority. If you have employees, train them whether they’re experienced or not. Make sure they know all health and safety requirements, plowing techniques and how to operate the vehicles and equipment they use. 
• Pick snow pile spots wisely. Snow piles can create visual and slip-and-fall hazards. Plus, they could flood properties, turn into black ice, or generate road drainage problems when they melt.
• Don’t work while fatigued. Driving or operating snow removal equipment while tired is dangerous, especially when working overnight or before dawn. Downing cups of coffee won’t change that. Get some rest before starting work.
• Be a defensive driver. If you’re licensed and contracted to clear municipal streets or provincial highways, be a stickler for the rules of the road, drive defensively and keep an eye out for other vehicles and pedestrians along your route.
   
  

  Snow removal insurance: Don’t plow without it

It’s a conundrum for snow removal contractors to get insurance at an affordable price and that reality is unlikely to change soon. However, running a snow removal business without insurance is not the answer.

The cost of one accident or lawsuit claim – even a frivolous one – without insurance coverage is enough to put you out of business permanently.

Aharshan Thangarasa is a licensed broker and team lead, contractors at Zensurance, Canada’s leading source for small business insurance. Get a free quote for your insurance needs by visiting Zensurance.com/DCN.