3 Things to Know About Insuring Your Landscaping Business
August 13, 2020Finding an insurance policy for your landscape contracting business is not particularly hard to do. Many insurance companies offer a variety of products to fit most landscaping businesses. Commercial Package Policies (CPP) or even the more standardized Business Owner Policies (BOP) are readily available from many national and regional insurers for insuring your landscaping business.
Initially, the insurance buying process for this type of business is straight forward, especially for landscaping companies that are doing the basics of lawn care and landscaping. However, the seasonal nature of landscaping contractor businesses often leads them to look for other revenue streams as the seasons change.
This can create the need for a more nuanced insurance conversation and give reason for an independent agent to look for different coverage options and insurance carriers in order to comprehensively cover all aspects of the landscaping business. Here are three scenarios that can change the outlook of the landscaping insurance policy you will ultimately need to purchase to cover the risk exposures present with your unique, individual business pursuits:
1. Above-Ground vs Below-Ground
Minor Above-Ground Excavating
Minor excavating for landscaping projects is most likely not cause for concern for a company that insures landscape contractors. Most landscaping will, at one point or another, require some minor earth moving.
Creating a drainage swale, raised beds, or laying a footer for a retaining wall around a backyard patio are all minor forms of excavating that are common to most landscaping contractor businesses.
Heavier Below-Ground Excavating
However, if you are engaged in heavier excavating, like underground drilling for water, electric or sewer lines, and other projects that require more intensive underground work, the company quoting your insurance will want to know about it.
Not all insurance companies who write policies for landscapers have the “appetite” for this kind of additional risk exposure, and their landscaping contractor policies are not priced accordingly. This means that the company may decline to offer a quote, or refuse to renew a policy if they discover that this type of operation exists.
Disclose All Aspects of Your Business
Since insurance policies are written as contracts of good faith, it is important to disclose all aspects of your business to the insurance company to ensure that coverage is not denied if a claim arises. This is imperative for properly insuring your landscaping business.
In some cases, a claim arising from an undisclosed type of business activity may still be paid by the company, but it will often be followed by a policy cancellation or non-renewal. This leaves the insured business to shop for insurance after a cancellation.
This will serve to greatly limit the options of carriers you have at your selection going forward, since some companies will not write an account that was canceled, non-renewed or has claim activity within the past 3 years. In the worst-case scenario, an exclusion could be contained in the policy language for claims arising from specific types of activities, which leaves the policyholder to pay the damages out of pocket.
This is one of the big reasons why you should always avoid insurance coverage lapses. As long as you are upfront with your agent and insuring company about the scope of your landscaping business, these exclusions do not pose an issue, since an experienced independent agent will seek to pair you with a policy that provides your business with the comprehensive coverages you need.
2. Tree Trimming
Tree trimming can be a good source of income for landscaping companies as the summer mowing season draws to a close. However, insurance companies look at the inherent risks of each type of business pursuit that your entity embarks upon. The risks associated with tree trimming are different than those presented by lawn care or basic landscaping activities.
Extra Liability Risks
Falling branches pose a property liability risk to dwellings, outbuildings, and other landscaping. Likewise, the workplace hazards to employees are increased when a landscaper is conducting tree trimming activities. For this reason, some insurance companies will opt out of insuring landscaping companies that offer tree trimming.
Higher Premiums for Coverage
It’s important to weigh the amount of tree trimming your company does, and the revenue it generates, with the potential for higher insurance premiums to insure this business activity. Not only will it most likely raise your liability premiums, but it will also almost certainly limit the insurer options available for you to choose from.
Limiting your insurance options will make it more difficult for you to find the most competitive pricing available since you will first need to find a company that is willing to insure all aspects of your business entity’s activities.
Potential Challenges for Worker’s Compensation
Secondly, if you have employees, your Worker’s Compensation premiums will be significantly affected by adding tree trimming to your service offering. Employees who are engaged in both “regular” landscaping and tree trimming will be categorized under the more expensive arborist code for calculating Worker’s Compensation premiums.
This can greatly increase your costs, but often will also make the business ineligible for many insurance carrier’s Worker’s Compensation programs. This means you might end up getting Worker’s Compensation insurance through a State Fund, which is, in almost every case, the most expensive place to buy WC insurance.
3. Snow Plowing
Snow plowing is another off-season business pursuit that is a natural fit for many landscapers. In many cases, the company already has the trucks and trailers to haul the equipment, and the investment into a snow plow is easily justifiable and can be turned into a fully-funded and profitable endeavor after just one harsh winter season.
Incidental Snow Plowing
The way that each insurance company offers coverage for snow plowing will be different. Some insurance companies may be comfortable insuring “incidental snow plowing” and add the liability for this business operation to the policy for a flat charge. If you are plowing a few neighbors out after a winter storm or two, this type of snow removal insurance coverage might be all you need.
Bigger Contracts for Snow Plowing
For other landscaping businesses that see a significant amount of their annual receipts coming from snow plowing work, the insurance company may decline to quote the policy or they may ask for more information to better understand the operation they are insuring. Additional information might include the types of contracts for snow plowing in which your company is engaged.
For instance, is it residential plowing, plowing at commercial strip malls, or a contract with a municipality to plow public thoroughfares? Additionally, they will likely ask for the receipts your business takes in for snow plowing to gauge the size and scope of the risk exposure. These factors will affect the price and/or quote offering from the insurance company.
Remember to be up-front with your independent commercial insurance agent regarding all aspects of your landscaping business so that they can tailor a policy that will meet all of your insurance needs. The worst type of claim is an uninsured one, so be sure that you take the time to have a detailed consultation with your agent about your business.
An experienced and reputable insurance agent will be one that is dedicated to getting you the right coverage for the best value they can find. So, finding an agent that you can trust and one who has multiple company options is an important part of the insurance buying process and in properly insuring your landscaping business, even if all you need is home-based business insurance for a small side operation in your neighborhood.
If you would like to discuss the insurance options available for your landscaping company, give one of our independent commercial insurance agents a call at 1-800-537-6880 or 717-665-2283.
Disclaimer: Information and claims presented in this content are meant for informative, illustrative purposes and should not be considered legally binding.