Summer weather may be lingering, but the Old Farmer's Almanac is predicting a frosty 2023-2024 winter season.*

While the forecasted flurries are good news for all the snow bunnies out there, it also could mean a very busy season for snow plowers if predictions pan out; it's worth noting however, that the Almanac also predicted a snowy season in 2022, which didn't materialize in the Northeast.

It's always best to be prepared, however, so now's the time to get your snow plow clients ready for the upcoming renewal season by discussing General Liability (GL) rates and submitting applications early for their snow removal operations.

Steady General Liability Rates

Snow removal is a tough risk due to the frequency of slip-and-fall claims and the litigious environment in certain regions such as New York, New Jersey, Pennsylvania and Connecticut. As a result, over the last several years we have seen significant rate increases to reflect carrier underpricing and losses.

"However, because the 2022-2023 winter season in the Northeast was relatively mild, we expect to see flat rates or slight increases, 5% to 10%, for upcoming loss-free renewals," says Dennis Pellegrino, RPS area president.

While this is good news for insureds, it's important to note that one carrier recently announced it will no longer write new submissions in this class of business and is quoting renewals only.

"With fewer markets available, it's wise to send submissions early in the event other carriers also decide to limit their risk appetite," advises Pellegrino.

Beyond the Northeast, more markets are available, and GL rates are lower, according to Pellegrino.

A Ray of Sunshine in Today's Litigious Climate

On a positive note, New Jersey upheld the "ongoing storm" ruling, which requires business owners to remove snow and ice within a reasonable period of time after the storm has ended.If someone slips and falls while the storm is actively taking place, the property owner in theory would not be legally responsible for the accident, and, in turn, the snow plower would also not be liable. Other states also apply the ongoing storm rule.

Dig Deeply into the Snow Plower's Contract

Snow plowers should understand their responsibilities and why having adequate insurance in the event of a claim is critical. The contract between a snow plower and a property owner typically outlines the obligations, responsibilities and terms of the snow removal services provided.

While the specific terms can vary depending on the agreement between the parties and local laws and regulations, typically an indemnification and hold harmless clause is included. This clause defines the responsibilities of each party in case of accidents, property damage or injuries related to the snow removal services. In many contracts, snow plowers agree to indemnify and hold the property owner harmless for any claims involving a slip and fall in the area they plow.

Limits of Liability

A small snow plower will usually carry limits of $1 million per occurrence/$2 million aggregate.

"Those plowing for large entities like big box stores, stadiums, hospitals and surgical centers, and other similar locations will typically require higher limits of $5 million, which the snow plower usually obtains by purchasing an Excess policy as well," explains Pellegrino, noting that airports and others may require even higher Excess limits.

Early Submissions Go to the Top of the Pile

When sending your snow removal submissions, be sure the required information is at hand for underwriters to analyze, including the following:

  • Completed ACORD application
  • Snow plowing supplement
  • Current valued loss runs (typically three to five years' worth, although some carriers require a seven-year accounting)
  • Copies of the insureds' contracts with customers
  • Precise details — including addresses — about the properties or locations to be plowed

RPS has several markets for snow plowers, including an exclusive snow removal program for small to midsize businesses.

Get the Snow Plowing Program Supplemental Application.

View Now

Sources

*"The Old Farmer's Almanac Winter Forecast 2023-2024," Almanac.com, accessed 12 Sep 2023.

Contributor Information