Owning your own landscaping company can be a smart way to turn your green thumb into a cash cow. Armed with just a lawn mower, edger and leaf blower, you can set out to cover the basic needs of your would-be customers this spring.
What you may forget among all of that lawn equipment, however, are your insurance needs. Even if you are just mowing lawns for a couple of neighbors, you need at least the most basic insurance coverage.
Why? It can mean the difference between success and failure as any unexpected event can tip the scales against a small company.
“Failure to insure against key liability risks is especially dangerous for small businesses,” says Loretta Worters, vice president of communications for the Insurance Information Institute. “You don’t have the financial resources of a big company to back you up in the event of a client lawsuit.”
Business Owner’s Policy Insurance
So now you know why your lawn care or landscaping business needs insurance, but where should you start? First, try a business owner’s policy. This type of policy is a cost-effective way to obtain the coverage you need in a single package instead of buying single policies for each of your insurance needs.
General liability is the most important component of a business owner’s policy for a landscaper. It covers expenses associated with bodily injury, property damage, personal injury and even advertising injury. If you have a very small business, then $300,000 in general liability should cover you and is considered a good starting point when thinking about basic insurance coverage.
Although a business owner’s policy covers many of your basic needs, lawn maintenance companies and landscapers should also consider additional types of coverage.
Errors and Omissions Insurance
Lawn care professionals provide services as opposed to selling a product, so occasionally, customers who are unhappy with the service may sue your company for damages, contending you injured them financially with an act of negligence, error or omission.
Errors and omissions liability coverage pays for the legal costs and damages connected to such lawsuits, which can help protect your business and financial security.
Even if you’re never sued, having errors and omissions liability coverage can give you a leg up on the competition.
“More and more clients require the professionals they hire to carry errors and omissions insurance,” Worters says. “You may risk losing the opportunity for a new project without it.”
Commercial Auto Insurance
You should also consider commercial auto insurance because you likely are transporting equipment to the jobsite. Your personal policy is not going to cover you if you are traveling for work.
How many vehicles do you use in your business and who is going to be driving them? Your policy rates could be impacted by the driving records of those who use them on a regular basis.
You also may be required by state law to carry auto liability insurance as part of your lawn care business insurance. This pays for medical treatments for those injured by your vehicles, as well as for any property damage your vehicle causes.
Workers’ Compensation Insurance
Most states require companies with a certain number of employees to carry workers’ compensation insurance in case workers are killed or injured on the job.
Landscapers need general liability insurance to protect them against claims that something they did or failed to do on a job injured someone.
Workers’ compensation insurance covers both acute and chronic occupational injuries and diseases.
An example of an acute injury is: A lawn maintenance worker falls through a metal grate and wrenches his knee, necessitating emergency surgery and long-term orthopedics.
An example of an occupational injury is: A secretary suffers a repetitive stress injury to his thumbs after typing eight hours a day for 12 years; he has to undergo surgery, therapy and rehabilitation.
Additional Insurance Needs
Lawn maintenance and landscaping businesses are unique because owners can easily take on a commercial job or perhaps be asked to do a light masonry project. That sounds simple, but doing commercial work could require a much higher liability policy that offers coverage in the millions.
Also, that masonry work could be excluded from your current policy.
And don’t forget the changing seasons. Mowing and edging can keep you busy in the spring or summer, but what about winter? Many lawn companies transform themselves into snow removal companies. That makes business sense, but make sure you have the right insurance for that, too.
Always explain any new business or expansion of your company to your insurer before you take action. If not, you could be putting your business at risk.