Anyone finding insurance premiums crazy if you do snow removal? I notice a lot of smaller contractors getting out of snow removal because of higher rates. My boss was telling me yesterday that his broker was pressuring him to get away from snow removal as his premiums would take a large drop. He says it hasn't reached a point yet where it's not worth it, as we have so much plowing, but it does eat up a big chunk of money.
Of course we don't do snow plowing here but our insurance on trucks has skyrocketed in the last few years. Insurance for 5 pickups, 1 service truck, 1 L9000 dump and 6-7 trailers is as much as our General Liability for $2M worth of coverage. All of us have great driving records with no claims that we were at fault with. Is the increase for snow plowing on the auto side or the general liability side? I have no idea of the Canadian insurance rules and regs but we're seeing similar in the market here.
In the last 10 years or so there has been a switch to the contractor taking the liability in the parking lots for slip and fall injuries. Most of it comes down to paper work and records. The guy that looks after the plowing for this company is pretty methodic with his record keeping. He records temps , and conditions at different times of the day, what time it started snowing, start and stop times for plowing, when it was sanded, when the sidewalks were done, how much salt or calcium was used. There was one attempted lawsuit years ago, but it was decided based on the paper trail, that everything was done that could be done, and there was no case. We have a lot of manpower and equipment to make sure that stuff gets done. Obviously most private driveways, and smaller businesses do cash deals, but a lot of smaller contractors ar getting out of the plowing business all together because of increased liability insurance. Like I said, the broker wants us to get out of snow removal for big savings. It hasn't come to the point where there is no money being made, but it takes a big chunk. Plowing helps carry the overhead costs between winter projects, as we do the bulk of our work from June to December
That would drive insurance premiums up. I see how the smaller operators would bow out.
In other business areas the big boys here in the USA would set up a LLC or corp with no assets to collect the payments, then farm out the work to independents. Sweep the payments to the owners of the LLC regularly, then stiff the independents and disappear.
I would have to say the insurance industry is a big scam. People need to take responsibility for their actions and stop blaming everyone else. Insurance prey's on people that won't accept their negligence and take responsibility for it. This way we wouldn't have the need for insurance.
I heard that recently here too, it makes no sense it just means there will be more guys doing it without proper insurance. Even though I have no claims and clean record my insurance rates have went just stupid last few years. I've never done snow removal because it pays nothing and it's an awful job, if insurance rates are jumping a ton, you're loosing money trying to do it.
I asked my insurance company that I have liability insurance through for an estimate, and she told me 15-25000 dollars. Then I phoned another insurance company that I had liability insurance through for many years with no claims for a quote and he told me sorry no new snowremoval contractors. Too bad . So Sad. Simon C
That's insane, I pay about $4000 a year for 2m liability for excavation and demolition, why the hell would snow removal be 4-6x that amount? You'd have to bring in a million in snow removal revenue to justify that kind of insurance. I will bet anything rates haven't jumped a dollar. Big companies i'm betting if they haven't had claims didn't have rates jump too bad, and there will be no shortage of guys doing it without proper insurance. At $300/month for a small lot you need a TON of them to even break even never mind make anything.
The thing about the liability shifting is odd to. Many years ago my Dad did snow removal, and it was monthly mostly but it was clear parking lot only no sidewalks, no sanding, no salt. Unless a business is doing everything and including that stuff, how could they have any liability if someone falls in a icy parking lot? There is no way they would be liable. I am baffled that there is always no shortage of people willing to work for free to do it though. Unless it doesn't snow much if at all you're loosing money, and in those cases you have a hard time collecting, if you get paid at all because people say "it didn't snow i'm not paying you". From what I remember about what my Dad charged out, one trip a month and you would do good, 2 trips you were ok if they weren't too big of snowfalls anything more and you were loosing money. Hard to make anything at $200/location.
I don't know what your parking lots look like up north, but down here the architect thinks there have to be speed bumps, curbs, trees, cart corrals, and other things to plow around.
Looked into it years ago and the snow plowing rider cost as much or more than the yearly premium for commercial. Supposedly it's because of all the claims made: parking lot features getting damaged, people claiming the contractors damaged their cars, contractors actually damaging cars in the lot, etc. But the customers always go with the cheapest bidder, insurance or no.
We call those types criminals here
Back when I did snow removal it was explained that the insurance is higher because you can't see what's under the snow. Having done a few jobs where larger equipment was brought in, I can certainly see their point. Broken out sections of curb, bent electrical boxes, etc. I would always slowly go around the perimeter to know exactly where any obstructions would be before I went into a more production pace. I hated speed bumps, especially the temporary ones that were put on using large nails. You barely touch them and the nails would pull out a bit.
