November 15, 2010
Standards needed in winter maintenance contracts
By Robert Kennaley
McLauchlin & Associates
Last year we revisited risk management under the winter maintenance contract. In doing so, we cautioned that an insurance crisis would soon be upon us. A year later, and while the word crisis might not overstate what is happening, there is no question that insurance issues have again become a very significant topic of conversation among winter maintenance contractors.
First, you will recall that more than 10 years ago Landscape Ontario and CNLA took a lead role in creating and marketing Hort Protect, an insurance product that offers members discounted insurance premiums based on the sheer volume of members that need the insurance. The Hort Protect program was then placed with Lombard Canada Insurance.
LO and CNLA continue to do what they can to address these issues. First, LO and CNLA have taken steps to revise and update the LO Standard Form Winter Maintenance Contract, which has been widely used since 2002. Also, and importantly, CNLA announced that Marsh Canada had been named as the new insurance broker of record for the Hort Protect program.
LO and CNLA need your help, however, to better manage the insurance crisis with respect to winter maintenance work in the long run.
This is because, in the past, owners and property managers have often off-loaded the discretion to decide if, when and how ice melting products should be applied to the winter maintenance contractor. In the event of a slip and fall, the claimant would invariably argue that that discretion was improperly exercised. In other words, the person who fell would argue that the contractor had not properly decided when, how and in what quantities of ice melting products were applied. Whether or not the contractor had properly exercised the discretion would be a matter of dispute, because there have been no standards for determining a distribution rate for ice melting products in particular circumstances.
A set of standards is a tool that contractors can use to eliminate debate and disputes over whether or not a proper quantity of ice melting product was applied at appropriate times. Standards allow contractors to simply state, “I will meet the standard.” So long as they can show they did, they can avoid liability for breach of contract or negligence.
A standards, however, does not arise on its own. LO and CNLA need the widespread assistance of winter maintenance contractors to participate in an ongoing research study into application rates. The results of this study will be used in the preparation of the standards that can, in turn, be used to reduce liability, and increase insurability, for all winter maintenance contractors. In short, participation in this study is critical for anyone who provides winter maintenance services to parking lots.
The Snow and Ice Management Sector Group of Landscape Ontario has commissioned the research study. It is aimed at developing an optimum and defensible standard for salt application rates for parking lots. Registration for the program is through Tony DiGiovanni, who may be contacted at 1-800-265-5656, ext. 2304, or at tonydigiovanni@landscapeontario.com.
For more information on the study go to http://bit.ly/saltstudy.
Robert Kennaley practices construction law in Toronto and Simcoe. He speaks and writes regularly across North America. He can be reached for comment at 416- 368-2522, or at kennaley@mclauchlin.ca. This material is for information purposes and is not intended to provide legal advice in relation to any particular fact situation. Readers who have concerns about any particular circumstance are encouraged to seek independent legal advice in that regard.
McLauchlin & Associates
Last year we revisited risk management under the winter maintenance contract. In doing so, we cautioned that an insurance crisis would soon be upon us. A year later, and while the word crisis might not overstate what is happening, there is no question that insurance issues have again become a very significant topic of conversation among winter maintenance contractors. First, you will recall that more than 10 years ago Landscape Ontario and CNLA took a lead role in creating and marketing Hort Protect, an insurance product that offers members discounted insurance premiums based on the sheer volume of members that need the insurance. The Hort Protect program was then placed with Lombard Canada Insurance.
Loss of Coverage
Recently, Lombard imposed significant restrictions, effective July 1, 2010, resulting in the loss of liability coverage for snow removal operators, along with announced rate increases. This was a concern to anyone engaged in winter snow and ice maintenance. Increased insurance costs can have a significant effect on a business’s bottom line. More importantly, however, an inability to obtain insurance might be the end of a winter maintenance business.LO and CNLA continue to do what they can to address these issues. First, LO and CNLA have taken steps to revise and update the LO Standard Form Winter Maintenance Contract, which has been widely used since 2002. Also, and importantly, CNLA announced that Marsh Canada had been named as the new insurance broker of record for the Hort Protect program.
LO and CNLA need your help, however, to better manage the insurance crisis with respect to winter maintenance work in the long run.
This is because, in the past, owners and property managers have often off-loaded the discretion to decide if, when and how ice melting products should be applied to the winter maintenance contractor. In the event of a slip and fall, the claimant would invariably argue that that discretion was improperly exercised. In other words, the person who fell would argue that the contractor had not properly decided when, how and in what quantities of ice melting products were applied. Whether or not the contractor had properly exercised the discretion would be a matter of dispute, because there have been no standards for determining a distribution rate for ice melting products in particular circumstances.
Standards in contract
On the other hand, if standards for ice melter distribution can be established, these can be incorporated into the winter maintenance contract. In other words, if the standards exist, the contract can state that the contractor will meet that standard. In the event of a slip and fall, whether or not the contractor met the standard can be easily established. In turn, if the contractor can show he met the distribution rate required by the standard through various ways available to track that information. The contractor should then be able to successfully argue that he or she met his or her contractual requirements.A set of standards is a tool that contractors can use to eliminate debate and disputes over whether or not a proper quantity of ice melting product was applied at appropriate times. Standards allow contractors to simply state, “I will meet the standard.” So long as they can show they did, they can avoid liability for breach of contract or negligence.
A standards, however, does not arise on its own. LO and CNLA need the widespread assistance of winter maintenance contractors to participate in an ongoing research study into application rates. The results of this study will be used in the preparation of the standards that can, in turn, be used to reduce liability, and increase insurability, for all winter maintenance contractors. In short, participation in this study is critical for anyone who provides winter maintenance services to parking lots.
The Snow and Ice Management Sector Group of Landscape Ontario has commissioned the research study. It is aimed at developing an optimum and defensible standard for salt application rates for parking lots. Registration for the program is through Tony DiGiovanni, who may be contacted at 1-800-265-5656, ext. 2304, or at tonydigiovanni@landscapeontario.com.
For more information on the study go to http://bit.ly/saltstudy.
Robert Kennaley practices construction law in Toronto and Simcoe. He speaks and writes regularly across North America. He can be reached for comment at 416- 368-2522, or at kennaley@mclauchlin.ca. This material is for information purposes and is not intended to provide legal advice in relation to any particular fact situation. Readers who have concerns about any particular circumstance are encouraged to seek independent legal advice in that regard.