1. Performing services without a contract
Never perform services without a written contract. This is the most common, and most easily avoided, error committed by snow & ice management companies. Contracts don’t need to be complex, and you don’t have to spend thousands of dollars in legal fees preparing the contract. However, contracts must be in place for every job you or your subcontractors service. I have covered this topic many times, yet I still continue to see companies work without a contract. In the event of a legal dispute concerning the scope of work, pricing or liability, the first thing a court will look at is the contract.
- Have a written contract for every location you service. If you service more than one location for a client, the contract should specifically identify every location covered by the contract.
- If you are asked to add a location in the middle of the season, get something in writing that adds the location to an existing contract, or prepare a new contract for that location.
- The contract should clearly set forth the relationship between the parties, including: identifying the services to be performed; the timing of the services; responsibility for pretreatment, inspection and monitoring; and the price to be paid for services.
2. Failing to have a contract signed before service
The contract must be signed by all parties to be valid. Without engaging in a complex legal discussion, an unsigned contract is generally not enforceable. Do not make the mistake of believing a contract is valid just because you signed the contract and sent it to your customer.
- Make sure your customer signs and returns the contract to you.
- The same discussion applies to subcontractors working for you. Before the start of the winter season, make sure all contracts are completely signed and filed.
3. Failing to timely record accurate service documentation
Few tasks are easier, yet more often ignored, than keeping accurate and detailed records and documentation of services. This is especially true during winter storms, when the understandable priority and focus is clearing sites, rather than taking notes.
Because of potential disputes over billing and possible litigation over the adequacy of snow-clearing services, documentation and/or the lack of accurate records becomes extremely important long after snow services were performed. It is extremely difficult and time consuming to accurately and completely document the services you performed weeks ago; and it is impossible to do so years after a storm.
- Document the snow-clearing and deicing services performed by your company at all job locations, in response to all storms, throughout the winter season. Take notes of services performed or specific issues at the site if possible.
- Include stop and start times; exact services, including plowing and application of ice melt products; chemicals and equipment utilized; and cost of services. My larger clients require this information on internal work forms, and are now requiring this information be submitted electronically.
- Include detailed documentation of services on invoices. You will be surprised how much your customers appreciate detailed information supporting your invoices. This is especially true of management companies that must justify snow expenses to property owners and homeowners’ associations.
4. Failing to retain documentation
You should not discard contracts, records of services, invoices and other documentation, including important written communication with customers and subcontractors, at the end of the snow season. Legal disputes over services and personal injury claims are often brought years after the services are performed. Individual states have different statutes of limitations, and the time to bring a claim for breach of contract is usually longer than for a personal injury claim.
- Retain documentation for at least five years.
- Be detailed in the documentation you keep. It’s better to have an abundance of documentation than random, vague notes.
- Many snow companies are now storing information electronically. Although somewhat time consuming to initiate, electronic storage will greatly enhance your company’s record-keeping ability and prove cost effective in the future.
5. Failing to secure proper insurance coverage
Do not operate your company without adequate insurance. A claim for serious personal injury can potentially bankrupt your company if you do not have insurance coverage, and you should never, either intentionally or accidentally, be without adequate insurance coverage. There are many areas to save operating expenses, but skipping insurance coverage is not one of them.
- Your insurance must cover snow clearing. Do not make the error of relying upon a policy of insurance covering only landscaping operations.
- You should have coverage for any injuries to employees, and you obviously must have coverage for your company automobiles.
- Discuss your coverage with your insurance agent, and make sure you are adequately and properly covered.
6. Failing to communicate with your customers
A common and serious error is a failure to communicate with customers before, during and after the season. It’s a very good idea to communicate with clients in advance of storms to discuss the anticipated weather and your expected plan of action. Keep customers advised of any problems developing during the performance of services, including any potential drainage issues or other site-specific problems. Do not simply expect your customer to be aware of changing circumstances. The lack of communication leads to the vast majority of lawsuits I defend. Communication will enhance your client relationships along with the reputation and profitability of your company.
- Identify and document who is responsible for inspection and site monitoring after a storm. Confusion may lead to a lack of monitoring and inspection, unsafe premises, injury and a lawsuit.
- Meet with your customers before the snow season to discuss any changes in required service and to make sure your customers are happy with the services performed.
Darryl Beckman is the managing partner of Beckman Ogozalek Perez Paglione. The law firm has offices in New Jersey and Pennsylvania. He works for major insurance carriers and represents and consults with large and small snow & ice management companies throughout North America.