The heart of the matter

It’s important to understand your general liability policy and the additional exposure you may need to add to your premiums.

Bids are due and you are trying to figure out how to bid a job with the turbulent pricing of insurance

So you waited to the last minute and made your insurance effective dates in the month of October instead of June. Now you have to price in the insurance to a bid that is due - sound familiar?

It would be easier just to say, “Send it to your agent and ask him.” But the ASCA and its affiliates want to empower the member, so easy is for quitters!

General liability rates can be found on the policy that is in your top drawer or filed with the person handling the books. Dust it off and go to the section of the Commercial General Liability. Step 1: Look for the class code 99310.

99310: Contemplated Operations

This general liability code is very important; a code set up by the insurance world to put this industry into a box. The code is found on your general liability policy and has a rating exposure attached to it. This is needed so you calculate any added exposure in terms of cost added to the general liability premiums. If your policy doesn’t have 99310, it’s a good bet your insurance carrier has no clue what they are doing, and no - street cleaning is not snow and ice management. 99310 class contemplates the following operations:

  • Contractors who remove snow and ice from streets, driveways and parking lots either by hand, plow on the front of a truck or mobile equipment.
  • Risks that apply anti-icing and de-icing material to prevent or treat the buildup of ice on surfaces
  • Risks that clear snow from streets, roads parking lots and driveways

Step 2: Make a cheat sheet at the beginning of the season so you have your rate in the event you need to calculate your added general liability costs for a job. If you have a snow and ice management policy that comes up in the middle of snow season, be prepared to have two sets of rates that will affect your job pricing. Lucky for you an audit can pick up the exposure at the end of the season, but it’s better to get any extra charges added into a current payment plan during the current season to protect the balance sheet and if cash flow is an issue.

Step 3: Make a copy of the “Insurance requirements” (these are typically sent in to the insurance agent and requested by the property manager). They can be found in the bid or the contract that the snow company is evaluating. My best advice is to negotiate these requirements and do your best to have dialog with the property owner/manager. Explain that the specs created in the contract are most likely designed for a building contractor that is constructing the Taj Mahal and not taking into account what snow removal actually is.

Step 4: Identify what additional insured requirements are being asked. If you have completed the ASCA education, you should have a basic level understanding of the term “additional insured.” These requirements are typically found around the insurance section of the bid. If they are asking you for ongoing operations and completed operations, identify this because it’s important. Keep in mind that the consequences are different if the contract you are pricing is a seasonal, hybrid, or per event contract. Either way, find out from your insurance provider if these additional insured functions in the policy are included or need to be added based on the contract. In addition, that same section will tell you if the property is asking for the moon and the stars with requests like “waiver of subrogation,” a term used to say that your insurance carrier won’t try to get money from the property owner’s insurance. You can also see terms like “primary non-contributory” clearing the way for your insurance policy to be the first on the scene and none of the insurance dollars will come from the property owner until they have bled you dry.

Lastly Step 5: The umbrella limits will be asked for in the insurance requirements. The market is very stingy with respect to limits, so make sure that you have them and if they cost additional premium, be prepared to work those numbers into the job from the beginning.

And a reminder, please be careful with the workers’ comp, auto and pollution policy requirements. While insurance and liability coverage details are a sure cure for insomnia, they are important components to your business success and require your time and attention. That said, always seek out the assistance of an insurance professional is you have any questions or to alleviate any confusion.


Matthew Peterson is the president of Mills Insurance Group based in Marlton, N.J..


For more…
Want to learn more? Enter inot your web browser to access a Snow Magazine webinar featuring Matt Peterson, CRIS, insurance industry expert and Snow Magazine contributor, as he discusses the state of insurance for the professional snow and ice management industry. Then he gets into the hot seat and answers questions about insurance, what goes into securing insurance for a snow contractor, pricing, the impacts of slip-and-fall claims, how to best deal with your insurance company, and other related topics.

October 2015
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