IL Snow Removal Legislation Facts
It’s that time of year, and if you live in the northern part of Illinois, you’re accustomed to snow during winter. Soon we’ll encounter the sights of snow plows removing snow and ice on streets, parking lots and sidewalks. During the winter, you likely fall into one of two categories: property owner/manager who hires someone to remove snow, or company hired to remove snow for others. If either of these applies to you, you should be aware of recent changes in Illinois law that affects risk transfer and liability.
No matter which side you’re on, you likely entered into a written contract outlining the duties and responsibilities of each party. A major problem plaguing the professional snow and ice management industry centered on contract language, specifically the indemnification clause. In the past, it was common that snow removal contracts shifted liability one way or the other, either the property owner/manager had to take on the entire risk of liability for slip and falls related to snow removal, or the contractor had to take the entire risk. Typically, it was the contractor who assumed the risk. Now, unless certain exceptions apply, such contractual provisions will be void and unenforceable in Illinois.
Most snow removal contracts’ indemnification clauses likely read as follows: “To the fullest extent permitted by law, you shall, at your own cost and expense, defend and indemnify (property owner) from any and all allegations directed at the indemnified party. To the fullest extent permitted by law, you shall indemnify and hold harmless the indemnified parties from any and all liabilities, obligations, claims, demands, settlements, and penalties, for any incidents arising out of based upon, or in connection with your performance.”
Translation: If anything goes wrong, the snow contractor must take the fall, even if the property owner/manager is at fault for an accident. Property owners/managers’ contracts historically provided for them to be indemnified for all costs associated with a claim (including attorneys’ fees and indemnity), regardless of fault and the contractor would have no case to fight.
For several years, the Accredited Snow Contractors Association has been lobbying for legislation to void these types of indemnification clauses. On August 25, 2016, Illinois became the first state to adopt into law the association’s proposed legislation, referred to as the Snow Removal Service Liability Limitations Act. The law, in part, provides that any provision, clause, covenant or agreement entered into on and after August 25, 2016 that is part of, or in connection with, a snow removal and ice control services contract is against public policy and void if it requires one party to indemnify or hold harmless the other party from any tort liability resulting from its own acts or omissions.
This new legislation will have a positive impact on snow removal contractors who were accustomed to paying for losses even if they weren’t at fault. This new law may come as a surprise to many property owners/managers who transferred all losses to the contractor via the indemnification clause. The new law places the liability with the appropriate party. The bottom line is property owners/managers can no longer pass their liability on to the contractor or vice versa.
There are exceptions to the new law. The law doesn’t apply to:
- Contracts for snow removal or ice control on public roads with public bodies
- Contracts for snow removal or ice control with a public utility
- An insurance policy, surety bond or workers’ compensation
This means if one of the parties to the contract is a public body or public utility, that public body or utility can legally transfer liability to the other party regardless of fault.
Moving forward, contractors and property owners/managers should be aware of the following:
- All contracts entered into prior to August 25, 2016, which contain an indemnification clause indemnifying the other party for their fault will remain enforceable.
- All contracts entered into on and after August 25, 2016, which contain an indemnification clause indemnifying the other party for their fault will be void and unenforceable, and neither party will be allowed to seek indemnity from the other.
- All parties entering into new snow and ice removal contracts should consider revising their contracts to provide indemnity but only for that portion of a loss which arises out of its fault, not the other party. Contractors should consider requiring that the owner indemnify it to the extent a loss was caused by the property owner/manager and vice versa.
- The new law doesn’t affect the parties’ rights to request insurance from one another, including additional insured status on a policy.
It’s recommended you review your current contracts with an attorney to ensure your contract contains an enforceable indemnification clause. Not in Illinois? The Accredited Snow Contractors Association is also lobbying for similar legislation in all 50 states. Currently, Michigan, Pennsylvania, New Jersey and New York have bills pending.
Contact us if you have further questions.
ABOUT THE AUTHOR