The negligence bubble is bursting

Features - Insurance/Liability

That popping noise you hear may not be an altitude adjustment from skyrocketing insurance premiums. Change is afoot for professional snow and ice managers.

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May 21, 2014
Matthew Peterson

Take note!

Here are some partial and full-negligence terms to be aware and cautious of. Remember, when in doubt always consult with your insurance provider.

  • Any and all
  • Direct and indirect
  • Even if the claims is alleged to have been caused by snow and ice
  • Absolute language that will shut the door on a property owner’s responsibility

The high acceptability and presumption of contractual negligence within professional snow and ice removal contracts have inflated to an unreasonable level in recent years. As a result, these inflated assumptions have lead – or pushed -- the insurance industry to start offering in 2013 snow removal general liability policies at an unaffordable premium or skyscraping minimum premiums.

Without a doubt, this has had negative ramifications throughout the U.S. snow and ice management industry.

Insurance carriers are unapologetic, unsympathetic and won’t think twice before gorging themselves if they decide to offer an insurance premium to a professional snow and ice management contractor. Conversely, snow contractors certified by the ASCA and those following accepted best practices for the industry have had to scratch and claw their way to a fair and reasonable contract without pricing themselves not only out of winter season contacts, but out of the industry as a whole.

So we’ve come to a monumental breaking point.

This past winter, I spoke with a number of property managers, building owners and representatives from national snow removal companies who were having major problems finding snow removal service providers for their respective properties because the contractors lacked the required contract obligations, or failed to provide the proper insurance to cover them if/when a slip-and-fall claim was generated on their site.

While those were some of the reasons property managers were complaining, by no means was that the sole reason for their despair. Take the recent winter – 2013-14 – as a prime example of the unpredictability of what winter can conjure for a four to five month (or longer in some markets) time period.

So narrow is the average property manager’s/owner’s focus, most have no understanding – and most don’t want to – what the short-term battle plan is for the average snow and ice contractor managing their site. They very rarely take all of the variables into account, the ability to get reasonable insurance being one of them.
 

Improvements

There are a number of contractual improvements that create a more even playing field between yourself and the property owner or manager. I’ll outline a few of them for you.
 

Negligence

You will defend, indemnify and hold harmless our site during the winter months for any and all injury that happens, directly or indirectly, partial or somewhat close to partial, a tiny or a lot, a sliver or a large piece, an inch or a mile, accept any and all claims that you could have a second cousin to and who knows someone responsible for the contributory aspect of the slip-and-fall claim. By the way, it was a person who works for a tenant of mine and I collect a lot of rent from them. I know workers compensation should be in place for that worker of my tenant, but you agree to let them sue you instead of me for working at this site. Also, you can’t salt or be on this property when all of those tenants are working. Just after they leave or before they come to work.

Broad form indemnity agreement’s are bad. I will summarize this the following way, a contractor who assumes the obligation to hold the manager harmless for third-party liabilities – even if injury is due to active or passive negligence of property manager. The property owner’s mind-set relating to a contract like this, “Kindly, take on all of that exposure for a little bit of money. Your insurance should be my insurance for that time. And thank you for the pre-paid legal, which I will use for defense against the same people who pay me money to come on my property.”

Remember, if you are a contractor that has cut and paste the paragraph below into your contract, it’s a joke and the above sample hold harmless, should not be used in a contract with your client. The exposure to slip-and-fall claim increases substantially when certain properties are evaluated. For example, higher foot traffic on a property or area of the property will logically lead to greater instances of potential slip-and-fall claims.
 


 
 

Broad form indemnity agreement

This is defined according to the International Risk Management Institute (IRMI) as the exposure to slip-and-fall claim increases substantially when certain properties are evaluated. For example, higher foot traffic on a property or area of the property will logically lead to greater instances of potential slip-and-fall claims

No contracts that accept liability of the clients or their visiting persons (3rd party liability) forget the fact that it will be painful to suggest a contract that is fair to your client. This is about having a business to offer any kind of snow removal services.
 

Tie the negligence you accept to a dollar value

What is the cost for assumption of risk and funding any and all defense or claims that occur at your site or base on your contract which has multiple sites? The average cost of accepting sole negligence of the building owner and property manager is $22,000 in a policy season. This is a broad statistic which needs to consider the state in which the property is located.

 


Matt Peterson, CRIS, is the owner of Mills Insurance, Tabernacle, N.J. He serves on the ASCA’s Industry Standards Committee and is a frequent Snow Magazine contributor.