Coverage When It Counts
Is your lawn and landscaping business fully insured? When it comes to protecting your business with the right insurance, it’s essential that you make wise choices. Unfortunately, it’s not uncommon for owners to be underinsured or to make poor coverage choices. That’s why we’ve reached out to some pros to share their best tips from personal experience—and from directly inside the insurance industry.
Full Coverage For The Best Price
According to Scott Young, director of small business underwriting at Progressive Insurance, there are several endorsements that are sometimes overlooked but should be considered, depending on your specific operations. “For instance, if you apply pesticides and/or herbicides, make sure your policy provides liability coverage,” he says. “If you remove snow during the winter, you’ll want to make sure you’re adequately covered on your general liability policy. For landscaping businesses with employees, we recommend a business owner strongly consider Employment Practices Liability (EPL) coverage, which provides coverage if the owners of the business are sued by an employee for wrongful termination or hiring, harassment, and other employment related issues.”
In terms of limits, Young says that a business owner should contemplate buying the “at least $1 Million per occurrence limit” for both General Liability and Auto to ensure you are properly covered in case of a claim.
Bill Angle, management vice president of Welch Graham & Ogden Insurance, Inc., headquartered in Manassas, VA, adds that where most landscape companies fall short of coverage is in their failure to purchase an umbrella policy that would cover them in a catastrophic situation.
“When you have multiple employees riding around in vehicles, the risk is great,” he says. “So, we recommend at least $1 Million if not more, based on the size of your business. Unfortunately, we’ve seen enough accidents happen to know you absolutely must protect yourself.”
Andrew Pelkey, COO of North Point Outdoors, headquartered in Derry, NH, admits he learned this lesson the hard way. In 2018, Pelkey says that his company had a driver run a stop sign and hit a car with four passengers. While three of the four passengers sustained minor injuries, one was affected more severely.
“The claim was open for 15 months,” Pelkey says. “It closed out just under the insurance coverage cap. This immediately led us to look for higher coverage. Sometimes it takes an incident to bring to light a situation and the need for more coverage.”
Pelkey says the key to making wise choices is having a broker you can rely on.
“Depending upon the size of your firm, a third-party risk manager who can vet what your broker is presenting is also helpful,” he suggests. “The third-party risk manager can be paid on a flat type basis to evaluate. This prevents you getting a push in one direction or another by a broker motivated by the sale.”
It’s also important to avoid becoming complacent, adds Timothy Trimmer, President of Professional Grounds, Inc., headquartered in Lorton, VA with a branch in Manassas. Trimmer currently works with Angle of Welch Graham & Ogden—who saved him $40,000 a year from his previous carrier.
“It’s easy to get comfortable with your insurance company and never bid it out but companies really ought to put their insurance out to bid every two to three years to make sure they have the best rate,” Trimmer says. “When Bill [Angle] told us that he could save us that much I thought it was too good to be true. But we had a break-in only three weeks after switching, and $30,000 of equipment was stolen. It was all taken care of. You want to make sure you’re fully insured but for the best price.”
Putting Safety First
Of course, a large part of getting the best price for insurance also falls on lawn and landscape business owners. Trimmer says that owners must do a lot more than “pray they’ll never have an accident.” Safety has to become part of the everyday culture.
“You have to do what you can to prevent accidents from happening in the first place,” Trimmer says. “Here, we talk about safety every single day. This is something that also shows our employees that we truly care about them. If an employee has a suggestion for a way that we can be safer, we want to hear it. We welcome it.”
Trimmer also rewards employees for staying safe. They have a “Days without work injury” clock up—and at every 50 days without an incident they make a big breakfast to congratulate everyone.
While some accidents can’t be prevented, there are certainly enough that can be avoided with ongoing reminders—and keeping safety at the forefront of the company culture. Angle also suggests a helpful tip that Trimmer at Professional Grounds has since incorporated.
“At those Monday morning meetings, have the crew out there doing jumping jacks and stretching to make sure someone isn’t injured from an activity over the weekend,” Angle says. “If they can’t do the jumping jacks, they might have gotten hurt doing something at home. You don’t want that to suddenly appear as a work injury when they’re out in the field.”
With some safety-oriented changes, Trimmer has been able to bring his MOD rate (the “Modification Factor”) from a 1.3 to a 0.73—which translates to 57% savings. That has also put Professional Grounds in the premier tier—something that has allowed the company to bid jobs more competitively. Trimmer says it was achieved by “talking about safety every single day.”
Coverage For Snow And Ice, Too
For businesses that also perform snow and ice management services, insurance is truly critical. But Pelkey at North Point Outdoors has found that finding snow and ice management insurance is harder than ever.
“The risk is big, and a number of carriers no longer have the appetite,” Pelkey says. “Given our snow size of $2.5 to $3 Million, we are [glad] we have the carrier that we do and hope to maintain that relationship. Our process to offering snow services is backed by a strong safety culture driven by training. In New Hampshire, we have a certificate called the Green SnowPro that is backed by a New Hampshire RSA that helps provide protection from negligent slip and falls. I’d suggest those working in different states to see what is available to help mitigate risk for the carrier in order to look more appealing.”
Progressive’s Young adds that business owners should make sure they have coverage for completed operations.
“Most auto and general liability policies will provide coverage for any accidents that occur during the act of removing the snow, but there is a coverage gap once the work is completed,” he says. “The gap can be filled with a Completed Operations endorsement that protects the insured for any slip and fall accidents that may occur once their work is completed. Without this endorsement, contractors will have an uninsured exposure.”
If accepting a contract from a client (as opposed to creating your own), Young also says that business owners should always review their service agreements to see what they’re liable for.
“Depending on your customer’s contract language, your exposure may be more than you anticipated for snow removal operations,” he says. “An insurance agent can help determine if you have adequate coverage to meet the requirements outlined by your snow removal customers.”
Young says that if any higher hazard plowing is part of your scope of operations—such as huge shopping centers or airports—a specialized policy may also be required to ensure complete coverage.
Has COVID-19 Impacted Insurance?
The COVID-19 pandemic has affected life and business in so many ways. But, has it impacted insurance? Should you be making changes to your policy in the midst of this pandemic? We turned to Scott Young, director of small business underwriting at Progressive Insurance to find out.
“While liability claims involving COVID-19 appear to be unlikely, many policies do have a Communicable Disease Exclusion that removes any potential coverage,” Young says. “Contractors will need to continue to take extra precautions when working with customers, including following CDC guidelines and appropriate usage of PPE. If you have employees, strongly consider getting an Employment Practices Liability (EPL) policy. EPL has become a hot coverage in 2020, and it looks like that will continue into 2021. The decisions regarding layoffs, furloughs, hours, and benefits reduction, and FMLA can all lead to a potential EPL claim for a small business owner.”
As you plan for the future, it always helps to re-evaluate your insurance if there have been any changes in your company. As your business grows, there are many factors that can affect your insurance rates, says Young.
“We recommend your insurance company and/or agent regularly review your policies to ensure the coverages and specifics (i.e., drivers, vehicle values, etc.) are up to date and account for any changes in the business,” he adds. “Using a trusted insurance advisor and being transparent about your business operations will ensure you get the right balance of coverage and price.”
Lindsey Getz is an award-winning freelance writer based in Royersford, PA.
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