It’s the middle of July and the last thing any of us are thinking about is snow. Well, most of us. Businesses that provide snow plow service are gearing up for the season. It starts with contracts. But there are some things you need to know before signing the bottom line. Here at Hortica, we want to help you understand how contract provisions could have an impact on your business.
Of course, a contract sets out to establish what each party is responsible for. While every state and every situation is different, there are some common things you need to consider. When negotiating your contract ask:
- What’s the purpose?
- What risks do the parties face?
- How do you allocate the risks between the parties?
- Will the law allow the allocation?
- Can insurance help achieve that allocation?
- What language should be used in the contract and the insurance policy?
On top of that, make sure your contract sets out some specifics:
- Scope of the work to be performed
- When and what type of services will be done
- What type of services won’t be done
- Any hold-harmless or indemnity provisions
It’s the hold-harmless aspect of contracts that most snow plowing operations are interested in. These are designed to transfer the risk of loss. That transfer could be one-way—with one party agreeing to hold the other party liable for damages, or two-way—with both parties agreeing to hold the other harmless. What you have to look out for is poorly written or overly broad hold-harmless/indemnity provisions. You could find yourself facing unintentional exposure due to poor language in the contract.
Often, commercial property owners try to make a snow plow company hold them harmless. But the concern becomes whether that means the plow company is taking on liability they have no control over. The best advice for plow owners is to try and set limits:
- How much it has to snow before plowing
- Amount of time between plowings
- Have the property owner be responsible for calling for service.
- Maintain excellent records and logs as to what was requested & what was done
The plow company should also have a provision that the property owner “signs off” on the work that was done. In addition, the plowing contract should make the property owner acknowledge they’re responsible for their own actions and provide immediate notice of any potential claim. If the main plow company subcontracts for plowing or other snow & ice removal services, make sure to:
- Maintain insurance
- Have contractual provisions holding your company harmless
- Name you as an additional insured on the subcontractor’s policy
Once the negotiation is over, you’ll have to decide if the contract’s benefits outweigh any financial risk that it might have. Make sure you have a clear understanding of the risks you may be accepting by signing the deal.
If you take the job, keep clear records and logs of all activities and communications that occur—that includes documentation and pictures of each job that was done to prove you’ve done the work completely and in a timely manner.
If something should happen and you need to make a claim, there are some important steps to follow. Here’s a list of things to do:
- Contact your insurance carrier immediately
- Take photos, record the details of the accident, and get witness information
- Collect all logs and information on the project
- Provide a complete copy of the contract and all changes and updates
- Let your insurance carrier and lawyer handle all communication
These are just some tips and suggestions to consider when looking at a snowplowing or other services contract. Talk with your attorney to answer any specific questions you might have. You can also talk with a Hortica agent about this and other businesses concerns. We look forward to hearing from you. Check out our website for more information about the coverages we offer and how we can make a difference to you.