Auto Owners Insurance: Snow Plowing Coverage Explained

Snow plow insurance is a type of commercial insurance that covers snow plow businesses and individuals offering snow removal services. Snow plow operations involve extreme weather and dangerous driving conditions, increasing the risk of accidents, injuries, and property damage. Depending on the scale of your snow plow operations, you may need different types of insurance coverage, such as commercial auto insurance, general liability insurance, workers' compensation insurance, and business owner's insurance. Commercial auto insurance covers bodily injuries and property damage caused by a snow plow, while general liability insurance covers bodily injury and property damage caused after plowing operations are completed. Workers' compensation insurance protects employees in the event of workplace accidents, and business owner's insurance covers damage to business property and equipment. It's important to understand the specific requirements and exclusions of your auto insurance policy and consider the necessary additional coverage to ensure your snow plow operations are adequately insured.

Personal vs. commercial use

If you are using your vehicle for snow plowing, you may be wondering if you need commercial or personal auto insurance. The answer depends on several factors, including the type of vehicle, the purpose of the driving, and who holds the title. Here are some key points to consider when determining whether you need commercial or personal auto insurance for snow plowing:

Vehicle Ownership

If your business owns the vehicle you use for snow plowing, you will likely need commercial auto insurance. Commercial auto insurance is also necessary if you use your personal vehicle for snow plowing services and profit. In this case, you will also need to obtain a commercial driver's license (CDL) and commercial plates for your truck, and your operator class will need to be adjusted to "Business Use." On the other hand, if you are plowing your own driveway or property with your personal vehicle, your personal auto policy will typically provide coverage.

Vehicle Type

The type of vehicle you drive is another critical factor. If you operate a vehicle specifically designed for commercial use, such as a flatbed truck used for towing, you will likely require commercial auto insurance. Certain commercial vehicles may not be eligible for personal auto policies. Additionally, if your vehicle is heavier than a typical pickup or SUV, such as a dump truck or semi-truck, you will need a commercial auto insurance policy.

Vehicle Usage

Consider how you use your vehicle. If you use your truck exclusively to transport employees or materials for your business, you will likely need a commercial auto policy. However, if your truck is primarily used as a family vehicle but is occasionally used for business purposes, such as transporting clients or running business errands, a personal auto insurance policy may suffice. It is important to note that even occasional business use may not be covered by a personal policy.

Liability Insurance Requirements

If you are using your vehicle for business purposes, you may need higher liability limits than what is offered by personal auto insurance. In this case, a commercial auto insurance policy can provide the additional protection your business needs in the event of an accident or claim. General contractors, for example, may require higher liability limits to meet the demands of their customers or third parties they engage.

Number of Drivers

If you have employees who regularly use your vehicle to fulfill their job duties, this may constitute commercial use, and a commercial auto policy may be necessary. A personal auto policy typically covers the owner of the vehicle and one or two immediate family members.

In summary, if you are using your vehicle for snow plowing services and profit, you will likely need a commercial auto insurance policy. Commercial auto insurance provides higher liability limits and covers more complex claims, protecting your business from accidents, injuries, legal fees, and damaged vehicles. However, if your snow plowing activities are limited to personal use, such as plowing your own driveway, a personal auto insurance policy may be sufficient.

General liability insurance

Snow plowing is a risky business, with the potential for accidents, injuries, and property damage. As such, it's important to have the right insurance in place to protect yourself and your business. General liability insurance is a crucial component of this.

In addition to general liability insurance, other types of insurance to consider for a snow plowing business include workers' compensation insurance, commercial auto insurance, and tools and equipment insurance. These policies can provide protection for workplace injuries, vehicle accidents, and damage to or theft of equipment.

Commercial auto insurance

The cost of commercial auto insurance for snow plowing can vary depending on several factors, including the types of projects undertaken, the location of projects, the number and types of vehicles used, and the number of employees. It is important to note that commercial auto insurance is typically mandatory to obtain a snow plow insurance policy, and the coverage limits of both policies must match.

In addition to commercial auto insurance, other types of insurance to consider for a snow plowing business include general liability insurance, workers' compensation insurance, and tool and equipment coverage. These policies can provide financial protection in the event of accidents, injuries, property damage, and legal fees.

By obtaining comprehensive insurance, including commercial auto coverage, snow plowing businesses can protect themselves from financial losses and ensure they are compliant with legal and contractual requirements.

Workers' compensation

If you are a snow plow business owner, you will need to consider workers' compensation insurance. This is a legal requirement in most states as soon as you hire your first employee. It is important to have this type of insurance to protect your business and your employees in the event of a workplace accident.

The cost of workers' compensation insurance will depend on a number of factors, including the number of employees, your payroll, how your employees are classified, and your industry. The median cost is $231 per month, but this can vary depending on your specific circumstances.

In addition to workers' compensation, there are several other types of insurance that snow plow businesses should consider, including general liability, commercial auto, commercial property, and tools and equipment coverage.

Business owner's policy

A Business Owners Policy (BOP) is an insurance plan that acts as an all-in-one policy that covers property, vehicles, employees, and equipment. It is a must for the snow plowing business to protect the business from financial losses.

Snow plow businesses require a substantial upfront investment, with the largest expense being a reliable truck, which can cost tens of thousands of dollars. A business will also need a plow, snow blower, salt sprayer, and salt, which can cost between $3,000 and $10,000. Other startup expenses include insurance, fuel, and advertising costs.

To keep startup expenses low, business owners may want to use a truck they already have or purchase a used one. It is important that the truck is reliable, as customers will be unhappy if their snow plow service is delayed due to truck breakdowns.

Leasing a truck can reduce startup costs, but lease payments increase operating expenses. A loan may be a better option, as the business will own the truck once the loan is paid off. Ongoing expenses for a snow plow business include maintenance, fuel, and insurance premiums for the truck and plow.

Snow plow businesses should also consider the type of insurance they need. If you are using your personal vehicle for snow plowing, you will need a commercial insurance policy, also called a business auto policy. This provides bodily injury and property damage liability protection if someone is injured or another party's property is damaged while using the vehicle for snow plowing.

Commercial auto insurance typically covers medical expenses, legal fees, and repairs or replacements for damaged property. However, it is important to note that most personal automobile insurance policies exclude coverage for vehicles used for business purposes.

In addition to commercial auto insurance, snow plow businesses may also want to consider general liability insurance, which covers a wide range of accidents and basic risks. It provides financial protection if someone other than an employee gets hurt or you are held responsible for damaging someone else's property. It also covers legal fees and judgments, as well as claims of negligence.

For businesses that hire employees, workers' compensation insurance is crucial. It can help pay for medical bills and lost wages after a workplace accident and is required by most states as soon as you hire your first employee.

Snow plow businesses should also consider commercial property insurance, which covers damage to their own property, such as equipment, inventory, and the building they own or rent. This can provide protection in the event of a covered event, such as a burst water pipe, fire, tornado, or vandalism.

Frequently asked questions