"$2 million" and "$5 million" come up often in snow removal insurance conversations, usually because a contract or tender asks for one of them. This page explains what the difference means, why clients set these figures, and real examples from published tenders.
We do not recommend a limit. The right limit depends on your contracts, sites and exposure, and a licensed broker is the person to help you decide.
What the Numbers Mean
A $2 million or $5 million figure is usually a liability limit: the most an insurer will pay under the policy, often stated per occurrence and sometimes with an aggregate. See per occurrence vs aggregate limits.
The limit can come from one general liability policy or from a general liability policy with an umbrella above it. See CGL vs umbrella.
Real Examples From Tenders and By-laws
Requirements vary by client. These are specific documents we reviewed, not a statement of what is typical:
| Document | General Liability | Auto Liability |
|---|---|---|
| Bruce Grey Catholic District School Board, RFP 22-00009 snow contract template (Ontario) | $2,000,000 per occurrence | $2,000,000 inclusive (owned, hired, non-owned) |
| Township of Otonabee-South Monaghan, facilities winter maintenance RFP (Ontario) | $5,000,000 per occurrence, $10,000,000 aggregate | $5,000,000 owned; $2,000,000 non-owned |
| Town of Slave Lake, Government Centre snow removal, 2020 to 2023 (Alberta) | $5,000,000 | $2,000,000 |
All three documents required naming the client as additional insured. The two Ontario documents also listed products and completed operations coverage, 30 days' notice of cancellation and WSIB registration or coverage.
Municipal licensing can set a floor too. When Ottawa updated its snow plow contractor licensing in 2024, the minimum insurance for licensed contractors rose from $1 million to $2 million, effective October 16, 2024. See Ontario snow plow contractor rules.
Why Clients Set Limits
Property owners and public bodies want to know that if someone is hurt on their property during your work, there is enough insurance to respond without the claim landing on them. A few reasons they may ask for more:
- High traffic sites. Retail plazas, hospitals, schools and municipal buildings see a lot of foot traffic.
- They are named on your policy. As additional insured, the client relies on your limits.
- Their own insurer's guidance. Intact Public Entities, which insures municipalities, publishes guidance recommending that municipalities be named as additional insured, receive 30 days' notice of cancellation, and that the contractor's insurance be primary. It leaves the dollar limits for each municipality to set.
- Consistency. Some organizations use one contractor requirement across many trades.
The Practical Differences Between the Two
| $2M Requirement | $5M Requirement | |
|---|---|---|
| How often you meet it | Depends on your base policy | May require an umbrella if your base is lower |
| Premium impact | Lower limit, generally lower premium | Higher limit, generally higher premium |
| Client types in our examples | School board | Township, town |
| What to check | Per occurrence and aggregate wording | Whether an umbrella combination is accepted |
Higher limits cost more, but by how much depends on the insurer and your operation. We do not publish premium figures.
Before You Bid
- Find the insurance clause in the tender or contract. Note every limit, endorsement and deadline.
- Check your current limits, including umbrella and auto.
- Send the clause to your broker before you submit, not after you win. Some tenders set tight deadlines; the OSM RFP required a certificate within seven working days of award.
- Build any added insurance cost into your price. See how to price snow removal contracts.
For more on contract insurance clauses, see insurance requirements for commercial snow contracts and municipal snow contracts in Ontario and Alberta.
General information only, not insurance advice. Requirements vary by contract; read yours and speak with a broker.
SnowPlowInsurance.ca is an independent referral service, not an insurance company or broker. We connect you with licensed brokers who provide quotes and advice. How this site works.
Sources
- Bruce Grey Catholic DSB snow contract template
- Township of Otonabee-South Monaghan winter maintenance RFP
- Town of Slave Lake snow removal bid package (2020)
- City of Ottawa: Snow plow contractor licensing review
- Intact Public Entities: Insurance requirements guidance
Frequently Asked Questions
Do snow contractors need $5 million in liability?
There is no single required amount. Contracts set their own limits; examples we reviewed range from $2 million to $5 million per occurrence. A broker can review your contracts and exposure.
Can I meet a $5 million requirement with an umbrella?
Contractors sometimes combine a primary policy with an umbrella to reach a higher limit, but check that the contract accepts it and ask your broker.
Is $2 million liability enough for residential snow removal?
That depends on your operation and any client requirements. Residential clients may not set limits at all, so a broker is the right person to discuss it with.
Why did Ottawa raise its snow plow insurance minimum?
Ottawa's council approved licensing changes in 2024 that raised the minimum insurance for snow plow contractors from $1 million to $2 million, effective October 16, 2024.