Top 5 Questions about Snow Plows
From Commerce Insurance Company
As the winter weather approaches, we would like to share the most common questions asked when Commercial clients plow or remove snow as part of their business.
Question: I have a plow on my light truck and plan to clear snow. Do I need a Business Auto liability policy?
Answer: Not necessarily. A snow plow or other detachable equipment does not disqualify a risk from a Personal Auto Policy even if the insured is paid for services. If your customer is an individual, a personal policy with class 30 may be appropriate.
Question: I plow for the town and businesses that require additional insured status. Do I need a Business Auto liability policy?
Answer: Yes. Regardless of the weight or ownership of the vehicle, an additional insured cannot be added to a Personal Auto Policy. A Business Auto policy should be used. The Enhancer endorsement automatically added to your voluntary policies for no additional fee includes additional insured status when required by written contract. The MM9950 can be added to include additional insured status to voluntary policies where no written contract exists or for ceded policies with or without a written contract.
Question: Will the premium increase on my Business Auto Policy if I offer plowing services for a fee?
Answer: Probably not. Assuming that plowing is a side operation, and given the trend towards milder winters in Massachusetts, it is hard to imagine that a vehicle will plow more than 20% of the time. Nevertheless, if plowing exceeds 20%, then a “service” classed vehicle might have to be changed to a “commercial” class (80/20 rule).
Question: I am attaching a plow to my vehicle. Does my Business Auto Policy provide physical damage coverage for the plow?
Answer: Yes. There is physical damage coverage for the plow (equipment) as long as the vehicle to which it is attached also carries physical damage coverage. The cost new of the vehicle should be increased to include the cost new of the plow.
Question: I have a Business Auto Policy now. Does my policy provide coverage if someone slips on ice and is injured after I have finished plowing?
Answer: No. Completed operations are covered by a BOP/ GL policy. In order to keep our Artisan rates low, Commerce’s underwriting position is to provide coverage on a BOP when plowing is limited to driveways, streets and roads. Because of the high amount of pedestrian traffic in parking lots, especially immediately prior to and after a snow storm, we exclude coverage for snow removal in parking lots. We suggest that agents use one of the surplus lines carriers that specialize in seasonal, parking lot plowing exposures.