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A group of nearly 40 snow and ice management contractors and industry representatives traveled to Washington DC Sept. 11 and 12 to take part in 2017 Legislative Day.

After spending the previous day getting briefed by Matt Fullenbaum, director of legislation, American Tort Reform Association, who shared his experiences and insights, the group converged on Capitol Hill Sept. 12 to meet with their respective elected representatives. The goal was to educate senators on the importance of supporting the Lawsuit Abuse Reduction Act (LARA) when it comes up for vote in the Senate, as well as other business issues vital to the snow and ice management industry.

Senate Bill 237 — aimed at reducing frivolous lawsuits — passed the House this spring and needs to get through the Senate.

A regular review of every snow and ice management contract you sign is an important segment of the risk management process. The contract may include a provision requiring a waiver of subrogation (WOS) in favor of the property manager or owner for whom the snow removal contractor is performing services. If this is the case, then the snow removal contractor must make sure the WOS endorsement is first, available; and second, is added to their snow removal general liability policy.

Subrogation is an insurance concept used in insurance policies, which are contracts. A loss typically occurs through the negligence of either the snow contractor or the property owner/manager. Generally, the negligent side or “at-fault” party is responsible for the defense and cost of the loss. However, the claim may initially be paid by the snow contractors’ insurance carrier based on some “comparative fault.”

The insurance carrier could then seek compensation from other at-fault parties to recover a portion or all of the amount the snow contractor’s policy have paid. This process is known as subrogation. You may find this subrogation term in your snow removal contract, referred to as, “Transfer of Rights of Recovery Against Others to Us,” in the insurance policy. This clause allows the insurance carrier to “wear the boots” of the snow contractor, and pursue a claim against other at-fault parties through the process of subrogation.

A WOS must be in writing before there is a known loss. Often a WOS endorsement refers to an exact contract as a means of clarification. There are a few caveats to the use of WOS clauses, and hence; how an insurance policy may be endorsed.

In some jurisdictions, a WOS may not be available. Therefore, a careful review of a state statutes is required. Ask you agent about your workers’ compensation carrier’s position and agreement before agreeing to waive your rights of subrogation.

Read the contract. Make sure you understand the executed written contract and the wording should be thoroughly reviewed by a snow competent attorney to understand the contract intent appropriately. For example, mutual waivers may be beneficial in landlord/tenant contracts, where all parties waive their rights. However, in snow removal contracts, mutual waivers may not be acceptable or prudent.

When used properly, a WOS clause will minimize cross suit claims between the parties, in most cases we are keeping the snow removal contractor and the property owner/manager. This is clean and will keep snow contractor and property owner on the same side which is the goal.

Once the claim has been accepted and settles with a third party or commonly the slip-and-fall pedestrian, there is no further recourse against the party named in the WOS endorsement. What we are fighting for is that a claim is representative and corresponds to an at- fault party. Without a WOS clause in the agreement and insurance policy, litigation or arbitration is frequently needed to sort out the battle between property owner and snow contractor adding inflated cost to figure out who is going to step up and defend the claim.

This is especially an issue as the ASCA legislative board is aware of in states where comparative liability may be shared. A WOS allows for the timely settlement of claims and avoids costly litigation.

So, review and understand the both your contracts and how insurance interacts with them. It’s important that all contractual language agreed to is consistent with how your insurance policy is constructed. As your snow removal insurance agency of choice, we are committed to helping you understand how your policy addresses the issues created by the contracts you agree to. Mills Insurance wants to learn more about how we can assist you. Please support the those who support you.

On September 12th, a group of ASCA members descended on Washington DC carrying your message. Our mission was to educate elected officials on the business issues snow and ice management companies face. Specifically, the number of slip-and-fall claims this industry faces each season.

The legal system allows anyone to file a claim against another person or entity for any reason (or no reason at all) and then the court system is left to let the claim run its course. As you know, rarely does the court system even get a chance to see the cases. As a matter of fact, only 15 percent of claims even make it into the court system. Most of the time the attorneys for the insurance carrier broker a settlement that makes these claims go away. This settlement then raises insurance premiums and encourages others to file similar claims for a quick payday.

Senate Bill 237, the Lawsuit Abuse Reduction Act, would rein in these lawsuits. This bill would make it mandatory for judges at the federal level (and subsequently the state level), to impose sanctions on plaintiff’s and their attorneys, who are found to have filed frivolous lawsuits. Those sanctions would include the plaintiff and their attorney’s being responsible for defense fees, if it is deemed a frivolous case. It also would remove the 21-day “safe harbor” clause. This clause allows a plaintiff’s attorney to file a lawsuit against anyone and then pull it back in 21 days. It discourages them from doing any research on the case, and encourages quick settlements.

We only met with Senate offices because this bill, which has partisan support, has already passed the House of Representatives. It only needs to pass the Senate and then be signed by the President. The Bill (HB 720) passed the House 230-188.

In the end, your peers took 48 hours out of their busy schedules to do perhaps the most important thing for this industry -- educate our elected officials on issues facing your businesses. Four years ago, I begged and pleaded to get 19 snow and ice management professionals to D.C. with me. This year, we were upwards of 40 attendees. On our first trip and in our first conversation, Paul Taylor, the chair of the subcommittee on the constitution, stopped me at the beginning of my presentation, and stated: “Wait a minute, you mean to tell me that people are suing people in the United States for slipping and falling on snow and ice?” He didn’t know. Your government doesn’t know. Why? Because we didn’t tell them. They can’t do anything about a problem until they know it is a problem. That is our fault…or was our fault. Thank the nearly 40 individuals who took care of that for you.

Our success on Capitol Hill, like always, garnered mixed results. We had mostly successful meetings. The Republican side was very sympathetic to our situation. Staunch Democrats have their heels dug in (likely due to the money the plaintiff’s bar uses to support them). Illinois Senator Dick Durbin is no friend to small business or the snow industry. New Jersey Senator Corey Booker’s office, while perhaps a little more cordial, also is not a friend of the snow industry.

Some more moderate democrats were very open to learning more about the issues we are facing, asking for additional information and follow-up from us. We are in the process of gathering that information. We’re also looking for more stories of frivolous lawsuits, and they do not have to be snow-related. If you have a story (or stories) call or email me directly at kgilbride@gie.net or me at 216-393-0246.