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Snow Removal Insurance – Everything You Need to Know

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Looking to start a snow plow business during the winter? Make sure you’re protected ahead of time with snow removal insurance – you wouldn’t want one slip and fall accident to financially ruin what would have been a successful endeavour. 

What is snow removal insurance?

Snow removal insurance is exactly what it sounds like – insurance for your snow removal business. Although there are many different types of commercial insurance, getting a customized contractors policy for your snow plow business can ensure you’re protected from the unique risks that come with your everyday operations. 

For instance, your snow plow insurance can be used to pay for legal fees or medical expenses in the event you’re sued for an accident, such as a slip and fall. And your coverage can also provide financial compensation for the repairs and replacements of any stolen or damaged equipment. 

Types of commercial insurance for a snow plow business

Every snow plow business insurance policy is different – you can pick and choose the coverage you need, as well as the amount you need, to customize a package that best suits your needs. However, generally speaking, it’s a good idea to consider the following types of commercial insurance to limit the unique risks of snow removal: 

  • Commercial general liability insurance – A CGL policy protects you financially from claims for third-party bodily injury or property damage. So if an employee slips and injures themselves or you accidentally plow through a neighbor’s lawn, you can be compensated for the extensive legal fees, medical expenses, and property repairs.
  • Equipment and tools insurance – Often known as contents insurance, this type of coverage can reimburse you for any repairs or replacements of your equipment and tools. Depending on your insurer, there may also be other variations of coverage, such as leased, borrowed, and rented equipment insurance (protection for contents you lease, rent, or borrow) or equipment breakdown insurance (protection for equipment breakdowns due to mechanical or electrical issues).
  • Commercial auto/truck insurance – Commercial auto insurance differs from a conventional car insurance policy as it covers you financially for business vehicle claims. For instance, it can help pay for a repair or replacement if your business vehicle gets damaged or stolen. Or it can also cover third-party liability damages (e.g. medical fees, property damage) if you or your employee get into a car accident due to business operations. On the other hand, if your snow removal business operates using non-business vehicles (e.g. attaching a snow plow to an employee’s truck), you may need to opt for non-owned vehicle coverage to ensure you’re still protected. 

Remember, not all insurers offer the same types of business protection. And depending on your needs, you may want a more comprehensive policy with coverages such as professional liability insurance or key person insurance. So be sure to speak to a licensed business insurance broker in Canada to learn more about the types of insurance you should add to your snow removal policy.

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Do you need snow plow insurance?

It depends – each location may have its own bylaws. For example, to become a licensed snow removal contractor in Ottawa, you need to first prove that your business is adequately insured. 

And even if you aren't bound by law to purchase a policy before you begin clearing the roads, you should still consider purchasing coverage to protect yourself financially from the risks of your day-to-day operations. Some clients may also require you to purchase proper coverage before contracting you for your snow removal services. 

If you’re a subcontractor who doesn’t work directly under one business, it’s still a good idea to purchase your own snow removal insurance policy. That way, if your employer doesn’t have enough coverage, or if you pick up a job with an uninsured company, you’re still good to go.

Average snow removal insurance cost

The cost of snow removal insurance differs on a case-to-case basis as each business faces its own set of risks and requires different types of coverage. You can, however, expect to pay upwards of $1,000 per month for a basic CGL policy with $1 million in coverage. 

Factors that impact the cost of your snow removal insurance

The types of protection, coverage limits, and claims deductibles you set in your snow removal policy are among the biggest factors that influence the cost you’ll be paying. Additionally, the more risk you face, the more expensive your policy will also be – to determine your exact quote, here are a few factors insurers will consider: 

  • Industry experience – having more experience in the snow removal industry shows insurers you’re less likely to make a mistake, decreasing the cost of your insurance;
  • Business revenue – generating more revenue beings more risk to the business in terms of liability claims, increasing the cost of your insurance;
  • Business size – a larger snow plow business means you’re taking on more jobs (and more risk), increasing the cost of your insurance; 
  • Location of operations – operating in an area with frequent snowfall presents more risk than an area with occasional snowfall, increasing the cost of your insurance;
  • Number of employees – employing more people means there’s a higher chance for your staff to create a liability claim, increasing the cost of your insurance;
  • Insurance history – having a clean business insurance history shows insurers you’re less likely to make a future claim, decreasing the cost of your insurance.

Why is snow plow insurance so expensive?

The price of a snow plow insurance policy is often higher than other types of businesses because of the specific risks the snow removal industry brings (e.g. slip and fall claims). You should still consider purchasing a comprehensive policy with adequate coverage, however, as one small accident can cost you far more in the long run. 

How to avoid snow removal business insurance claims 

One way to ensure your snow removal insurance premium stays as low as possible is to avoid business claims altogether. By keeping your past record clean, you can show insurers you’re less likely to make a mistake in the future that results in a claim – here are a few tips to do so:

  • Take before and after photos
  • Maintain your equipment and tools properly 
  • Store all equipment and tools securely
  • Create a clearly defined contract
  • Ensure all employees are properly trained

The bottom line

If you’re thinking of clearing the roads this winter, think of snow removal insurance first – paying a monthly premium can save you thousands of dollars in the long run. And with the proper coverage, you’ll be able to focus on the business itself, instead of the potential risks it brings.