Lessons in liability: How to protect a snow removal business from liability issues
By Mike Jiggens
By Randy Strait
Some of the best things in life involve ice. The icing on a cake is
many times the favoured part of the dessert. Ice can also mean a
striking, expensive piece of jewelry. But take the positive
connotations out of the word and ice quickly becomes a very serious
matter that can cause great trouble for the people involved.
In most areas of Canada, winter can be a dangerous season, and not just because of the inevitably risky driving conditions. Every year, thousands of people slip and fall on the ice. Sidewalks and parking lots are transformed into sheets of ice, and it’s not uncommon for accidents to happen and injuries to occur. Quick to follow those injuries are expensive liability lawsuits, as the courts look for someone to blame. More often than not, the snow removal contractor will be the party left holding the bag.
Prevalent in nearly all areas of the country, liability cases have been rapidly increasing over the years. More and more people are seeking outrageous amounts of financial gain after a fall, and will fight whomever they need to in order to collect. As a snow removal contractor, it’s important to do whatever it takes to protect the company and its clients from these potentially massive monetary losses.
When one thinks of accident prevention, insurance is probably among the first phrases that come to mind. While it’s extremely vital for a snow removal company to have a solid policy, it’s not the only protection needed. Setting clear terms in a contract and following best plowing practices will also go a long way in protecting a business.
Ensure you’re insured
Owning a snow removal business can be expensive. Between purchasing necessary equipment, hiring and training new employees and marketing the company, the costs truly add up. But perhaps the most important expense that goes into a business is a solid insurance policy.
Because the snow removal business can be unpredictable, it’s crucial for a contracting company to have an insurance policy that’s large enough to cover the many claims that may arise. In fact, it’s not unusual for the policy to be worth upwards of $3 million.
Although the biggest overhead the company has, liability insurance isn’t a choice in the snow removal industry. If an injured party files a claim against a contractor that doesn’t have insurance, the contractor must pay the entire amount out of his or her own pocket. This could quickly end up costing the contracting company hundreds of thousands of dollars—easily wiping out much of its annual revenue. Consider the following likely scenarios.
A truck driver slips on the ice and injures his or her back. If the injury is severe enough that he or she can’t drive truck again, the claim will be enormous. It goes far beyond just paying for the medical costs. The snow removal company will also be responsible for paying his or her livelihood expenses. If the driver was making $40,000 a year and still had 20 expected years left on the job, the cost of the claim quickly adds up and will suddenly be worth several hundred thousand dollars.
Another scenario is the possibility of employee injuries on the property. If one of the client’s employees slips and falls, they will likely file for workman’s compensation. Workman’s compensation is a form of insurance that provides wage replacement and medical benefits for employees who are injured on the jobsite. In return, the employee must relinquish his right to sue the employer for negligence. This is a key consideration for contractors because the insurance company that covers that business’s workman’s compensation policy will likely seek restitution from the snow removal contractor.
Furthermore, when a policy is up for renewal, large claims often come back to haunt the contractor—adding expense to his or her renewal. If the snow removal business has several claims against it, the insurance company will base its new policy off of those claims. Whether they were paid out or not, the insurance company will see them as potential losses. If the contractor has the potential to lose hundreds of thousands of dollars, the cost of their policy will greatly increase.
Hands down, the best way a snow removal company can protect itself upfront is having a reasonable insurance policy. But when a slip and fall claim goes to court, and proof of a contractor’s specific whereabouts is required, it’s wise to arrive prepared.
That’s the ticket
Another kind of “insurance” a snow removal contractor ought to put into practice won’t be found through an insurance company. Should the contracting company ever be deposed in a court case, a great way to protect itself is by implementing a job ticket system.
Common in snow removal contracting businesses—both big and small—paper job tickets have been widely used to track company and employee information. A job ticketing system provides up-to-date information on amount of hours spent on each job and who was delegated to which area.
While the idea behind it is good, the execution of a paper system may not hold up in court. Compared to electronic records, paper is not as trustworthy, and its authenticity can easily be questioned. To combat this concern, many snow removal contractors have adopted an electronic job ticket system. If all employees possess GPS phones, their activity can instantly and easily be tracked and recorded. Information on when the crew was dispatched, what time the job was started and how long it took to complete will be crucial in court, even several years down the road.
Once an insurance policy is intact and a job ticket system has been implemented, the next step is setting up a provisional contract with each client prior to the start of the winter season.
Sign on the dotted line
Most business arrangements or agreements will begin with some sort of contract. The document allows one party to set up stipulations and conditions for which it expects the other party to adhere. Ability to set up specific criteria beforehand is a wise decision if liability issues are pertinent to the business.
When starting a relationship with a new client, many will draw up a non-contributory contract. This means the store or client will not contribute to or be a part of a liability claim—it is the sole responsibility of the snow removal contractor. If a customer or employee injures himself or herself, the contractor takes the blame, not the client.
In addition to placing all liability on the contractor, this type of agreement states a client in turn cannot instruct a contractor how to service his property. He or she cannot say where to put the snow, how much salt to use, hold off servicing during the night, and so on. If instructions are given to the snow removal contractor, the client assumes all responsibility for any potential slip and fall claims. Since the he-said, she-said game can get quite messy if the issue is brought to court, it’s best to avoid client instructions altogether.
A significant consideration to discuss with the client beforehand and to include in the contract is how much of the property to plow. Some clients will request just the lot be serviced while others expect sidewalks and walkways to be cleared of snow and ice as well. Be sure these parameters are clear so any future misunderstandings can be avoided.
Most slips and falls occur on high traffic areas, like sidewalks and walkways, so clearing them in a timely fashion and applying the appropriate material to melt the ice—especially in sub-zero temperatures—should be a top priority. A long-time standby and popular choice for many contractors is spreading salt on slick surfaces.
To salt or not to salt
In many icy situations, salt may be the answer to preventing slip-and-fall claims. It’s easy to apply, and it counteracts the slippery effects of ice on the pavement. But before spreading it immediately after the snow is cleared, it’s important to also understand the possible drawbacks that come with relying too heavily on salt.
In many cases, low temperatures may prevent salt from doing its job. It’s most effective when the temperature is 20 degrees Fahrenheit and above, and will work best when the sun is out to activate it. Because of these specific required conditions, salt may not be the best choice for every situation.
Another factor to consider is the possibility of a salt shortage. In areas with bad winters and numerous snowstorms, the demand for salt is high, and it’s not uncommon for a city or region’s supplies to quickly deplete. More than likely, any salt that eventually comes in will go to the large snow removal companies, leaving smaller contractors in a pinch.
Although salt has been known to make icy surfaces less slippery, and therefore prevent potential accidents and injuries, it shouldn’t be the only reliant factor. Since clearing the pavement and walkways of all snow and ice is the best defence against accumulation and accidents, employing effective plow practices will be crucial.
Best plow practices
Whether the operator is just starting out in the business or is a veteran who knows his or her way around a plow, there are always new techniques and methods to learn. By following some best plowing practices, the threat of potential liability claims will greatly decrease.
The first essential consideration when clearing a lot is to be mindful of how the snow is cleared. Make sure snow is pushed to areas where it won’t leach back. If it’s thoughtlessly piled in random areas or pushed onto islands, it may melt during the day, run off onto the pavement and freeze at night. If this happens in a higher foot traffic area, there’s a much greater chance for someone to fall and injure him or herself. Again, be sure to reference the contract set by the client. If a non-contributory contract was drawn up, it will be that much more important to put extra thought into the plowing method, as any accident makes the contractor liable.
Additionally, arriving at the client’s store or business several hours before it opens for the day will go a long way in preventing a slip and fall later in the day. If the job is not complete when the first customer arrives, the contractor has lost the opportunity to clear that area of snow. Ensuring that all snow and ice is cleared before the first customer pulls into the lot will help avoid potential obstacles.
Finally, the job doesn’t end after the snow has been cleared. A good contractor will make the effort to follow up at each place of business. In between plowing jobs, it’s important to go back to check up on the client’s property, especially if the temperature has dropped significantly. Even if it’s not currently snowing, be sure to check for things like black ice and areas that have frozen over, and tend to them if necessary.
Slip-and-fall claims are increasing more and more each year, making it absolutely crucial to take all the necessary steps to protect a snow removal business from liability claims and lawsuits.
With so many lots to plow and customers to serve during the winter months, it may seem like an uphill battle. But taking a proactive approach to prevent liability issues will greatly decrease the likelihood of financial loss.
Randy Strait is president of Arctic Snow and Ice Control Products, a leading snow and ice management contracting service. With more than 30 years of experience in the industry, he has developed the Sectional Sno-Plow. Today, Sectional Sno-Plows are available in a variety of lengths and are designed for compact, light and heavy-duty equipment.