When we think of managing the risks presented by snow removal operations, we almost always focus on the risk of slip and fall lawsuits. While slip and fall lawsuits present a very significant financial risk to both property owners and snow removal contractors, the risk to your business of either too little or too much snow can present just as much or more risk to your business. If you’re a property owner that pays for snow removal, you have a budget set and too much snow can blow your budget for the year. If you’re a snow removal contractor, you need it to snow to earn your living.
You might think that there is no way to protect yourself from too much or too little snow but there is a way to manage that risk. Just like a farmer buys crop insurance, a business can buy insurance to protect their business from either too much or too little snow.
Protecting your business from too little snow…
If you’re a snow removal contractor who gets paid for services only when it snows, you play a waiting game. You check the snow forecast every day and pray for snow just like a farmer prays for rain. Snowfall often varies widely from year to year and there is no amount of planning and forecasting that you as a snow removal contractor can do to make it snow. You can prepare and train for everything else but you can’t make it snow. The amount of snow that falls is determined by Mother Nature and there is nothing you can do about that.
Suppose you’re a snow removal contractor in Denver, Colorado, who gets paid for services when it snows. The average snowfall for the Denver area is 54” of snow a year. For the 2016-2017 snow season there was about 25” of snow (depending on where the measurement was taken). Therefore, the majority of snow removal contractors saw at least a 50 percent loss of revenue with some contractors having even higher loses of revenue. I know of no business that can sustain itself very long when business is down 50 percent or more and I am personally aware of many snow removal contractors that have had to shut down because of the lack of snow.
Protecting your business from too much snow…
Suppose you’re a property owner, or even a snow removal contractor that gets paid a fixed price for an entire season. You’re in the position of having a fixed budget for snow removal expenses and when you have one of those years when it snows so much your city ends up headlining the national news, it can completely blow your annual budget. If you’re one of these businesses you can get hurt just as bad from the extra snow as those snow removal contractors can get hurt from lack of snow.
No matter whether you need snow to make your living or whether you have a limited budget for snow, there is a way to insure your business for snowfall.
A tool for managing risk…
I met Robert Holmes, President of Spectrum Weather and Specialty Insurance, a couple of years ago. Robert sells insurance policies to protect businesses from too little or too much snow. Those Denver based snow removal contractors that I just mentioned could have purchased insurance policies that would pay out if the snow fall was under a specified amount. For example, a contractor could call Robert Homes and say that he/she wanted to purchase a policy that would pay $10,000 for every inch of snow under 35” of snow for the months of December through April. In the case of the 2016-2017 snow season, where snowfall was approximately 25” during this time period, the insurance policy would have paid $100,000 to the contractor to replace the lost revenue from snow removal operations. The cost of the policy varies depending on the snowfall threshold you want, the time period and how much you want to be paid if the snow is less than your policy threshold.
For those businesses that will be hurt from too much snow, Robert can also sell you a policy that pays out of the snowfall exceeds a certain threshold.
Whether your business needs snow or doesn’t want snow, you may want to look into insuring it for your particular circumstances. Just like other forms of insurance, it can be an instrumental tool for mitigating the risks that are inherent for anyone affected by snow.
About FieldVision
One of the biggest problems for field service companies and their clients (property managers) is the lack of visibility regarding the status of work to be performed at remote locations.
FieldVision solves this problem by giving field crews the ability to update their work status and to have that information made instantly available to their supervisors, customers and property managers. This capability provides a significant strategic and economic value to both service provider and property managers.
FieldVision was created as a time-saving tool for everyone involved in property management and field services. FieldVision is inexpensive and easy to use. Start saving time today with FieldVision. Download the app for free.
Download the free app: Google Play or Apple App Store
