Snow removal contracts for your business: Everything you need to know
Adding snow management services like snow and ice removal to your landscaping business can be a lucrative move. Residential and commercial clients alike need help to clear their property of hazardous snow and ice in winter, especially in locations with regular and heavy snowfall. If you and your landscaping crew do a fantastic job, you’re likely to get repeat customers throughout the winter months.
However, if you’re a landscaping business owner (or prospective owner) who intends to offer snow removal as a service, you’ll need a snow removal contract. There are a lot of different contract options out there today. Choosing the best one for your situation can seem daunting. That’s why we’ve put together this helpful guide to share what you need to know about snow removal contracts for your business.
Let’s start with some information about snow removal itself.
Snow removal vs. snow plowing
Snow plowing simply means you clear the snow from a road or driveway by piling it up in another area. You can see this in cities where roads get plowed, leaving sidewalks with mounds of snow that take weeks to melt away. Plowing is also more common in residential settings than in commercial settings and is less expensive than snow removal.
Snow removal, on the other hand, means the complete elimination of snow and ice from the job site. This process requires more landscaping equipment, time, crew, and budget to accomplish. It may include a combination of snow and ice management services such as clearing driveways and walkways, deicing, snow blowing, and roof shoveling.
What is the difference between commercial and residential snow removal?
Residential snow removal
Homeowners are largely concerned with keeping their driveways and walkways cleared. The snow management work you do for them will likely be fast and simple but ultimately less lucrative than commercial work, unless you can connect with HOAs to service entire developments, rather than just individual homes.
Commercial snow removal
Clients with commercial property are all about eliminating risk. While residential clients are more concerned with performing their day-to-day tasks uninhibited by snow and ice, commercial clients want to keep their property free of slips and falls to avoid costly lawsuits. In addition, clients may hire you for long-term work to ensure that you are there right when you need them throughout the winter months.
Now that we’ve covered snow removal basics, let’s dive into some contract details.
What is a snow removal contract?
A snow removal contract is a written agreement between you and your client. It states the terms of the snow removal, payment, and any special agreements and exclusions determined by both parties.
Both commercial snow removal contracts and residential contracts protect your snow removal company and allow you to run your business with more financial security. Note that if you only seek to offer snowplowing services, you can still use much of the following information to help you create a snow plowing contract as well.
Once a contract is in place, you are required to perform the work described in the terms for as long as it is agreed upon. This may mean that you will clear away snow immediately after each snowfall without any further action needed from your client. It could also mean that you only clear snow when your client calls you, regardless of how often it snows.
You can use different types of snow removal contracts based on the terms you wish to set. We'll discuss the various types of contracts later in this guide.
What is the difference between a snow removal contract and a snow removal service?
A snow removal contract is a binding agreement between you and your client that normally extends for at least one snow season. You will cover all snow removal services within your scope for the duration of the contract.
Snow removal service describes the work you perform. You could technically offer snow removal services without a contract, though this is not wise. Snow removal service can also refer to a single job as opposed to a season-long or year-long contract.
Types of snow removal contracts
There is more than one type of snow removal contract to choose from. These contract types are laid out by payment-for-service terms. They all have their advantages and disadvantages. Let’s take a look at each of the most common contract types below.
Time and materials contract
With a time and materials contract, the contract price changes based on the exact services rendered each time you perform a job for your client. This means that your service fee per job depends on the amount of labor, time, and materials (such as deicing products) required, as well as the amount of snowfall.
This type of contract can bring financial uncertainty. While you know you will be paid for the work you do, your income is entirely weather-dependent. Very little snow means very little payment. You may prefer a more predictable payment structure if you live in an area where the amount of snowfall each season is hard to anticipate.
A per-inch contract is also known as a per-event contract and allows you to charge based on snow accumulation. For example, you may charge one rate for snowfall under 3 inches, and another rate for snowfall of 3-to-5 inches, and so on.
A per-push contract allows you to offer both you and your clients more financial stability. The agreement ensures a fixed rate for each occurrence, regardless of the amount of snowfall, time, or labor. With this type of contract, your per-push rate applies each time you come out to remove snow on a property. In the case of a blizzard, you could receive your per-occurrence rate for multiple days—or even weeks—in a row.
Per-push contracts are a rather popular option for landscapers in the snow removal space as they provide an opportunity to define exactly what your flat rate includes—and what it does not. For example, while your fixed rate may include clearing driveways and parking lots, you may stipulate that deicing and roof shoveling come at an additional charge.
A per-event contract is similar to a per-push contract, except it only allows you to charge once per snow event. While this type of agreement may be more budget-friendly to your client, it leaves money on the table for you. You cannot predict the level of work required for each snowstorm. If you are only paid one flat rate, no matter how many days of snowfall there are in a row, you are likely to lose money in labor and materials.
A seasonal contract (sometimes called a “fixed-fee contract”) is an agreement that stipulates a specific fee to be paid for all work done for a predetermined period. The rate does not change based on snowfall accumulation, the number of pushes, or the amount of time, labor, or materials spent. You may enter into a contract for a single season, though many snow removal contractors prefer terms of at least 3 years.
While fixed-fee contracts are usually well-balanced in terms of output-to-income, there is still the chance you could encounter an exceptionally heavy year of snowfall. To cover your business in these situations, consider adding a cap to the number of pushes-per-season. Stipulate that any push above that number is executed for an additional fee.
What should a snow contract include?
In addition to the payment terms and contract start and end date, you will want to detail everything covered under the agreement, down to the amount of snow you will remove for each push. Include additional rates, if any, for products or services not included in your standard push.
You will also want to add breach of contract clauses that outline what will happen in the event of adverse behavior on the part of your client. For example, you could require that your client pays you a certain dollar amount if they choose to cancel their contract with you before the contract end date.
The best snow removal contract templates online
If you’re wondering how to write a snow removal contract, don’t worry: You don’t have to reinvent the wheel. Here are three places to go for helpful templates that can act as a foundation for your finished contract:
- 20 Snow Removal Contract Templates
- Basic Snow Removal Contract
- Snow Removal Bid Template and Services Contract
What landscaping business insurance do I need in addition to my snow removal contract?
Every small business should have a suite of insurance policies in place to protect their business. These policies cover you in the case of lawsuits or certain damages. If you are a landscaping professional offering snow removal services, you will want a specific set of policies relevant to the work you do. Some such policies you’ll want to consider include:
- Worker’s Compensation: Usually bundled with Employer’s Liability, this policy covers costs related to employee injury or illness received while on the job. It is a requirement in most states.
- Commercial Auto Insurance: Covers your business vehicle in the event of a crash. It can also protect you if you use your personal vehicle for business some of the time.
- Business Property Insurance: If you own a brick-and-mortar, business property insurance ensures you will be covered in the event of property damage.
- Business Interruption Insurance: Business interruption insurance helps you recoup lost income and pay your employees if your business must shut down temporarily for a covered reason.
- General Liability Insurance: This policy protects you in the event of a lawsuit brought by someone whose person or property is damaged or harmed while on your property.
- Business Owner’s Policy (BOP): A BOP is a convenient bundle of multiple policies such as general liability and business property insurance.
- Professional Liability Insurance: Also known as errors and omissions, professional liability protects your business if you make a negligent error that causes physical or financial harm to another.
- Employment Practices Liability Insurance (EPLI): You’ll want this policy in place if you have employees. EPLI covers you in the event of a lawsuit arising from an employee’s claim of harassment, discrimination, or other harmful treatment.