The art of landscaping has evolved, and with it, the coverage needed to protect your landscaping business. The complexities of the modern landscaping business can lead to misappropriated coverage as well as unnecessary and excessive insurance premiums.
Here are four important ideas to keep in mind when insuring your landscaping business:
1. Determine your company’s niche within the landscaping industry. Whether you have one specialty or many, pinpointing your company’s focus is the first step to ensuring proper insurance coverage. For example, say you intend to expand and modernize your landscaping business by following the environmental trends. You might sell some old equipment and add xeriscaping to your offered services. Conserving water through creative landscaping, however, comes with the need for certain operational changes. The purge of equipment as well as the addition of a new service can change the class of business for your company. The class of business your company falls under determines the risks that are being covered. Exposing yourself, your employees or your clients to uninsured risks is dangerous and can result in legal ramifications.
2. The insurance needs of your landscaping business will vary based on whether you operate as a company employing subcontractors or as a subcontractor employed by another company. When employing subcontractors, it is important to note they may not be fully covered under your current insurance policy. If they are not properly insured, you may be fully liable for any damages they cause. In employment agreements, require your subcontractors to be individually insured. Require a hold-harmless clause that ensures you are not held liable for damages caused by your subcontractors. Keep in mind, your policy may change based on what subcontractors are working for you. If the service they provide comes with high-level risk, your premium could outweigh your entire project profit. As a subcontractor, a hold-harmless agreement is valuable as well.
This protects you from liability if there are damages caused by your employer during a project. It is important to clearly state the job requirements and expectations within agreements between employers and subcontractors. This eliminates confusion during projects and maximizes job efficiency. Also, your customers need to be aware whether the work will be performed by your company or a subcontractor. If a customer has a grievance with the finished product and they are not properly informed, your company may be held responsible.
3. Any industry that relies on whirring blades, navigating heights and falling objects can be a dangerous environment in which to work. And that sums up the landscaping industry. Safety should always be paramount, which stems from proper training on how to use equipment, including personal protective equipment and work-appropriate attire. Any workplace injury can drive up insurance premiums. You should also be aware that what you are saying in your marketing materials and website can affect your insurance premiums. Any marketing photos of employees at work should be screened to ensure they are following proper safety procedures and wearing proper safety gear. If a client comes forward with a claim for damages, that content is easily accessible and can potentially be used against you. It is absolutely essential to be honest in your promotions.
4. Is your business legitimately able to execute every service you promote? Any service your business is currently promoting for which you are unqualified or lack the proper equipment to perform should be removed from all advertisements. Performing services for which you are unprepared is dangerous for you, your employees and your clients. In the instance that someone is hurt or causes damages while conducting a service improperly, you may have to forfeit insurance coverage.
Today’s landscaping businesses are larger and more complex than ever. Define your niche. Confirm your class of business. Create deliberate and conscientious agreements with subcontractors. Produce honest and accurate marketing campaigns. Concern your business with the pursuit of safety and security. These elements will guarantee you the best possible insurance coverage as well as a reasonable and moderate premium.
Finally, with growth comes new concerns and new responsibilities. Don’t get into a position where you find yourself outgrowing your insurance coverage, and by doing so have now put yourself and your business in harm’s way if things go south. Meet with your insurance professional to determine if you have adequate coverage, both now and with the anticipation of future growth.
Christopher Dik is a Property & Casualty Consultant with Knight-Dik Insurance Agency, Inc. in Worcester, Massachusetts. He has nearly 40 landscaping clients, ranging from one employee to a company with 30 employees and 50 pieces of equipment. He can be reached at cdik@knightdik.com and by phone at 508-756-6353.
