Tag: 0042

6 coverages every Lawn Care or Landscaping business should carry.

Lawn Care and Landscaping is a diverse industry and with that diversity comes a lot of risk. How you go about protecting your business from those risks can make all the difference in the long term success of your business. Some landscaping businesses simply mow lawns, others lay sod and plants shrubs, some even climb several feet into the air to work on trees and others grow and sell plants at one central location. No matter what type of landscaping business you are running, here are 6 coverages that every business in this industry should carry.

  • General Liability
  • Workers’ Compensation
  • Commercial Auto or Hired and Non-owned Auto
  • Inland Marine
  • Commercial Property
  • Business Owners Package

General Liability

General Liability Insurance is a policy that most every business needs. Depending upon the state and industry you operate in, it is required by law to be in business. For the lawncare and landscaping industry this coverage can prevent your business from damage that is caused to third parties by you or your employees. This can apply regardless of whether the incident occurs on your property or at the property of the customer.

Workers’ Compensation

In 48 out of 50 states workers comp is required by law. What you pay in premium will depend on your experience modification rating and the NCCI class code for your business.  Lawn care and Landscaping is an industry that has several classification codes which include: 9102, 0042, 9182, 0106, 9220, and 9016.

Commercial Auto or Hired and Non-owned Auto

Commercial Auto and Hired and Non-owned Auto Insurance are two coverages that deal with vehicles being used for business purposes. Which of these two coverages your business needs is determined by whether or not the business owns the vehicle that is being used for daily work. If you have employees using their own vehicle as a part of their job than you need Hired and Non-owned Auto Coverage. If you are leasing the vehicle for the season, than this is the coverage you need as well. If your business owns the vehicle than you need commercial auto insurance.

Inland Marine

Inland Marine Insurance Coverage is also known as equipment coverage or floaters coverage. These terms are used because this insurance is for equipment not covered by your property or auto insurance policies and it is usually equipment that is going to be in transit. If you have a trailer with several pieces of equipment that is going to be transported to several locations throughout the day than you need this type of coverage. This could also be necessary for greenhouses if they are having plants delivered to a clients location. while the products are being transported they would be covered by this policy.

Commercial Property

If you own property, no matter how big or small than you need this coverage. Without it you can put at risk everything that makes your business run. Unless you can afford to replace the property and everything inside it than you need this coverage. This policy can usually be added to  BOP for minimal cost to the business.

Business Owners Package

Most insurance carriers have what are called Business Owners Packages designed for each industry and each classification code. Through their experience with claims in each industry, each carrier has a basic recommended package of coverage they deem appropriate for each business. These packages can be adjusted based on the industry you are in and the amount of risk you as a business owner are comfortable taking. This is where the advice of an experienced insurance agent who you trust can be very valuable. An experienced agent should be able to lay down the risks and rewards of each coverage and help you to make the most informed decision possible when buying insurance for your business.

 

 

SIC Business Insurance Codes:

•   0781- Landscaping and Planning

•   0782- Lawn and Garden Services

NAICS Liability Classifications:

•   541320- Landscaper Architectural Services

•   561730- Landscape Services

Business ISO General Liability:

•   Code: 97047- Landscape Gardening

•   Code: 97050- Lawn Care Services

Common Workers Compensation Class Codes:

•   0042- Landscapers and Drivers

•   9102- Park Maintenance, Lawn Care, and Drivers

•   0106- Tree Pruning or Spraying

Talk with your agent.

In today’s business world, time is of the essence for all business owners. When purchasing something for their business, many business owners want it done fast and cheap. They may have an inclination to rush through the buying purchase or to only focus on price. In many instances this may be wise, because their time is more valuable running the business than trying to save on buying whatever is needed for that business. When it comes to purchasing commercial insurance this is not a good idea. In this instances it is crucial for business owners to take the necessary time to have a long honest conversation with their insurance agent.

In conversations I have with agents in the insurance field, they all say rushing through the buying process is a mistake far too many business owners make. This is where a little time on the front end may cost the business owner some time away from their business, but on the back side it can save their business hundreds if not thousands of dollars when a claim does occur. During these conversations the agents are typically trying to get as much information as possible about the daily operations of your business. They understand business owners may be shopping around to more than one agency and that their time is valuable, but rushing through this process can cause your business to be under-insured or to pay too much in premium.

These problems frequently come about because business owners do not inform their agent what exactly the business does and what the business does not do as a part of their daily operations. Insurance companies are in the business of analyzing risk. It is in their best interests to assume more risk rather than less. They can only assume the risks of your business based on the information you provide them with. If you do not provide them with the enough information they frequently will assume more risk, which costs more in premium.

In most industries there are numerous industry classification codes. In most states these classification codes are determined by the National Council on Compensation Insurance (NCCI).  These classification codes separate businesses by the type of work they do or do not partake in. Take landscaping as a prime example. There are at least a half a dozen class codes for lawn care and landscaping based upon the daily operations of your business. The two most common NCCI classification codes for the landscaping industry are 9102 and 0042. 9102 is designated for lawn care or maintenance of existing lawns, where 0042 is designed for businesses that install lawns and beds. The second class code is more dangerous and has a higher premium. If you rush your agent through the quoting process, they may place you in the wrong classification code. This can cause your business to end up paying far more in premium than is necessary. These mistakes frequently get fixed during the end of term audit, but even when they do your business has still paid more in premium than was necessary. That means there is cash-flow your business could use tied up in unnecessary insurance premium.