We are not forced to take the personal liability. If you are willing to take the risk on, it increases the amount that the company will pay for the contract. We have never had a claim that way. Anytime there is damage done to property, it is just cheaper to pay out of pocket. Concrete, grass or asphalt damage, we just fix it ourselves. But the insurance companies, just don't want us plowing. We are one of the larger companies in the area. The sub company that looks after the walmarts in the province tried to get us to drop our price a couple years ago. We said no, so they went another route. The guy that took the job lied about his assets. The first storm was a wet heavy one, and the guy had a bobcat, and a halfton truck with a plow. It was a disaster. They ended up giving us what we wanted. If it was me, I would have asked for even more. I'm sure if we were gone, someone else would step up, but for now, we have our own sand, sanders, skid steers for sidewalks truck plows, a dozen loaders or so, winter tires for all of them, 8 or 10 guys to shovel and salt sidewalks. One contract that we got last year is an apartment complex. The former guy had a farm tractor with a bucket and blower, and they asked him to take the liability clause. He didn't want it, so he bowed out. We get him to blow the banks back from time to time. the property borders on a horse field, and the owner doesn't want me to dump over the fence, but has no problem with the blower.
Per my insurer I cannot even drag blade a neighbors drive with my 180 anymore as they will NOT cover liability during snow removals.
Company i work for has 16 or 18 tractors on the road with the smallest been 110hp and 4 loaders. We do everything from a few thousand residential houses, small commercial lots and large shopping centers and factories. Boss man sure dosent look like he is hurting when he pulls up in his denali pick up coming back from his ski cottage. Guess our rates cant be that bad?
The public needs to understand there is a obesity problem. Be a hero grab a shovel and work that flab off one scoop at a time clean their act up and don't be a slob get a hair cut and get a real job.
I use to do a hand shoveling route doing all the walkways. Best i ever did was 10 hour and longest was 17. It averaged about 12 or 13 hours and thats none stop i brought my coffee and food with me and had it while i drove. I was also 190 pounds and a lean mean shoveling machine. Now im 210 and a lazy slob in my tractor. On another note i was out last night plowing and looks like i will be back out tonight since they are calling for another 6 inches
Doesn't mean they are making money. There is plenty of companies with 10+ million in assets that one day the bank comes knocking and everything goes to auction, when you're that size you can rob peter to pay paul and loose for a few years before the house of cards falls. Not saying this is the case there, but from every single owner i've ever talked to not a single one has said they do snow to make money, it's break even and keep their good guys busy best case, they'd much rather just close up for the winter. The only time it's ok is hauling by the hour. There is just too many skidsteers around not working in the winter that everyone will cut each others throat to do it for nothing. Other issue is many guys will take on way more contracts then they can handle banking on not much snow, and if a huge dump comes clean the best paying one's, hope they can get to them all to still get paid and if not just walk away from the bad one's.
In the summer we are 8 guys and the winter 24. Around here i have never seen a skid steer plow snow other then doing sidewalks that a tractor a loader cant get on. Hauling snow doesent make any good money here since the hourly rate is even lower then summer time. I guess its a different deal here since snow removal is taken seriously.
Around here they just leave it till it becomes a disaster. Spray chemicals on it so it melts then freezes at night so it will bust the road up create 8" deep potholes tearing up tires knocking frontends out of alignment creating work for towing companies and tire shops and work for city county people patching the holes. Vicious cycle.
My boss won't bid any street plowing, hence my grader sits every winter. He says after years of doing it, it's just not worth it. I plowed for a company before I came to work for these guys. They had mostly junk. I ran a 1974 Cat 14E. This was in the 90s and they had 4 graders on with the city for 45 bucks an hour each. Last time the city came calling. My current boss wouldn't even entertain the thought for less than 100 bucks and hour. Government wanted to hire me one winter, said he wouldn't go for anything less than full government rate, and he wanted assurances that he would get enough work to cover the cost of changing to winter tires, and putting the wing on. They were in a bind, as they had a bunch of equipment down so I got around 10,000 worth of work and then they didn't call again. Most of our plowing is unchanged, and they have had the same spots for years. They won't take on any private driveways, and just do ones that have been customers forever. I do one old fella that they have been plowing since the 60s. For now, the insurance rates are not high enough to drop the plowing, but it's bad for the little guy. I think most have no insurance at all. Everyone and their dog as a farm tractor with a blower. If the tax man wanted to, he could have a field day. My neighbor is a retired cop, and he has 2 tractors, 2 truck plows. Says he does well enough to makes his payments all year round, pay 3 guys cash money make a wage for himself, and put some money in the bank. That tells me he has no insurance. I don't think one of his tractors even has plates on it.