With the 2014-15 ASCA snow removal insurance effort underway, let’s discuss the painful process of getting a quote.
The largest hurdle for ASCA members to get over once they have moved toward an insurance review is the contract review. Part of the process that an insurance brokerage must understand and underwrite is the contractual obligation the professional snow and ice manager agrees to, which is a vital part of the underwriting process.
It's important for snow and ice management contractors to truly understand that this is where the rubber meets the road in understanding the risk the insurance industry is taking on through an insurance policy. Likewise, this is also the most invasive aspect of the underwriting process.
Here's some quick background if you aren't up to speed on recent events.
Mills Insurance, an ASCA partner, brought in an A-rated insurance carrier and together we announced in August a new program to insure snow and ice management companies.
This program recognizes the higher level of standards of ASCA Certified (ASCA-C) professionals, and reflects this professionalism through a specialized insurance offering. Additionally, the program recognizes the snow industry’s efforts with ISO9001/SN9001, which carries a more aggressive rate consideration. The insurance partnership offers local independent agents a way to properly serve their snow contracting clients the right way.
Snow Removal Insurance Brokerage will work directly with the insurance agent and assist the insurance industry in becoming more knowledgeable about snow industry issues and offer a product for them to sell to their clients. Mills Insurance Group will continue to work directly with the snow industry and with individual contractors.
First off, Snow Removal Insurance Brokerage requires a copy of the contract if additional insured requirements are needed for the policy. All ASCA-certified contractors have taken the additional insured education and understand the basics of the gravity of this status.
On a side note, I have already received some "interesting" feedback on the additional insured education course (available through the ASCA via ascaonline.org) due to its challenging subject matter. I'm still waiting to receive a brick through my front window. In other artisan contracting classes, such as a plumber or electrician, the underwriting of a contract is less critical than with snow and ice management. Instead, the onus of risk and liability weighs heavily on the shoulders of the snow contractor.
However, the ASCA has been able to relieve some of this weight through the introduction of ASCA-C and ISO 9001/SN 9001, which gives snow and ice professionals the ability to validate their standards and procedures. These tools also arm contractors with more firepower when fighting or discouraging frivolous slip-and-fall claims.
The belief is that as the industry matures into this new breed of professional snow and ice management contractor, the exercise of contract review will allow the ASCA members to take more control of the premium associated with the snow removal general liability.
There is no need to show the underwriters the work method or trade secrets within a contract. Instead, the underwriting is focused on the following:
- Scope of work;
- Type of property;
- Indemnification; and
- Insurance requirements of any contract that the company is signing.
The process is geared to flush out and identify if the sole negligence of a property owner/manager is assumed in any contract. This is the goal. From that point an insurance broker will underwrite and tie a premium or cost to that risk assumed in the contract.
The Accredited Snow Contractors Association (ASCA) announced it has collaborated with Josh Ferguson, an attorney with Philadelphia-based Kent/McBride P.C., to offer standard contracts and sub-contracts at a discounted cost to members. These template-style contracts include language to protect snow and ice management contractors both before and during litigation. In addition to the template contracts, alternative scope of work and indemnification language will be provided.
Attorney Ferguson works primarily in the areas of commercial premises, motor vehicle, contract, and construction defect litigation, and has litigated cases throughout Pennsylvania and New Jersey. He has also been retained as general counsel for a wide variety of businesses, including but not limited to those in the snow removal and landscaping industries. As a result of his experience he has created thorough contracts that will help protect your business and also potentially reduce your insurance premium.
The new standard contract or sub-contract is available for $500, or both contracts are available for $750. As these contracts are templates it is recommended that contractors have all contracts reviewed by their attorneys to ensure compliance with state and local laws and ordinances. Attorney Ferguson’s general counsel services will be offered to ASCA members at $150/hour, a significant rate reduction. If you have further questions, please contact Ferguson at firstname.lastname@example.org.
The arrangement is just another asset available to ASCA members that not only strengthens their business operations, but also helps curb frivolous slip-and-fall claims.
“Frivolous slip-and-fall claims have led to not only skyrocketing insurance costs, but has forced insurance providers from the market, all of which negatively impacts the ability of snow and ice management contractors to provide a vital winter service,” says ASCA Executive Director Kevin Gilbride. “Strengthening winter service contracts with accurate and appropriate language is just another weapon our industry has to fight these often bogus claims.”
The intent of this examination is not taken lightly. Brokers understand they are in a privileged position put here by the snow removal contracting industry. Confidentiality is vitally important to the members and trust has been earned throughout the years by proving they are capable of the position they hold.
The ASCA membership has quickly become the elite snow and ice professional group with the major changes and initiatives shouldered for the entire industry.
We thank you for the trust you have placed in our industry and will continue to work with you up the mountain.
Matthew 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.