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By Deb Matson, CSP
As a risk manager, one of the scariest trends I hear repeatedly is that business owners aren't reading and understanding the contracts in the market. Fewer customers are giving or accepting one-page contracts, and they are hiring attorneys to create their service agreements.Contracts are our lifeline, our clarity for services to be provided, our protection against lawsuits, and our layout for payments for services rendered. But while talking with fellow contractors, I found it amazing that our "lifeline" was being protected with handshakes, and a laidback thought process. Among the comments I heard at the SIMA 13th Annual Snow & Ice Symposium this year included:
- "I have had that property for many years, and my team knows it like the back of their hands. Quick signature on the bottom, and on the work list it goes."
- "I talk to the manager and we have an understanding."
- "At crunch time, I have 30-plus contracts to get out the door in a day ... there just isn't time to read every bit of small typed print."
- "That's what I have office staff for."
- "In 20 years, I have seen and read it all. I know what all the legalese and insurance clauses mean; I just have to scan it quickly, sign it and move on."
Contract tips
Have someone else not used to reading contracts read them before you—but not instead of you. Give a copy to your receptionist, and have her highlight what she doesn't understand or raises a red flag. If she hands it back to you with 50% of the contract highlighted, that is a good indication that a "reasonable" person finds the contract confusing—and it is the "reasonable" person who will be sitting in the jury box determining your fate if you're sued.
Warning signs
Look for keywords and phrases that warrant an extra look, or may be missing from the contract altogether:
Winter weather events
- Clarify what a "winter weather event" is. Is it snow-accumulating storms only? Does it include ice events, hail events, freezing rain? Be very clear in exactly what you intend to service, and when that service begins and ends.
- Are you really going to load it up and haul it away? If not, you're not performing snow/ice removal. If you are going to plow it, be clear that the contract reads "snow plowing" services.
- Our services are cut and dry: We plow, remove, clear and apply. "Snow operations" is very general. Be sure to define the scope of work, what it entails, when it will start and stop, what equipment/materials will be used, etc. The more detailed you are, the better protected you are. Use "Snow Operations" as a title, then be very clear on what you are going to do. Be sure to set time limits. Define when during the snow event your services will start, and when after the snow event your services will stop. For example:
- Plow snow accumulations starting at 2 in. on paved parking areas.
- Pre-treating will be applied to paved parking areas within one hour of the start of the snow/ice storm.
- Re-apply ice control product upon completion of snow plowing (within 1 hour) on paved parking areas.
- Clear concrete/asphalt sidewalks upon 1-in. snow accumulation.
- Ice control products will be applied upon completion of sidewalk clearing (within 1 hour).
- Dumpster enclosures will be cleared and ice control products will be applied at the end of the snow storm (within 2 hours).
- Carriage returns will be cleared and ice control products will be applied at the end of the snow storm (within 2 hours).
Who makes the call for service?
- Define whether you or the customer will determine when service begins. Make sure depth/weather service triggers are clear.
Who is responsible for thaw-refreeze
follow-up?
This is crucial in the event of a lawsuit based on a melt-and-refreeze situation. Unless you are willing to accept the responsibility (and the customer is willing to pay for the service), the contract should include language such as: "Customer acknowledges contractor is not a 24-hour monitoring service, and it is the customer's responsibility to notify contractor of melt and refreeze conditions arising 24 hours after the end of the storm event."
Bare/black pavement
- Be very clear when this is to be achieved. In the middle of an 8-in. storm, can you really guarantee the lot to look as bare and black as a summer day?
Insurance clauses
While heavy-handed insurance clauses may not be reason enough not to sign or re-sign a property, keep your eyes open. Do not be afraid to try to negotiate the contract, requesting amendments that clear up confusion or better outline responsibilities.
Read and reread this portion of the contract, and know clearly what you are promising and willing to give away in the event of a slip and fall:
- Additional insured: Free ride on your insurance policy.
- Waiver of subrogation: If you were not found at fault, you cannot go back and recoup your losses from them.
- Hold harmless/indemnification: You will defend your customer, and not hold the company responsible for anything.
- Primary non-contributory clause: “You go first.” Your insurance will be maxed out on all limits on the claim.
I chuckle at the “obviousness” of some of the phrases mentioned above. As snow and ice management professionals, we know what they mean legally and what’s implied. It’s not rocket science. What we must remember is that in the battle of a slip and fall, a person who is not a snow and ice professional and who has no real understanding of the industry will determine what your contract said, and what it meant. Don’t give them room for interpretation.
Before signing any contract, you must determine whether the risk of the contract is worth it to you and your company. Will paying your deductible on a slip and fall take all of your profit on that contract? Will it force you to service the contract for free? Will your premiums go up—or worse, will your insurance not be renewed?
We live in a very litigious society, and the contract is the first thing attacked. The best thing you can do is hire an attorney to review your contracts, to ensure you have covered yourself and not opened your company up from a liability standpoint.
Debra L. Mattson, CSP, is risk/operations manager for Allied Snow Plowing, Removal and Sanding Services Corp., Mystic, CT. She is a also a member of SIMA's Insurance Committee. Contact her at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .
