Don't let your profits slip-slide away.
When there’s a chill in the air, does the thought of liability lawsuits loom in your mind? If not, be prepared for a long, cold winter that might cost you more than last summer’s profits—it could cost you your shirt.
The culprit: snow and ice, those natural elements that cost grounds managers, snow-removal contractors and their insurance companies anywhere from $10,000 to nearly $1 million per lawsuit. As our society becomes more litigious, lawsuits that might never have been filed years ago are becoming more pervasive.
“We live and do business in a litigious society,” says John Allin, owner of Snow Management Group in Erie, Pa. “When people slip and fall on a site they automatically think they should be paid some money. Unfortunately, it’s up to us, as people who are maintaining the grounds—whether it’s me as a contractor, or the university or the municipality—to prove that we have done what was reasonable and prudent in protecting people walking or driving on that site. You can’t do that by saying, ‘Hey, we were out there. Trust me.’”
As many “snow guys” know, the solution isn’t just carrying enough liability insurance. In fact, because so many snow-removal firms have banked on their insurance in the past, rates have now reached astronomical levels.
Frank Lombardo, president and founder of snow-industry consultant firm Weather Works, warns against assuming liability based on the fact that the majority of liability cases are small enough for insurance companies to settle out of court.
“This hurts the contractor because his rates go up,” explains Lombardo. “If an insurance company settles on your behalf—say it’s a $10,000, $15,000 or even $20,000 claim—it’s going to adjust your premiums. Also, there’s been a problem, especially in Canada, with a diminishing number of insurance companies that write insurance for snow-removal companies. In Canada they’ve diminished from 40 a couple of years ago to one or two now. And they’re shrinking in the United States also.”
Fewer numbers of insurance carriers hit snow professionals with a double whammy—less competition among insurance companies means even higher rates. While this will realistically cause some smaller operators to quit the snow business altogether, some will continue removing snow and ice without any liability coverage. But most understand the potential for catastrophic losses, understanding that adequate liability insurance will cover their back end just in case a “what if” becomes an “as if."
But how much insurance is enough? According to Allin and Lombardo, for the smaller snow-removal operation, a $1 million policy should suffice; for larger, more complex operations, such as in-house operations handling projects like municipalities and college campuses, the target policy is $2 million or more. If this sounds steep, especially if a well-conceived winter maintenance plan is in place, consider the overriding reality: Despite the advanced forecasting technology at managers’ disposal, the weather is still as unpredictable as the evening news.
“Weather itself is not very scientific,” says Allin. “No matter how good the weather predictions are, the weather will do whatever it pleases. I don’t know if forecasting the weather will ever be an exact science, because you can’t tell when a tornado is coming up—you can tell when the conditions are right for it to happen, but you never know when exactly it is going to happen. And snow’s the same way.”
Allin has his share of liability concerns. Operating in 29 states, with 2002 revenue of just under $40 million, Snow Management Group will be running approximately 8,500 pieces of equipment moving snow this winter. But Allin knows that money made can just as easily be lost in a frivolous lawsuit. Easily, that is, if the claim isn’t shot down with solid proof to the contrary.
On the slippery surface of a lawsuit, the proven way to get a grip is keeping good records.
“People who are self-performing this work, the in-house operations, don’t realize that they need to think along the same lines as the contractor does,” says Allin, “when it comes to protecting themselves in the long run.”
Lombardo’s company investigates weather conditions and determines whether a contractor is liable for damages. This is ascertained from meteorological reports, taking into consideration how much notice a contractor had during a given storm. But with incomplete records, the contractor goes into a dispute empty-handed.
“It’s amazing,” says Allin. “I’ve done expert witness testimonies for a couple of universities, where I go in and there are virtually no records whatsoever. They have no clue what took place on that day. So they have to pay me to reconstruct what happened based on weather reports and interviews with the people who were working there at the time.
“They need the same paper trail their contractors need in order to defend and protect themselves. Some of them don’t realize, they don’t think about it.”
What is lacking more often and most critically, however, is protection within the contract. As all contractors are eager to build a backlog, many are too quick to jump at a job, and making unrealistic promises is a common trap laid for future demise.
“Grounds managers are trying to avoid slips and falls, yet they need to structure their contracts better,” says Lombardo. “If they promise to do work, they’re obligated to do the work that they promised to do. But they shouldn’t promise to do the impossible—a lot of them do. Some will promise to keep a property free and clear of any ice. That’s impossible!”
As amazing it may sound, an avalanche of lawsuits is lost because of a lack of certain language needed to protect the snow and ice manager or contractor.
“Lawsuits generally center around poor contract specs,” says Lombardo. “The language within their contracts generally lead the contractor to become more liable.”
An important element of contract language is the clear communication of who assumes responsibility to make the call for snow or ice removal. Who decides to call service to the site needs to be specifically defined, a non-variable within the contract.
“We’re mostly hired by insurance companies that are defending contractors,” says Lombardo. “Unfortunately, a lot of the work we do isn’t helpful to the contractors because they don’t follow through with their contract language. Most of the work we do are dissent reports.”
“From a liability standpoint, the contractor should be as well versed in snow and ice management as anything else with their grounds maintenance,” says Allin.
Grounds managers and landscape contractors “need to understand enough about snow and ice to use the tools of the trade correctly,” says Dale Keep, owner of Snow & Ice Technologies, LLC, in Walla Walla, Wash. “This includes chemicals that are often misused and overused.”
Education is essential, according to Keep. “Understanding that snow and ice control is more than just pushing snow is critical to success and profit margins. This understanding typically cannot be avoided unless there is training.”
In fighting ice, Keep cites one example of the “tools of the trade” as “the application of chemicals ahead of the storm.” Yet this process, if done correctly, always involves taking some variables into consideration, thus the necessity of training. Keep also understands that lawsuits in the industry are best defended against when there is adequate training.
Of all the various de-icing products on the market, there remains one caveat: they only work if they’re used as directed. Because of the myriad conditions to be tackled, there is no cure-all product. Allin says that managers continue to seek out “something that will take care of all ice conditions under all temperature ranges. It’s not out there; there’s nothing that universal yet. So you have to use the best product for the conditions at that particular site. Unfortunately, a lot of times, the best product on the market today is the one that their supplier has on the shelf, whether it’s the right product or not. That’s a huge problem.”
Whatever the product, no matter liquid or granular, snow and ice managers should read the directions and become schooled about which conditions each product is specifically suited. Though this may sound like overstating the simple, “It is a constant, ongoing battle when it comes to educating the people using the product as to whether they’re using the right product,” says Allin.
“It’s not just a matter of throwing the rock salt down and hoping it works,” says Allin. “The technology in the industry, especially the de-icing industry, has come a long way in the last 10 years. People simply have to become more educated about what they’re doing. The snow and ice industry is for intelligent people who are using the right products, products that are designed to be used under certain conditions.”
Resources for knowing what to use, when to use and how to use de-icing products can be easily attained from the Internet or from most state-based highway departments. One such resource, the Federal Highway Administration’s Manual of Practice for an Effective Anti-icing Program (FHWA manual), can be found at www.fhwa.dot.gov. This 69-page report is based on research conducted by the U.S. Army Cold Regions Research and Engineering Laboratory, using 15 states to test various anti-icing materials and techniques.
Another essential element in becoming more educated is keeping a keen eye on the sky, or the television.
“We recommend that contractors stay on top of the weather,” says Lombardo. “If there’s any notice of any type of severe winter weather, they need to have the materials available, the manpower available, and be in place before the event begins. If they’re there, but they don’t have the manpower, they’re still liable if something occurs.”
Other resources include contract weather services. Some of these services will e-mail or page a snow and ice manager when an event (i.e., storm) is pending. Managers can now get access to constant radar-loop updates from such weather services. And there’s always trusty online sites featuring advanced Doppler imaging, such as the National Weather Service (www.nws.org), the Weather Channel (www.weather.com), and many local news sites.
Using these tools gives managers sturdy resistance against potentially devastating lawsuits. Allin believes the court system is becoming “a little bit more cognizant of the fact that people who voluntarily venture across areas that have snow and ice have to assume some of the liability exposure, because they have taken it upon themselves to step out there.
“The courts are becoming a little more reasonable, but as long as we do what is reasonable and prudent, we can still share in the liability without being totally exposed to it.”
Tracy Powell is a freelance writer who lives in Jeffersonville, Ind.
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