We've got you covered

Matt Peterson provides an update on the new snow liability insurance program and why you need to be involved.

The 2014-2015 Insurance Program for ASCA Snow & Ice Management Professionals has strong gains in knowledge, tough acceptance and staunch claims management. Snow Removal Insurance Brokerage, which is the program manager/underwriter, launched writing policies in August 2014 with the hopes of reaching a larger insurance audience working with local agents who have ASCA clients. The goal was to educate the insurance agent community as we help them get familiar with the snow and ice management industry to better serve contractors.

“This has been a fulfilling and educational experience,” says Stephanie Keller, operation and underwriting support from SRIB. “Keller is an integral part of the team who works closely with underwriting and processes for the program. During that time we spoke to dozens of retail agents who wanted to understand the changes in this industry. The year laid a foundation of greater understanding across the country. We studied information from a larger network of insurance professionals. The information re-affirmed the rapid decline in carrier availability for this line of business, which has been gradually occurring for several years now. It has been interesting and informative to watch the year unfold and see the positive changes progressing.”

Underwriting support involves quality assurance on a day-to-day basis and will involve checking in with ASCA’s Heidi Clevinger to confirm that this premier education was complete as per one of the conditions for acceptance into the insurance program.

Our insurance engine working on behalf of the snow removal professionals had the opportunity to review abounding types of applications, yet SRIB accepted only 30 percent of them into policies. What may seem like a low conversation rate is actually according to plan and exactly where our projections were set as we cautiously pursued the right type of controlled growth.

The numbers tell a story about the state of the snow removal contracting industry. Most of the accounts that came into our program were as a result of snow and ice management contractors advising their agents to do so, after hearing about the positive changes that have taken place within the last few years. The combined efforts of snow contractors and the ASCA have projected a bright future dedicated to moving the chains forward, yard by yard and inch by inch. What this indicates is that snow and ice management contractors are paying close attention at what’s happening in their industry, and are willing to do what is necessary to advance their operations “the right way.”

We cannot discredit the 70 percent of accounts that did not qualify for our program, but will acknowledge that there is still work to be done. All parties involved are committed to work for that 70 percent, as those contractors and insurance agents make the necessary and fundamental changes suggested.

Our data indicates that the industry must focus on the types of contracts that are executed, the efforts taken to identify the hazards of a property prior to plowing, and the types of recordkeeping truly exist versus claiming that proper records are on hand. These are some of the integral components to running a professional snow and ice management operation in year 2015. Hint: these ingredients are also vital in assisting our claims department when the unavoidable slip and fall claim drops in.

With respect to claims handling the program is not naive. Our insurance partners realize and fully expect that writing insurance will bring claims just as having a picnic will attract ants. Among other things, our claims strategy sets the product and process apart from all the pretenders who jump into the snow insurance market looking for quick gains. We have leveled up. We are elevated with respect to the types of information surrounding the claims and how industry specific knowledge is handled once a claim is received. Historical data shows blind payouts resulting in frequent incurred loss totals which in turn effects the overall premium of the account. As discussed in prior education, articles and presentations, the insurance nerds review a snow contractor’s loss runs for the previous years and when payouts or reserves totaling $500,000 are revealed, there is a natural reductants to offer a renewal, or the insurance provider may renew, but with some unaffordable increase in premium.

High frequency and a terrible loss ratio has occurred over the last 10+ years and led us to the situation we are now working to get out of; low carrier availability, skyrocketed premiums and inattentive claims handling. Sixty-seven percent of the claims that we have seen during the life of our program have been closed, 44 percent with no payout. The ones that did result in a payout were under $3,000 each. These claims are being investigated more aggressively now, and through the evolutions of insurance and risk understanding, we are hoping to see stability with rates and premium moving forward. Make no mistake, that there is no substitution for hard work, strong leadership and a pooled resources that working with the ASCA has provided.

Another important aspect of our program is contract review. The industry truly understands why the program takes such measures to review them and our underwriting process maintains a thorough analysis and client contract education and risk control is necessary. We are on the insured’s side. Contract review not only helps us identify the risk involved and how to identify our risk, but also helps make the insured more aware of the types of contracts they are entering into. It is important for the future of our customers that the industry understands chapter and verse of what they are signing.  We are talking about a major shift in power that puts the snow and ice contractor in a better position, contractually.

This industry is as important to us as it is to the business owners. Our goal is development and dedication to positive advancement, and if we keep moving ahead as we are, that is exactly what we expect to see.

Matt Peterson is the president of Mills Insurance Group LLC, based in Marlton, N.J., and a frequent Snow Magazine contributor.