Is there liability insurance for snow removal companies?

At first glance it would seem a good way to make some extra money in the winter would be to put a plow on your pickup truck and clear a few driveways and parking lots.

But before doing that, step back and do some homework. If you don’t know how to properly clear a parking lot, if you damage someone’s lawn while plowing a driveway, or if you don’t have the right kind of – or enough insurance. You could find yourself taking a whole lot more money out of your pocket than you’re putting in it.

Martin Tirado, executive director of the Snow and Ice Management Association in Milwaukee, Wis., says most professional snow removers who belong to his organization have years of experience behind them to know what kind of coverage they need to protect their business.

“They’re especially aware of slip and fall problems,” says Tirado.

These operators coverage typically have a commercial auto insurance policy that would cover all of the potential hazards involved with plowing snow for income purposes.

For clients with large parking lots and lots of sidewalks, Tirado says slip and fall issues are the single biggest concern.  He says it’s important to have a contract that spells out where the snow piles are to be placed.

“You don’t want to have the melt runoff go into an area where people walk. The melt water could freeze and the last thing you want is someone walking across or driving through a patch of slippery black ice.” Tirado says.

He adds having a contract can also minimize the cost of your insurance. By having a written document to show your insurance provider, it can mean lower premiums.

Tirado explains that with a detailed contract, snow removal businesses know what the requirements are for each job.  Not only does this make it easier for them to plan each job, insurance companies like to see in simple terms what kind of snow removal they’re doing and the possible impact it could have on pedestrians and vehicular traffic.

It’s also important to have a contract that determines when to start plowing.

Is it a one inch snowfall? Two inches? Four inches? Make sure that’s spelled out and make sure the contract indicates which sidewalks, if any, you’re to clear.

If it’s a shopping mall, for instance, the insurance provider will want to know about slip and fall liability issues.  If it’s a private street in a condominium or apartment complex the main focus will be on vehicle collisions, particularly between the plow operator and parked cars.

“Don’t do any plowing for residential customers, including condominium or homeowners associations, without a written contract,” says Tirado, adding that the contract should indicate which surfaces should be cleared and whether they should be salted.

But what if you plow the driveway next door because you’re a good neighbor and you knock down the mailbox? Not to worry, says Mark Bates, president of Pinnacle Insurance Group of Indiana in Crown Point.

“Your homeowner’s insurance  would extend to something like that,” says Bates, “as long as you’re operating in the scope of being neighborly and you’re not doing it for compensation.”

“It’s no different than if I was mowing my yard in the summer and the mower threw a rock or a stick and broke my neighbor’s window. My homeowner’s insurance would cover that, just like it would plowing snow.”

But are you covered if you want to be neighborly and clear the sidewalk in front of your house? There is a fear that by clearing the public sidewalk, the homeowner is liable should someone slip and fall.

Bates says that depends, but in the vast majority of communities around the country, sidewalks are public property and if someone gets hurt on them, it’s not the fault of the homeowner.

“In most communities, the homeowner does not own the sidewalk,” says Bates. “That means the homeowner is not responsible. For myself, very seldom do I clear the sidewalk in front of my house, not because of that, but because I just don’t want to do it.

“Do I have a duty to clear the sidewalk? No. Being neighborly, yes.”

Bates says it’s not uncommon for sidewalk injury claims to be filed against homeowners, but he can’t recall one in which the homeowner was liable. “Three years ago we had a claim where a woman out for a walk tripped on the sidewalk where a tree root had popped up a section of sidewalk. She filed a claim, but the insurance company denied it because it didn’t happen on the homeowner’s property.”

Bates says that’s the same principle as clearing the sidewalk.

But on private property like an office or shopping center parking lot, Tirado says lots of people are injured every winter from slipping and falling on the ice. And if those people are injured on property you plow, it could increase the cost for insurance coverage or even result in a lawsuit.

That’s because most snow plowing contracts are non-contributory, which means the client will not be a part of any claim.  In other words, if a customer falls as a result of a snow plowing issue while walking to a store, the liability is entirely on the snow plow operator, not the retailer.

Tirado warns if the contract’s provisions aren’t followed, it could cost the  snow plow operator money if there’s an accident claim. If the contract isn’t followed, an accident claim could result in higher premiums when it’s time to renew your policy, or even the possibility that the insurer would decline to offer coverage.

Tirado says another benefit of having a contract is it helps eliminate disputes between the operator and the customer. Detailed contracts also help the snow plow operator get the best rates for their insurance coverage because when the liability concerns are reduced, insurance companies are more willing to provide coverage at lower rates.

Charles Lasher, operations manager for SIS Insurance Services in Carlsbad, Calif., says any snow plow operator, even those who clear off residential driveways, should have a good commercial policy worth at least $1 million in order to cover any damages from injuries that might occur.

SIS writes special coverage for snow plow operators and helps clients understand the particular requirements for snow plow businesses.

Lasher also recommends snow plow operators have commercial vehicle and accident insurance to cover any issues arising from damage to a customer’s property.

The website also says it’s important to make sure you have enough coverage. The minimum coverage limits varies by state so it’s necessary to find out what your state requires.The DMV provides a list of minimum commercial auto insurance requirements by state.

If there are any questions, DMV.org suggests you consult an insurance agent to go over the details. It’s also important to remember that by doubling the cost of your coverage, say from $500,000 to $1 million, that doesn’t necessarily double the cost of the premium.

Also, if you will be using your snow plow only in the winter, a way to reduce your premiums is to only have comprehensive coverage active for the entire year, the rest of the coverage should be considered “seasonal,” which means those coverages would only be activated during the winter months.

If after all that, putting a snow plow on your pickup truck to bring in a few extra bucks sounds like a good idea, then by all means go for it.  But before plowing that first flake of snow make sure the insurance blanket you have properly covers you and your business.