Insurance and the ASCA

Columns - Editor's Note

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September 16, 2011

A year ago, we held an open-forum discussion with those in attendance at Snow Magazine's Executive Summit. Two hours later, we concluded that event with a mandate from industry leaders to investigate an insurance solution for the professional snow industry.

So, with a group of industry volunteers – including Troy Clogg, Kyle Rose and John Allin, and many others who provided their insight – we are happy to report that we have concluded our due diligence. And with that, Snow Magazine is excited to announce a partnership with Mills Insurance that will provide insurance for snow contractors.

Mills Insurance, who will administer the program, is an ideal partner for this endeavor. Their expertise in the snow industry gives them the necessary knowledge of today's insurance issues and how they impact snow contractors' business models.

For the past six months, Mills Insurance, in partnership with Snow Magazine, has analyzed data, identified snow contractors' exposures and developed controls for those exposures, and is now ready to implement and monitor this process going forward.

Needless to say, this has been a daunting task; it will require on-going development to manage, monitor and adapt this program. When it comes to our industry and insurance, there are many complicated issues.

For insurance companies, it starts with slip-and-fall incidents. Those contractors who do not follow proper operational procedures, and have fair contract obligations in place, damage the industry. By compromising on standards, snow contractors are making themselves uninsurable. Insurance carriers care about profitability. If they are paying out more money in claims per year then taking in premiums, they are failing to make a profit for their shareholders. As a result, many insurance carriers have taken a very tough stance on snow operations because of sky-rocketing claims. To limit their exposure, insurance companies are eliminating this class of business or excluding the snow operations from contractors' primary businesses.

Due to the increased likelihood of accidents, injuries and property damage in this line of work, the portion of your general liability policy known as "products completed/operations" is taking the heaviest hits in snow contractors' insurance policies.

Many contractors are still not using proper contracts to limit their liability at the time of claim. In fact, contracts are heavily favored towards the property owner in taking all liability arising out of the work performed by the contractor. For example, a pedestrian visiting a commercial building after a snow event trips and falls on the icy parking lot. They will sue the building owner and the building owner has contracted with a snow contractor who has taken on the liability.

Lastly, this country's laws do not favor snow contractors. The premises law varies state by state and influences the level of involvement insurance companies have in this industry. There are states that are more understanding of the responsibility towards snow removal of property owners and there are states that are less tolerant.

The insurance program we have developed with Mills Insurance takes into account all of these factors and more. If we are going to drive down insurance claims, we will need to control the risk associated with our business.

Many of you are already adopted these things, and should be commended for doing so. Others who are not need to integrate best practices into their businesses. These standards must reflect our industry's very best and encourage contractors to adhere to an accepted level of professionalism.

To be considered for this policy, snow contracts will be required to verify they are practicing certain industry standards. Those industry standards include:

  • Employee and subcontractor training programs, including verification of that training
  • Preseason inspection reports that include: details of clients property; potential risk areas; where to place snow piles; performance of snow disposal services and operating hours
  • In-event documentation that includes: site arrival and departure times; services performed and incidents/accidents occurred on this visit
  • Subscription to a weather service
  • Contracts are being used and include the following: company logo; signatures from both parties; date signed; responsibilities of the insured – where they will plow, shovel/snow blow, salt or sand (sidewalks, parking lot, side streets and access roads), as well as when they will plow, salt or sand (snow or ice accumulation in excess of a specific number of inches, during snow fall, after completion of snow/ice fall, etc.) and what their services entail – this should be very specific.
  • If salting and deicing is not part of the services offered, the contract states that the client is responsible for them.
  • Detail of liability
  • Detail of service expected – zero tolerance, strike point and service when called
  • Services to be performed

It's these important procedures that protect your business and the insurance company from lawsuits.

In addition to operating the business by these industry standards, it is also important to the insurance company that contractors have a commitment to their business through education.

Therefore, to solidify this program, manage it on a continual basis and safeguard the industry in the future, Snow Magazine is excited to announce the formation of the Accredited Snow Contractors Association (ASCA). The ASCA is a wholly owned subsidiary of GIE Media, Inc.

To be eligible for the insurance program, Mills Insurance will require membership in good standing in the ASCA. This means you have fulfilled the educational requirements, your business practices are in accordance with the industry standards listed above and your nominal dues are current.

The ASCA will provide the proper education to the industry on an annual basis, represent snow contractors to the insurance industry and represent the industry on the local, state and federal level. ASCA is setting aside 10 percent of all membership dues to be used in the hiring of lobbyists. There are two laws in this country that define liability for our industry. One is the "natural accumulation law" the other the "Connecticut rule."

For those unfamiliar with these terms, "natural accumulation": state property owners and contractors are not responsible for natural accumulation of snow. They are, however, responsible for unnatural accumulation. This means that as soon you move the snow, the property owner or you is responsible. Likewise, the "Connecticut Rule" states an individual must take reasonable care of their property in a reasonable time. The contract you have determines the liability. This also does not state that consumers need to take reasonable care – for example, like wearing high heels in a blizzard.

ASCA will represent the industry in bringing fairness to these laws. I am honored to take the role of ASCA's executive director and accept the responsibility to grow the industry to new heights. You can find out more about ASCA at www.ascaonline.org or call me directly at 330-523-5368.

The snow industry has been through a lot of growth and changes in the last 15 years. But it's an industry still in its infancy. The insurance program is the next big step to impact this industry. We are privileged to be a part of it, and look forward to leading the industry through the next phase of its growth.