What is the Snow Removal Service Liability Limitation Act in Illinois?
Simply put, this new law in Illinois prevents the passing of liability from the property owner to another party for snow/ice removal related lawsuits. This means that property owners cannot transfer risk from themselves to a snow removal contractor for a snow or ice related incident (like a slip and fall lawsuit) on his or her property. The law is meant to protect all parties with the side goal of reducing insurance premium and claims costs for all.
Why the Snow Removal Service Liability Limitation Act in Illinois is good for Everyone
When you look at the title, the law (SB2138) seems to only protect snow plow contractors from taking on the risk of property owners. This legislation came about by the influence of ASCA who sees the law is good for all responsible parties and who hopes to see the law spread throughout the US.
The reason the law is good is because it puts responsibility and accountability with the only party that can truly be accountable and responsible for a piece of property, the property owner. While snow removal contractors are partners with property owners, only the property owner can ensure the property remains safe for pedestrian and vehicular traffic. When the property owner fulfills their responsibility, pedestrians get hurt less, lawsuits go down, insurance rates go down, and both property owners and snow removal contractors keep a healthier business.
What Would Happen Without the Liability Limitation Act?
There are two scenarios we commonly think of when it comes to pushing liability down the road. First off is the “innocent sub-contractor.” Large property owners often hire large snow removal companies and in the contract, the property owner pushes the liability down to the contractor (i.e. if anyone slaps us with a slip and fall lawsuit in the winter, you, Mr. Contractor, pays the bill, not us). Yet some large contractors have more work than they can handle, so they hire a sub-contractor (i.e. a guy with a truck and a plow) to handle the job and in this next contract liability is pushed from big contractor to little sub-contractor. Yet many of these “guys with a plow” do not completely understand the language of the contracting pushing liability down to them nor do they necessarily have the experience necessary to avoid lawsuits, yet the big contractor is not concerned because they no longer have the risk of a lawsuit, putting the sub-contractor and the property owner in a risky situation.
The other scenario that happens is that the property owner puts out the plowing job for bids and chooses the cheapest quote where he or she can push liability down to the contractor. The property owner may not actually care how safe the property is, he or she feels covered because the contract pushed all of the liability to the contractor, so due diligence is never taken in choosing a quality snow removal contractor nor is there a lot of planning on what will happen during snow and/or ice events. The “problem” is now in the lap of the contractor.
In either scenario, there are too many small snow removal contractors that do not understand the full implications of taking on liability, they often have inadequate insurance coverage, and there are factors they are unprepared for or cannot control on the property during a snow or ice event. So what happens, there is a slip and fall event, and the property owner gets sued. The property owner takes out the contract and says “Hey contractor, you said you would pay the bill.”
Now the small guy, usually just starting out in snow removal, is not prepared for the lawsuit, and many small snow contractors find their dream of working for themselves has become a nightmare from the lawsuit. If the insurance coverage was not enough, he files for bankruptcy, and the injured person has to try to get their due from someone else. If the insurance coverage is enough, this contractor may find his rates skyrocket after having a significant incident, and then his dream still goes up in smoke because he can’t afford the insurance bill.
This may be a bit simplistic, but you get the picture. The only person who can control all aspects of safety, the property owner, basically pushes their responsibility to someone else, leaving many people at risk.
What Happens with the New Act?
Senator Chris Nybo, the sponsor of the bill, told Snow Plow News, “Property owners and managers are no longer able to cut themselves out from any liability for injuries and accidents. Therefore, I’m hoping they will work more effectively with contractors to adopt service practices that best promote safety for pedestrians and drivers, rather than just lowering cost, which sometimes can result in cutting corners and jeopardizing safety.”
Now that the property owner is on the hook, the property owner should (by their own or by the “encouragement” of their insurer) do their homework to hire a quality snow removal company. The property owner and snow removal company work out a plan of how to keep the property safe for people and vehicles (or our “let’s not to get sued” plan for some), including property improvements, a snow/ice event action plan executed by the contractor, documentation that the plan is being worked, and mid-season and post-season checks to see how to improve property safety in the future. We should mention all through the winter, the property owner will be more likely to inspect the property and hold the snow removal company accountable BEFORE an incident if they know they are the only one on the hook if there is a slip and fall incident.
A side benefit of this is the potential for an insurance premium decrease because with the property owner vigilant about their property it is expected accidents will be less. Also, the brand new snow contractor who was getting low premiums (because he never had an accident before) doesn’t pass on the insurance burden to the older stable companies who are still in the game after the new contractor leaves the industry.
Winners and Losers with the Bill
We like to think that pedestrians and people who drive onto these properties are the biggest winners because we expect more property owners to take quality care of their property in the winter. We expect diligent snow removal companies to win because they will be more likely to earn the business from property owners who would like to keep a safe property for everyone who steps or drives onto the grounds. We expect conscientious property owners to win too as they delight their visitors and employees with safe grounds and avoid avoidable law suits. We expect insurance companies to win with a decline in claims.
As for losers, we expect lazy property owners to lose, because they will feel the bite of a lawsuit when they do not choose their snow removal contractor carefully or when they do not partner together with their snow removal team to keep a safe property. We expect poorly performing snow removal companies to lose because property owners will have less tolerance for shoddy work that puts them at risk.
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Note: This post was updated on Sept. 2, 2016, to include Senator Nybo’s comments to Snow Plow News.