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Snow Removal and Insurance

We are at the time of year when you can hear a symphony of snow blowers as you eat your breakfast. Maybe this is the year you decided to hire a snow removal company to take care of your driveway and walkways. You shopped around and found the best deal. You saved a few hundred bucks. Time to sit back and let the snow fly. Just don’t ask yourself how you ended up with a price that is too good to be true.

In your search for a snow removal company, you asked about price, you may have even asked how much snow has to fall before they come. But, like many others, you have completely forgotten about asking two essential questions of the contractor you hire:

1. Can I please have proof of insurance
2. Can I get a WSIB clearance certificate

If you neglected to ask these questions, you may have left yourself open to some major liability. If they don’t have either of those forms of insurance, if the worst possible thing happens, you could be stuck with a bill in the millions. Suddenly, that $200 in savings doesn’t look so good.

Why Wouldn’t a Snow Removal Company Have Insurance?

“But contractors need to carry their own insurance!”, I hear you saying. While contractors are required to carry insurance and WSIB coverage for their employees, not all do. WSIB Premiums can range from 4% to 7% of total payroll. Even for a small business, that commonly results in a $2100/month, on top of the payroll expense.

Then you have to add in the cost of private insurance coverage. The Industry standard is to carry a minimum of five million dollars in general liability. Over the last few years slip and fall legal claims have caused insurance for snow removal companies to double, in some cases. Companies have seen their insurance premiums go from $16,000/year to $60,000. To absorb that kind of increase you would need a 4x increase in business!

The rising cost of insurance, coupled with WSIB, makes it very difficult for some smaller snow removal companies to stay in business. It could create a scenario where a contractor simply decides to take a gamble and not get insurance or, for some smaller operators, they may not even be aware that they need specific insurance for snow removal!

The Dangers of a “Discount-Priced” Snow Removal Services Company

Now that you have all this information, you might be saying “how does this affect me?” The answer is: in a variety of ways, all of them severe.

1. The Real Cost Of Snow Removal

When you hear that rock-bottom quotes, take a breath, and do the math. If they quote $200 for the ENTIRE season , break that down. In our area, most reputable firms will calculate a season based on 30-40 snowfalls. Now divide that $200 by that number of snowfalls and you are being charged $6.66 every time they come out to clean out your driveway. Is that a realistic number? That price is hardly enough to pay for gas and equipment, let alone $14 and hour minimum wage and payroll taxes. Our advice: go find another operator. The real cost should be from $20 – $30 per snowfall.

2. No Insurance Means You Assume The Liability

Canada is becoming a much more litigious society. Slip and fall claims are a reality. They can cost an insurance company a 6-figure payout, not to mention the cost to the company of defending themselves. Imagine if your contractor didn’t have insurance – who is liable? The answer is you.

If there is a catastrophic scenario where someone does slip and fall on your property, or, worse yet, an employee of the service provider gets hurt and the company does not have WSIB, the responsibility will fall on the homeowner and their personal insurance. Some home insurance plans may not even cover these items. So if a visitor falls and breaks a leg and you are found negligent, you could be responsible for the payout, not the contractor you hired or your insurance provider. If an employee falls and is off work for an extended period, you as the homeowner could be held accountable, and on the hook for paying them.

We have heard the horror stories. One client of ours didn’t ask about insurance when they hired a previous contractor. He was happy he got a great deal. He learned the hard way that the price was too good to be true for a reason. That service provider took the front end off of his vehicle and simply left, never to return. Not only did they have the expense of fixing the car, they had already paid for the season of snow removal, and had to finish the winter shovelling their own driveway!

3. The Realities of Contractor Abandonment

Thankfully, property damage caused by a contractor is rare, however contractor abandonment is far more common than it should be. Halfway through a winter we get phone calls from people because the person they contracted to remove snow simply vanished, the number no longer works, and there is no way for them to get any recourse. In most of these cases the contract they signed was probably way too inexpensive and the contractor either got hit with insurance premiums out of the blue or realized they were going to lose money – so they simply stopped providing the service.

Protect Yourself: What To Ask Your Snow Removal Contractor

We are going to circle back to the two vital questions you NEED to ask your prospective snow removal contractor

1. Can I please have proof of insurance? Make sure general liability is greater than 5 million dollars. Any reputable company will be able to provide this to you without any issue. Make sure you are specific in asking for there to be a snow removal clause.

And

2. Can I get a WSIB clearance certificate? This is something that you can look up yourself. Here’s how:

a. Go to https://onlineservices.wsib.on.ca/Clearances/eclearance/start

b. Search by their Business Name in the Advanced Search. We searched for us. You will get a result like this:

c. You can then click on the Clearance Certificate Number to see the Clearance certificate.

 

By doing this you can ensure that your contractor has WSIB.

Now call up YOUR home insurance provider. Ask them if you have coverage in the worst case scenario. It is better to be informed than to be surprised – ignorance is not a legal defence.

Do not take a risk on a contractor who doesn’t have insurance. It is simply not worth it to take a chance.

If you are looking for a contractor that is properly insured, give us a call. We can take care of the snow removal for your rental, business, or home. We have a full fleet of vehicles and a professional, punctual team ready to take care of whatever winter throws your way.

Cheers and happy winter,

Chris.

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