Landscaping is rewarding if you like to be outdoors and interact with customers, and you’re good at designing, building and maintaining lawns. Many landscapers start off with smaller residential jobs but over time move on to larger projects such as homeowners’ associations, office parks and other commercial installations.
As your business grows, your insurance needs change. That’s why talking to an insurance professional who knows the landscaping business is a good place to start. An agent or broker can help you choose the right coverage, no matter what size your business is now or will soon become.
Here are some of the basics you need to be familiar with:
Commercial general liability insurance
Commercial general liability (CGL) is an important coverage. It pays for liability claims stemming from property damage, bodily injury or personal injury that occur in the course of operating your business.
With lawsuits on the rise and juries awarding higher settlements, you can’t afford to go without CGL coverage, and many commercial contracts will require it. If a tree limb you’ve trimmed falls on a car or debris from a mower hits one of your customers, a CGL policy will pay for damages and medical care.
CGL policies cover injuries and medical expenses involving nonemployees. Employees are covered by workers’ compensation insurance, which we’ll discuss a little later. CGL also covers personal and advertising injuries such as libel, slander and copyright infringement.
Your insurance professional can explain policy limits (how much the policy will pay out) and the situations it will cover. Keep in mind that CGL policies don’t cover professional liability or employment liability claims. Those require separate policies.
Commercial property insurance
Property insurance covers business assets such as equipment and tools, as well as the contents of your office such as computers, printers, furniture and files. It protects against fires, theft, vandalism, burst pipes and weather-related events like wind and hail damage.
You may need a special policy or endorsement that covers the equipment and tools you use at your customers’ locations. Commercial property policies usually limit their coverage to a fixed address, typically the policyholder’s place of business. However, an inland marine policy can fill this gap. These policies cover property in transit and at job sites.
You may also need heavy equipment insurance, which is separate from the commercial auto coverage you should carry for your trucks and vans. Your insurance professional can help you decide which coverage you need for your vehicles and equipment. Make sure your employees are named on your policies.
BOPs offer bundled coverage
Many landscapers start with a business owners policy (BOP), which includes both liability and property insurance. BOPs also include business income insurance, which replaces your income if your business is interrupted by a fire or other catastrophe that damages your property.
BOPs are bundled policies that provide many of the basic protections you need at a lower cost. However, as your business grows or if you have special risks, you’ll need to consider additional coverage.
You can purchase umbrella insurance to increase your BOP’s liability limits. Or you might consider a commercial package policy (CPP), which allows you to customize your coverage. In addition, landscaping associations and professional societies often work with managing general agents to offer a program policy tailored to your industry.
Program policies provide most of the coverage you would typically need in your type of business. Several companies offer policies tailored to landscape designers, lawn care services, horticulturalists and tree-trimming services.
Workers’ compensation insurance
Most states don’t require sole proprietors to purchase workers’ compensation insurance, but you’ll need this coverage if you hire employees for your commercial accounts. Workers’ compensation provides benefits to employees if they are injured or become sick on the job, and it’s required by law in nearly every state.
Workers’ compensation can be expensive for occupations deemed high risk. If you have employees who climb trees, for example, their rates may be higher. Exposure to pesticides and dangerous equipment may also affect your rates.
Your claims experience (known as an experience modifier) also determines the premium you pay. A high experience modifier can increase your premiums or result in your being declined by an insurer. If you can’t find insurance in the regular market, you’ll need to purchase it from your state’s assigned risk pool.
To keep your rates lower, follow sound safety practices, including making sure workers wear protective gear and providing training on the safe use of equipment and vehicles. Consult an insurance professional who specializes in workers’ compensation to get the best rates for your business.
Professional liability insurance
Commercial accounts can bring the potential for greater professional liability exposure. A simple oversight on your part could be costly if it causes property damage or injury. For example, if your landscape design calls for the wrong type of plants and they have to be replaced or if a retaining wall you installed falls down and hurts someone, you could be sued for damages.
Professional liability insurance protects your firm against claims for errors and omissions, incomplete or inaccurate work, and breaches of contract. Design professionals, in particular, should carry this coverage. Your insurance professional can help you select a policy tailored to the landscaping business.
Employment practices liability insurance
As you expand your business and take on larger jobs, you’ll need to hire additional workers. You may be used to running things yourself, but you won’t be able to do that with bigger projects. You’ll need to delegate, which increases the possibility of employment practices wrongdoing.
Employment practices liability insurance (EPLI) covers liability issues regarding hiring, firing and discrimination. Discriminatory hiring, sexual harassment, retaliation and wrongful termination are just a few claims you could face. These types of claims can be quite costly. EPLI policies are designed to pay your legal expenses if a claim occurs.
A good EPLI provider will work with you to ensure you have the human resources procedures in to prevent wrongdoing. These should include written policies against discrimination and harassment and consistent real-life adherence to fair practices.
There’s a lot to consider in commercial landscaping, from bidding on contracts to hiring a full-time crew. But don’t forget about insurance as you focus on building a successful business. Give us a call today and let’s talk about protecting your firm so you’ll have the peace of mind and confidence to take on those large accounts.
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