Snow removal insurance is a key insurance type that relevant businesses need to purchase before plowing any streets this winter. It can provide critical protection against lawsuits, damages, and other claim types that can keep your business operating for years to come. But what factors impact your snow removal insurance coverage?
Well, before we dive in, let’s take a closer look at what snow removal insurance is and what policy types are available to offer snow removal coverage before looking at the six key factors that determine your policy’s cost.
What is Snow Removal Insurance?
Snow removal insurance, or snow plow insurance, is a seasonal liability insurance policy type. It provides short-term customized coverage options that help snow removal businesses protect themselves from expensive payouts relating to damages or liability claims. Snow plow insurance can fall under your pre-existing general liability policy in some cases, but often it must be specifically endorsed before you are granted coverage.
Insurance Types for Snow Plow Coverage
Snow removal insurance is a supplement policy type that provides very specific coverage for your business. There are several different insurance options you may already have that can protect you against snow plow-related damages, but it’s important to note that they have key limitations that may require you to invest in a specific snow plow policy to get the coverage you need.
Commercial General Liability
Commercial general liability insurance is one of the key insurance types for business owners. It protects businesses from claims that may arise if an individual suffers bodily injury or property damage as a result of your business’s functions by compensating you for legal fees, medical expenses, and assorted repairs. Some policy types include coverage for snow plow businesses, but they tend to have more generic protections that may not meet all of your needs.
Equipment and Tools Insurance
Equipment and tools insurance, also known as contents coverage, can help you cover costs associated with repairs and replacements for the tools and equipment you use. This policy will be affected by whether you lease, borrow, buy, or rent your equipment and may include specific insurance requirements for breakdowns relating to mechanical or electrical issues.
Commercial Auto Insurance
Commercial auto insurance covers the vehicles you use for your business. This can include repairs, replacements, and car accident costs for most policies, but the coverage you’re eligible for may be impacted by whether you use a business vehicle to plow snow or if your employees use their vehicles on the job.
Pricing Factors in Snow Plow Insurance
Snow plow insurance is expensive, plain, and simple. This is largely because of the heavy risk associated with the work, so the cost of your snow plow insurance policy will depend on a number of different factors that relate to both the kind of protection you need and the level of risk your business is determined to have.
If you’re plowing snow as a business, you’ll need to consider each one as it pertains to your policy before determining which coverage options will work best for you.
Industry Experience
The more experience you have working in the snow plow industry, the better chance you’ll have of lowering your rate. Experience shows insurers that you know what you’re doing and will be far less likely to make a mistake that results in an accident or injury than newcomers to your business.
Business Revenue
You might think that bringing in as much revenue as possible would be a no-loss situation for your business. However, the more revenue you generate, the higher your business’ risk of liability claim will be which can significantly increase your insurance rates.
Employee Count
When you have several employees, your chances of staff-generated liability claims also increases. And the more opportunities you have for claims to be filed against you, the higher your insurance will cost.
Insurance History
If your insurance history shows that you have a pattern of costly insurance claims and damage issues, your policy will reflect the level of risk your insurer has to take on when providing you with a policy. But if you don’t have a dense claim history, your business will read as a lower-risk coverage investment to insurers and they may grant you cheaper policy rates.
Plowing Locations
The specific areas you plow can make a huge difference in the kinds of insurance options you’re eligible for. If you’re planning to plow city streets and other roads, for example, your policy may require less coverage than if you were to plow commercial parking lots. Similarly, you will need a different policy type if you plan to contract your services to your city, county, or state to plow highways.
However, if you’re only planning to plow a few driveways for friends and neighbors, you may not need additional coverage. In that case, your insurance needs would likely be met by your existing auto policy. It’s important to note that this only applies if you don’t charge for your services.
Additional Services
Any add-ons to your services including sidewalk and roof snow removal will likely result in increased insurance requirements because you will be adding more opportunities for risk to your business. Make sure to discuss exactly what services you’re planning to offer with your insurance agent so they can help you get the coverage you need.
How to Get the Best Rates
There are a few things you can do to make sure you’re getting the best snow plow insurance rates for your area. Primarily, you want to lower your risk factors as much as possible as risk is the biggest factor in determining your policy rates. You may also want to consider comparing quotes and bundling your policies for a chance at discounted rates.
Do You Need Snow Plow Insurance?
If you’re running a snow plow business this winter, don’t forget to load up on all the insurance protections you need. Take the time to consider each of the key factors that can impact your business’s insurance needs from location to employees to service offerings, and chat with your insurance agent to make sure you’re getting the best rates on your snow plow insurance today.