Solid contracts

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.
 

Contract review

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 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.