The private snow removal industry in North America is estimated to be worth $22.7 billion, with Canada accounting for $4.7 billion. In Canada, this industry comprises over 40,000 snow removal contractors. Understandably, this is a highly lucrative type of business in areas with a colder climate. However, the income of these businesses also depends on the season because snow removal does not have perennial demand.
Proper risk management is essential for any snow removal business. It isn’t surprising that there are inherent risks in the snow removal industry. Afterall, these businesses directly handle one of nature’s most unforgiving elements. The dangers of third-party slips and falls, property damage, and employee injuries are just a few examples of common risks.
In this article, we will talk about the contributing factors as to why the snow removal industry is considered high-risk. We’ll also cover what steps you can take to easily get a snow removal insurance policy that is tailor-fit for your business needs.
Let’s get started!
Risk #1: Slips and Falls
During the winter months, snow and ice accumulates on sidewalks, parking lots, and other commercial/public areas. This increases the likelihood of slip and fall accidents. A recent report by the Canadian Institute for Health Information (CIHI) stated that one-third of the injuries to be admitted into the E.R. were due to accidental falls. Of this percentage, there were around 8,800 cases that occurred as a result of slipping on ice.
Why These Numbers Matter
These kinds of incidents can happen to anyone. If a person slips, falls, and gets injured on commercial property, they may sue the property owner or even the contractor who is responsible for clearing away ice and snow. Your vulnerability to such a lawsuit would depend mainly on the stipulations of your contract with the property owner.
Additionally, any proof of negligence will increase your vulnerability even more. Just one of these cases can cause your business a lot of damage if the person decides to press charges and you are found legally responsible. Should your snow removal company be found legally responsible for the slip and fall injury, medical expenses would be steep – especially considering that these kinds of injuries result in longer hospital stays.
Risk #2: Third-Party Property Damage
Most snow removal businesses employ the use of one or more of the following equipment:
- Snow plows
- Telehandlers for snow
- Trucks for snow
- Skid steers
This heavy and powerful machinery is effective in clearing away snow from driveways, roads, and parking lots. However, due to their immense size and power – coupled with the opaqueness of snow – they can easily cause property damage.
A few examples of property damage associated with snow removal is damaged sprinklers, dug up property edges, damaged mailboxes, and damaged parked cars. In order to avoid this, property owners can take the initiative to mark or relocate certain parts of the property that are vulnerable to damage. However, this isn’t their responsibility.
In fact, the responsibility lies fully on your business to ensure that no property damage happens due to your operations. Thorough preseason planning before the snow sets in coupled with effective documentation helps your business to avoid such scenarios.
Any form of property damage can lead to lawsuits filed against the snow removal business. Hence, there’s a risk of your business taking on the financial responsibilities of repairing or replacing damaged parts of the property.
Risk #3: Lawsuits Because of Employee Mistakes and Negligence
In any industry, employees and contractors are never above making mistakes or exhibiting negligence. In the snow removal industry, mistakes and negligence can be seen in the following (and similar) scenarios:
- Failure to remove snow and ice as agreed in the contract, causing injury or business interruption for the client
- Failure to apply anti-icing treatment as agreed in the contract, causing snow and ice to reaccumulate sooner and cause injury
- Creating a large, poorly placed snowbank that later on restricts road visibility and causes vehicular collision
- Ineffectively displacing the snow where it causes someone to be injured
In these above cases, the snow removal business can face costly liabilities. If any injuries or damages happen because of these mistakes or acts of negligence, the offended party has the right to sue the business and be compensated.
Risk #4: Expenses and Lost Income Associated with Equipment Damage
Successful snow removal businesses often operate under tight schedules, relying on their powerful machinery and skilled employees to get the job done on time. However, machines can fail. In the event that they do (and you do not have any back-up machines), you may need to advise your customers of the situation and work out some arrangement. This can mean lost business while your machines are under repair or replacement.
There are various ways that essential machinery can get damaged. It can be because of an accident, wear and tear, or an act of vandalism. Whatever the case may be, because your snow removal business relies so much on these heavy-duty machines, there is always an underlying risk that these machines could break, causing the business to halt.
Risk #5: Expenses Associated with Employee Accidents and Injuries
Just as snow and ice can be dangerous for the general public, it can also present hazards for your employees. In some cases, your employees could be shoveling part of a property while the snow plow is run by another employee. Poor visibility, communication, or planning can result in a serious accident.
Depending on your arrangement with your employees, your business may be faced with various financial responsibilities – such as the injured employee’s immediate or long-term medical care, their lost wages, and, in the worst possible case, their death benefits and funeral expenses.
Protect Your Business With a Snow Removal Insurance Plan
As we’ve discussed in this article, there are plenty of risks faced by snow removal businesses. These risks can lead to medical expenses, legal expenses, repair/replacement expenses, and lost income due to interruptions. This is why many insurance companies consider the industry high-risk. This can mean that getting a snow removal insurance policy with proper coverage can be challenging. If you are struggling with this, we are more than happy to assist you!
Snow Removal Insurance powered by KASE Insurance is an award-winning commercial insurance brokerage in Toronto. We are dedicated to looking after your business as if it was our own. We will put together a comprehensive snow removal insurance plan that is based on the unique needs of your company. This way, you will get the peace of mind that you deserve and be able to focus on growing your business without worry.