From a legal perspective, there are four areas that you should put in order as you look ahead to the next winter season:
Review customer contracts
This is a perfect time to meet with customers to make sure they are satisfied with your services, possibly sell additional services and renew contracts. Check all existing contracts to make sure the following are covered:
- Start date and expiration date. There must be a start and stop date in every contract. This sounds simple, but I constantly see contracts without clearly identified effective dates. A contract is of little use if there’s confusion about whether the contract was in effect.
- Signatures of all parties. I often see legal claims arising from slip and fall accidents occurring early in the snow season, before the contract for services is signed. An unsigned contract is generally not valid, and you should make sure all parties sign the contract on or before its effective date.
- Trigger for services. A contract must specify when snow clearing and deicing services are to begin. Do not sign a contract if there is any ambiguity about when services are required.
- Inspection/monitoring responsibility. Your contract should reflect whether you are responsible for monitoring for melt and freeze after services are complete. This is extremely important from a liability perspective. About 75% of the cases I defend arise from conditions caused by melt and freeze, and responsibility for inspection/monitoring is often highly contested.
- Price for services. I know this sounds silly, but the contract should clearly identify the price structure for the job location, including whether you are paid per event or per service, and whether additional payment will be made for inspection/monitoring. The contract should also state whether there is additional payment for pre-salting and for salting on return visits.
- Required insurance coverage. Many customers will require that you carry a minimum amount of insurance coverage. Make sure the insurance limit is clearly identified in the contract.
- Additional insured coverage. Many clients will require that you identify them as additional insured on your insurance policy. The contract should clearly set forth any such requirements.
- Defense and indemnification. Many customers also require defense and indemnification for legal claims. Make sure the contract clearly and unambiguously sets forth the circumstances requiring defense and indemnification.
Update your insurance coverage
You likely have policies of insurance covering general liability, automobiles and workers’ compensation. Do the following:
- Verify your policies are effective. Make sure your policies are current and in effect. All too often I come upon snow-clearing companies with no insurance coverage for a legal claim.
- Verify your company is covered for snow clearing and deicing services. It is not unusual for a small snow & ice company to learn that its policy of insurance did not cover snow claims. Many landscaping policies exclude coverage for claims arising from snow-clearing services.
- Ask your insurance agent about possibly lowering your premium. The cost of coverage varies from year to year, varies based upon your loss experience, and varies from insurance carrier to insurance carrier. You may be able to secure a lower premium if you have not experienced many new claims over the past couple of snow seasons.
Perform preseason site inspections
Make sure you take care of the following details:
- Inspect all new job locations, if possible on the day of or day after a rain event. Check for any drainage problems or unique site characteristics. Don’t wait until the middle of the snow season to learn about special requirements for a job site. Many legal cases arise from water traveling from piles of snow to a frequently traveled area. Protect yourself and avoid potential claims by understanding the physical site requirements.
- Visit all existing job locations and meet with the property manager or owner. Discuss any concerns, including timing and scope of services. Discuss the need to pretreat if you are not already authorized to do so, and discuss possibly adding to the services provided by your company. It is extremely important to stay in personal contact with your clients if you want to retain them.
Verify subcontractors’ insurance
If you hire subcontractors, the following is extremely important:
- Your subcontractor must have insurance coverage for snow clearing and deicing services. Verify the coverage by demanding a certificate of insurance, and require the certificate unambiguously reflect that snow-clearing services are covered.
- Require all subcontractors to identify your company as an additional insured on a policy of insurance. There is tremendous benefit to your company to be identified as an additional insured, including placing responsibility on the subcontractor’s insurance company to provide a legal defense for your company in lawsuits arising from the subcontractor’s negligent acts or omissions.
- Verify the subcontractor is not utilizing the services of a second-tier subcontractor. You do not want the subcontractor hiring another company to actually perform services without your knowledge. If you allow second-tier subcontractors to perform work on your behalf, require proof of insurance coverage from them.
- Make sure all subcontractors sign a contract or agreement with your company before any services are performed. Do not wait until the fall to secure signed agreements…start right now!
Darryl Beckman founded Beckman Roth Ogozalek, which has offices in New Jersey