Winter is fast approaching and that means companies are looking to hire their snow removal contractors. If you’re a landlord, own a business, or manage industrial or commercial properties then snow removal is vital to keeping operations running smoothly and minimizing liability.
Choosing the right contractor is important but a key factor transcends cost or equipment – it is whether or not they are insured.
Don’t Subcontract Snow Removal Without Verifying COI
To save money it might be tempting to pick the lowest bidder, but in the long run that plan may not pay off. Snow removal can be a big expense, but not as big as fighting a lawsuit. Don’t even consider subcontracting a snow removal company without verifying their Certificate of Insurance (COI).
What is a COI?
A COI is issued by insurance companies to verify that a company has an insurance policy, and briefly explains the policy coverage. If your snow removal contractor can’t provide you with a copy of their COI then you should not risk hiring them.
What does insurance cover?
Any legitimate snow removal contractor will have insurance that provides coverage for:
- Bodily injury – if someone is injured as a result of the contractor.
- Property damage – if any property is damaged in the course of snow removal (big plows in small parking lots have the potential to cause serious damage to cars, lampposts and other property).
- Worker compensation insurance – to cover the medical costs and lost wages of injured workers.
Unique to the industry, snow plow insurance is usually legally or contractually mandated for snow removal contractors. If the company is using a privately owned truck with a regular insurance policy you should know that is not enough; your contractor should have commercial truck insurance. In addition, snow removal contractors should also have some or all of the following types of insurance (depending on the vehicles they use):
- Tow truck insurance
- Low-boy trailer insurance
- Gooseneck trailer insurance
Simply providing a COI is not enough. It is also your responsibility to verify that the COI is valid, and that the coverage is sufficient to meet your needs. Unscrupulous contractors may even try to alter or fake their COI in order to scam business owners.
To ensure that your snow removal contractor’s COI is valid:
- Examine the COI for indications that it has been forged, changed, or otherwise tampered with.
- A vast majority of insurance companies issue COIs on a standard Acord 25 form. Any COIs without the Acord 25 designation should be treated as suspicious and warrant more investigation.
- Check the coverage dates to ensure that the coverage does not end until after the duration of the proposed contract.
- At the minimum the COI should cover workers’ compensation and general liability. Without this coverage the COI isn’t worth the paper it is written on.
- Ensure that the names on the COI match that of the contractor.
Any legitimate snow removal contractor will gladly answer any questions you have regarding the terms of their insurance. Some good questions to ask are:
- What type of work are you licenced and insured to do?
- Do you have workers’ compensation and liability insurance?
- Will you use subcontractors and are they insured? Can I see their COI?
- How much are you covered for? ($2 million is standard)
Get it in writing
you are satisfied with the certificate of insurance and your preferred snow removal contractor has answered all of your questions to your satisfaction you should still go a step further to protect yourself. Be sure to include provisions regarding insurance coverage in any contract that you sign – although it may be best to ask your lawyer or legal department for this.
Have questions about snow and ice management? Contact the experts at Garden Grove Landscaping for more information.
POSTAL CODE CHANGE: Please note that the Garden Grove Landscaping postal code has changed to L8B 1K5. Our 136 5th Concession location remains unchanged. Please edit our contact information accordingly.
Written by David Lammers
David Lammers is the president of Garden Grove Landscaping. Garden Grove provides Commercial Landscape Management Services across the Golden Horseshoe, GTA and Southwestern Ontario. David may be contacted at firstname.lastname@example.org or 1-866-996-1099.