About 80% of my law practice is devoted to legal representation and/or consulting work on behalf of snow and ice management companies. Throughout this work, a number of recent trends have developed, resulting in significant discussion with my clients concerning recommended activities. These areas are discussed below.
Insurance Coverage must include snow clearing services – the cost of insurance coverage for snow clearing operations has significantly increased, and resulted in difficulty for many smaller companies in securing coverage. I have recently come upon a few snow clearing companies operating without insurance coverage for snow clearing, anticipating any claims will be covered by a general liability policy covering landscaping activity. Please do not make this error, many general liability policies issued to landscaping companies contain an exclusion for snow clearing operations. Any claim brought under one of these policies arising from snow clearing activities will likely be denied, and you will find your company without insurance coverage for the claim. Forgetting the significant potential cost of defending a claim without insurance coverage, you expose the assets of your company, and potentially your personal assets, to a judgment if you do not have appropriate insurance.
Reduce important communications to a writing – snow and ice management companies are relying upon cellphones and text messaging to communicate with clients more than ever. While the convenience is fantastic and communication often instantaneous, it is sometimes very important to have a record of a discussion. An example I keep seeing in my law practice is a customer who refuses to allow treatment for a minor snow event, but brings a claim against a snow company when a person later slips and suffers injury on an untreated area. It is extremely important you document any refusal by your customer to allow treatment. The documentation can be as simple as a one sentence e-mail or confirming fax to your customer. In this economic climate with snow budgets reduced, it is not unusual for a customer to refuse treatment, and it is extremely important to make and keep documentation of same.
Understand the service your customer is seeking – it is important you communicate with your customer, and have a clear understanding of the service required by your customer. Numerous recent lawsuits brought against some of my clients have resulted from a miscommunication concerning the responsibility of my client to clear a certain area of premises, or return for follow up inspection. I strongly suggest a meeting with your client on the premises in advance of the snow season, to discuss the services required by your client, and to discuss any special characteristics of the premises. Be sure to document the services you are required to provide, preferably in a contract executed by all parties. Relying upon an oral agreement is simply silly, not because someone will try to fraudulently change the agreement, but for the very real possibility there will be a honest misunderstanding concerning the agreement.
Collecting money from clients who are severely behind in payments can be a tricky issue – some of my clients are experiencing payment issues with long term customers. There is an effort not to lose a customer, but there is also an effort to be paid for the services my clients are performing. Initially, my clients are usually having account managers contact the customer and present a friendly request for unpaid balances. After a few unsuccessful requests, I will intervene, sending a polite letter to the customer requesting payment. The second letter from my office usually includes the suggestion of litigation, and at that point, the business relationship between the snow management company and its customer is usually terminated.
Higher only competent vendors – more and more of my larger clients are subcontracting outwork. It is very important you make sure any subcontractor is qualified. Do not make the mistake of hiring a subcontractor or vendor without meeting a representative of the company you are hiring, and securing references, and checking with those references. As the company hiring a subcontractor, you have potential responsibility for the failure of the subcontractor to perform services. You do not want to find yourself in the position of losing a valuable client because you did not do your homework when hiring a subcontractor.
Be careful with insurance if you are working for a big box store – big box stores are becoming increasingly sophisticated, and demanding a complex set of insurance coverages be supplied by their vendors. Failing to supply the required coverage can result in significant problems if a legal claim is brought, including suits by the big box store against your company and your insurance company. A week does not pass that I do not encounter a lawsuit or threat of a lawsuit involving the perceived failure of a snow clearing company to secure proper insurance coverage. Make sure you have an excellent insurance agent or broker, and make sure this agent or broker is supplying all required insurance coverage. Importantly, if a contract requires you to name your client as an additional insured on a policy of insurance, make sure your agent or broker supplies a certificate of insurance properly naming your client, and supply a copy of the certificate to your client. Please do not wait for a claim for property damage or personal injury to be brought before you check to see if you secured the proper insurance coverage.
When working for a condominium association – make sure you have a clear line of communication to whomever controls snow clearing services. Not surprisingly, as condominium association attempt to control costs and expenses, they are limiting snow clearing and deicing activity. There are also conflicts among members of the association concerning authorized services, and it is not unusual for a resident to call a snow clearing company directly, asking why services are not performed, without knowing the association has refused or restricted services. Do not allow your company to become caught in the middle of a dispute, and make sure you have a clear understanding of whom is permitted to authorize services within the association.