Assuming risk from start to finish

By Darryl Beckman

The next time a contract is placed in front of you, read it closely. Fairly simple only a few short years ago, contracts for snow clearing have grown in length and complexity.

There are a number of significant and noteworthy trends I have come across in reviewing these contracts. These trends directly affect the daily operation of your business, including imposing the requirement to defend and settle claims brought against the client.

1. Who is responsible for follow-up inspections? Snow & ice management companies are almost always charged with responsibility for inspection on the days following storms. Do not take this responsibility lightly. I estimate more than 80% of the legal claims I defend arise from slip and falls occurring on the days after storm events. Property owners and management companies are fully aware of this and have crafted contracts to place responsibility for follow-up inspection on the contractor performing the services.
2. How long must inspections continue? This is very important. Property owners and management companies are imposing open-ended inspection responsibility in their contracts. Essentially, there is no defined limit on the length of time the snow & ice management company must return to the site to inspect after a storm. Unless the contract explicitly contains a time limit for inspection, such as 24 hours after completion of a storm, the contractor has an open-ended responsibility to inspect.
3. When must inspections begin? This is not as simple as you may believe. A trend in recent contracts triggers responsibility to inspect whenever the possibility of ice formation arises. This inspection responsibility is not necessarily tied to a storm event. Look for this responsibility in any contract. If you sign it, your company is essentially accepting the duty to monitor the site on a daily basis throughout the winter season, regardless of whether you perform snow clearing services.
4. Defense and indemnification. Every contract I see contains a clause requiring defense and indemnification of the property owner and/or management company. Disputes frequently occur when deciding whether a claim is because the snow & ice management company failed to properly perform services. It is extremely important that you fully understand the contractual language requiring defense and indemnification.
5. Who must defend against a lawsuit? Property owners and management companies consistently demand that the contractor hire legal counsel to defend them from any lawsuit arising from an injury on snow and/or ice. Essentially, this calls for the contractor to pay all costs for the legal defense of the property owner and management company. Many property owners and management companies take the position that any claim triggers the duty to defend—regardless of whether or not the contractor did anything wrong.
6. Who must pay any verdict or settlement? Property owners and management companies consistently demand that the contractor pay any judgment or settlement arising from an injury on snow and/or ice. The legal term for this responsibility is indemnification. Essentially, indemnification calls for the snow and ice company to pay any money the injured person receives. Once again, many property owners and management companies say that any claim triggers the contractor's duty to indemnify, and it simply does not matter if the snow and ice management company did anything wrong.
7. Additional insured requirement. Property owners and management companies demand that they be identified as an additional insured on the contractor's policy of insurance. The property owners and management companies are taking the position that their insurance company should not pay any money in investigating, defending or resolving a claim.

Read all contracts and, if necessary, hire an attorney to explain any language you do not fully understand. It simply makes good business sense.

Darryl S. Beckman is counsel to the Budd Larner law firm, and in the litigation group of the firm's Cherry Hill, NJ, office. He represents and advises many large and small snow and ice management companies throughout North America.