I have no idea why it’s not snowing, but I can provide some valuable input here that may save your professional snow removal company money.
We are more than halfway through the snow season and coming up short of snow fall averages across the nation. I have no idea why it’s not snowing, but I can provide some valuable input here that may save your professional snow removal company money.
If your current snow removal insurance policies are based upon sales or payroll figures projected from the previous year, it may be time to review. Given the overall lack of snow activity, some policies may be higher than necessary.
Check with your broker to see if the policy will allow for midterm rating basis adjustment, as some policies will not allow for this. A snow removal contractor may be able to submit a mid-term payroll estimate and ask for a mid-term premium adjustment. The insurance carrier may be reasonable and amend the premium, resulting in a much-needed credit to your account.
Commercial Insurance for the professional snow removal contractor has a rating basis and a class of business for each policy. For example, insurance for snow removal contractors may be based on gross sales, number of employees, payroll, or even number of plows. There are many ways to control risk that apply to these insurance topics as you will see in the ASCA’s education module for Insurance and Risk Management if you are a member. In an effort to control the financial risk of cash flow, midway through the snow season is a good time to request an adjustment in your rating basis if allowed.
Estimated payrolls or projected sales are used when the snow removal contractor buys an insurance policy. The audit at the end of the policy year will collect the actual exposures that you performed during that year for snow and ice management operations.
An adjustment mid-year would be appropriate for the Workers’ Compensation policy and general liability policy. This will not only ensure proper premium charges but also make the audit process much easier on both contractor and insurance company auditors.
Make sure you understand some key endorsements on your policies, especially if your snow operations policy is written with a non-admitted carrier. Most non-admitted carriers have forms and endorsements that could prevent an adjustment or a full return of premium. But an admitted carrier may have more favorable terms in the event of an audit which the insured may receive a return premium.
The snow and ice management industry has fewer options in comparison to the landscaping industry with insurance availability. Endorsements on a non-admitted general liability policy have a major influence on this whole process – make sure you understand it.
I hope this helps and won’t confuse the ever-complicated world of insurance. But knowledge is power, and an insurance broker that understands the snow removal industry can be instrumental in all aspects of insurance policy management and risk control.