Who Needs Snowplow Insurance?
Snowplow insurance is usually required by law or your snow removal contract. If you earn income by providing snowplowing services to either residential or commercial properties, make sure you're familiar with the local rules and regulations where you work. If you own a plowtruck and it’s used for commercial use, even if it’s just driveways, it’s important to have snowplow insurance in place.
A personal auto insurance policy typically does not include “for profit” snow plowing activity. If snow plowing for income or operating as a business, you should purchase a commercial policy that covers you for the complete snow plowing operation. We all know that trucks and snowplows are expensive. Being cheap about insurance can end up costing you a lot more. Make sure you have coverage in place in case you damage or have equipment stolen.
When it comes to snowplow insurance there are three main areas of concern:
- Coverage for damage of theft to the snowplow or truck.
- Liability associated with damage caused by performing the snow plowing.
- Your employees and hired and non-owned auto coverage.
Review what coverage options you need and what coverage limits will be best for your snow plowing business
- Business Owners Policy - As the business owner of snow removal service, you may qualify to apply for a Business Owner's Policy, or a BOP. A (BOP) could provide various protections for your snow plowing business including general liability, and loss of income coverage as a part of your insurance plan. Snowplow insurance can include a BOP with general liability, workers' compensation, commercial truck insurance and other coverages that provide protection against costly lawsuits.
When an insurance provider classifies your business as "low-risk" for General Liability and Property Insurance claims, they will sometimes bundle the two coverages together into a BOP. Business Owner's Policies are cheaper month to month than standard General Liability and Property Insurance policies, but they also offer other advantages. Usually, a BOP will automatically come with full-replacement-value Property Insurance coverage, which means you won't have to worry about replacing damaged or lost equipment with new pieces. In addition, some BOPs offer business interruption coverage, which helps you pay for the expenses that result from, property damage that forces you to temporarily stop business.
- Hired and non-owned insurance - If you have a snow plow business and there are other people out plowing for you on your behalf using their own trucks,(sub-contractors) make sure you add a coverage called Hired and Non-Owned. That is for commercial vehicles that you hire and non-owned vehicles used so that the liability from your policy extends to the operations for people that you hire to plow for your business.
Workers' compensation - Workers' Compensation Insurance helps snow removal companies pay for the medical expenses and at least some of the lost wages incurred by employees who have sustained a work-related illness or injury. As you may already know, Workers' Compensation Insurance is regulated by the state and is often required coverage for business owners, even if they own an ice and snow removal service that only operates a few months out of the year.
- Hired automobile insurance provides liability protection when you or an employee is driving a rented, hired, or borrowed vehicle.
- Non-owned automobile insurance provides liability protection when an employee occasionally has to drive his or her personally owned vehicle for business purposes. It assumes that the vehicle is not owned, registered, or contracted in your name or on your behalf.
However, Workers' Compensation Insurance doesn't have to be just one more expensive headache - it can save you and your employee’s lots of money in the long run. You and your employees are often driving in dark, icy conditions - which are an ideal situation for potentially disastrous accidents.
Even if you are the sole proprietor of your snow removal service, you can benefit from Workers' Compensation Insurance as well - with this coverage, you won't have to add medical bills on top of the revenue you may lose while you recover. If you do have employees working for you, it’s a pretty good chance you’ll need workers compensation insurance for those employees. Your state department of insurance is a good starting point coupled with your licensed agent.
- General Liability Insurance - For owners of snow removal companies, General Liability Insurance can help protect your seasonal business from third-party claims that allege you or one of your employees damaged someone's property or caused them physical harm. For example, if you damaged a parked car in the process of plowing a residential street, the car's owner could end up suing. General Liability Insurance can help you pay for the resulting financial consequences of such a lawsuit by covering your legal defense, settlements, judgments, medical bills, and any other court-related fees. Without General Liability coverage, many startup, and smaller snow removal services are not be able to pay these expenses, which means business owners might have to dip into personal funds or shut down the operation all together.
- Property Insurance - Property Insurance helps ice and snow removers replace or repair property that has been lost or damaged due to "common perils" such as…Fire, Theft, Wind Storms. Many landscapers throughout the country turn to ice and snow removal in the winter in order to supplement income. Chances are you have offices or storage space for your winter-weather gear, including salt rock and other de-icers, plows, shovels, pushers and snow blowers. In the event that any of these items is damaged or lost in an accident, Property Insurance can reimburse you for either their cash value or their full-replacement value.
Commercial Auto Policy – Snow plowing is your bread and butter all winter, which means you're on the road a lot in less-than-ideal driving conditions. You might be making the roads safer for the community - but that doesn't mean accidents can't happen to you.
- A cash-value plan is cheaper, but you'll only be reimbursed for your property's depreciated value.
- Full-replacement-value plans are a bit more expensive, but you'll be able to replace your damaged or lost items for as much as they are currently being sold for.
Commercial Auto Insurance can cover any vehicle you use for work-related purposes and your snowplow can usually be included in this coverage. Some of the situations than can be covered under a Commercial Auto Insurance policy include…
- Your vehicle crashes with another vehicle - you are protected whether it was your fault or not.
- Your vehicle collides with a non-moving object, like a light pole.
- Your vehicle is subject to vandalism.
- Your vehicle is stolen.
- Your vehicle sustains damage due to a natural disaster.
In the event of any of these incidents, your Commercial Auto Insurance policy can help pay for vehicle repair or replacement, medical bills, and any resulting legal costs up to coverage limits.
- Umbrella Insurance - With an Umbrella Insurance policy, ice and snow removers can increase the effectiveness of their business insurance plan. This type of coverage can extend the limits of several of your primary policies - including General Liability and Commercial Auto. Umbrella Insurance acts as a safety net in the event that your snow removal service faces a claim that exceeds your policy's limits. Say you have a Commercial Auto claim worth $150,000, but your coverage limit is $100,000. A business owner without an Umbrella policy would be held responsible for making up the difference out of pocket. In addition, if your business cannot foot the bill, then you may have to dip into person funds or sell off equipment until the debt is repaid.