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Risky business

  • SIMA
- Posted: September 1, 2015

By Gabriel Asebedo, CSP

Snow services in general can be considered a risk management service but really not in the holistic sense. The term that best fits with what most snow and ice service industry professionals offer today is a silo risk management service — it is one component of a greater whole. To be a risk manager, you have to add dimension to the service you provide, which goes beyond simply snow and ice removal.

Risk management techniques
The following techniques are used to create a risk management process:

Risk transfer is essentially an insurance contract. You receive liability protection up to a certain dollar in exchange for a premium amount that is appropriate for the level of risk the insurer is undertaking on your behalf.

Risk avoidance takes actions that either reduce the risk probability to zero, and/or protect the project’s objectives such that the risk impact is zero. For example, we serviced a steeply sloped parking lot where water would pool and freeze. Rather than changing the grade or the drain system to eliminate pooling, we  avoided the risk entirely by barricading that parking lot.

Risk mitigation reduces the probability or impact of a threat so that it is below an acceptable threshold. All snow service contractors engage in risk mitigation. When you move snow or melt ice, you are mitigating the likelihood of an accident or probability of loss.

Risk retention is when the client consciously retains the risk by planned acceptance of losses by deductible or deliberate noninsurance. This is usually done by companies who understand the risks but take steps to mitigate the potential for slip and falls to the highest degree.

Risk sharing is sometimes confused with risk transfer. Most contracts shift the burden of the risk to the snow service professional. True risk sharing would be a good opportunity to lower overall winter service costs.

It’s a process
Snow and ice management professionals must follow a specific process to affect proper risk management that includes:

  • Interview the client
  • Assess the property and evaluate the issues
  • Recommend a course of action and implement or facilitate solutions, and
  • Review the effectiveness of its outcome

Selling risk management
Snow and ice management is a reactionary business in many respects. We have to wait for the event to happen in order to prove our services are valuable. You can sell winter service management/risk management plans when there’s no winter. They can be sold together or separate.

To successfully sell risk management, you have to prepare and really understand how to create comprehensive risk management solutions before asking your customer to buy in. Second, the client must be willing to pay for the value they see in it. Communicating with the client and educating them about the risk management plan will allow them to put their trust and faith in you as the risk manager for the property and the snow service provider that’s best for them.

Identifying yourself or your company as a risk manager is risky. Doing so can escalate your professional liability. No longer are you just providing snow services - you’re holding yourself out as something greater.

Risk Management Scenario
Problem: Excessive ice buildup on sidewalks, side of building and parking lot.

1. Identify the risk. Rooftop drainage interferes with safe passage of pedestrian traffic in the north lot. Melt/refreeze cycles on the south side of the property create morning slip and fall hazards.
2. Analyze and evaluate. Rooftop drains were clogged with foliage and trash.
3. Control and address. Trim trees that are close to the roof. Make sure rooftops are free of debris and gutters are regularly cleaned out.
4. Finance and fund. My work in the first three steps allows my client to pay me not to clear ice from a fixable situation but for the trust and faith in me to provide the service that is most appropriate.
5. Administration and re-evaluation. What you may give up in revenue for salt, manpower and shovels, you gain through a relationship-establishing process that allows you to update that risk management plan each year. You’re no longer nickel and diming the customer to provide services. You’re providing intangible value.

Gabriel Asebedo, CFP, CSP, is a past owner of a snow management company in Minnesota. He is also principal of Perennial Wealth Group Inc. and a SIMA Ambassador. This article is excerpted from a webinar Asebedo conducted on Selling Snow as a Risk Management Service. Visit here for the entire archived webinar.

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