On top of tying up cash in premium, another problem exists that a good insurance agent can help your business with. The problem they can help your business with is to understand what exactly is and is not covered under your different insurance policies. This can help you fill in coverage where gaps might exist. This is where an agent can help you determine if you need a coverage like Business Loss of Income Coverage or Data Breach Insurance. 

Business loss of income coverage is a policy that is a type of commercial property insurance coverage that kicks in when a business suffers additional loss of income suffered when damage to its premises causes a slowdown or suspension of its operations.  The damage has to be the result of a covered loss. Take for instance if your building experiences a fire. Your commercial property insurance will cover to repair the damaged building, but it will not cover your business for lost revenue while you have to be closed for repairs. This is where business loss of insurance coverage kicks in. Many businesses who fail to secure this coverage do not survive when an occurrence happens.

Data breach is another coverage that is becoming more and more necessary. Many business owners feel they are too small or do not deal with computers or customer information enough to need this coverage. Take a commercial cleaning company for example. They have 5-15 employees and clean 5 office buildings and one retail store at night while the businesses are closed. Their employees only use a cell phone and never interact with a computer. Their business owner thinks they would never need something as advanced as data breach coverage. But what if you clean the offices of a bank and an employee of the bank leaves  a post-it note on their desk with the username and password for the internal system. If one of your employees finds this they could get into the system and access the financial records of the banks customers. That is a need for data breach coverage. Two of the largest data breaches in history, Target and Home Depot, were started by hackers first accessing a small business who was a partner of the larger business that got hacked. You do not have to be a big company nor do you have to store lots of personal information in order to be a target for criminals.

All of these and other problems can easily be prevented by taking the time in the first place to speak long and honestly with your independent insurance agent. They can help you understand what risks your business because not only do they interact with business all the time when they are purchasing insurance, but they also frequently interact with business owners when the unfortunate accident occurs. From that experience they can help you prepare for when dooms day comes for your business. If you take this time to properly protect your business it can be the difference between closing your doors for a short time and closing your doors forever.

Why does my class code matter?

Workers Compensation Insurance is required by law in 48 out of 50 states. It is offered based on a classification code system developed by the National Council for Compensation Insurance. There are more than 700 industry specific classification codes. Some industries have just one, some have many. For this reason, it is very important for business owners to take a few extra moments and speak with their insurance agent when buying or renewing their commercial insurance policy. It is crucial for a business owner to talk to their agent about the daily operations of their business. The key to getting the best policy on the best insurance package is to speak open and honestly with your insurance agent. 

Remember that your insurance agent is on your side. They are there to help you get the fullest coverage at the best price possible. Your agent can only do this if you give them all the information possible to negotiate on your behalf with the insurance carriers. This is where having an agency that has the ability to quote your policy with many carriers is important. Some agencies only carry policies with a few select carriers. If your business is in a difficult to quote classification code than this can make it difficult to get a better price or get any coverage altogether. So having a relationship with an agency that can quote from a variety of carriers is important. 

Next it is also important to ensure your agent and your carrier are aware of all the operations your business does and does not partake in. This can cause you to overpay or underpay on premium. Regardless of the amount of risk your business takes, it is very important to be classified correctly in the proper NCCI classification code. There is an audit of your business done at the end of every term. Usually if your business is coded incorrectly it gets caught during the audit. If you are actually supposed to be in a riskier code than you will end up owing more in premium. If you should be in a less risky code it can result in a refund, but you have been paying more in premium throughout the year. Typically, that is cash flow you could be using for other more urgent business needs. 

A few industries that give us some perfect examples of industries that have classification codes that could be incorrectly coded are landscaping and commercial vs. residential cleaning companies. For example, landscaping  has two class codes 9102 and 0042. 9102 is for businesses that only maintain existing lawns. 0042 is for businesses that install lawns, plants and other beds. 0042 is more dangerous. Because it is a riskier classification code the premium for these types of businesses is higher.

commercial and residential cleaning companies include the classification codes 9102 and 0042.

Another example of an industry that has multiple classification codes is the cleaning industry. Commercial cleaning is classification code 9014 and is the less risky class code. Residential cleaning service companies are class code 0917 and they cost more. The reason for a larger risk in the residential industry is because of the fact the employees are driving to one or more off site locations. Commercial cleaning companies typically have employees come to one location, like a mall, and clean one or more business at that one location. For residential cleaning companies, they are liable for any injuries that occur while the employee is driving to and from the different locations. These types of injuries may not be frequent, but when they do happen they tend to be much more expensive than a simple slip and fall while cleaning a building.

So the most important things any business owner can do to ensure they are classified correctly is to speak open and honestly with their agent about the what their business does and does not partake in. Again, this can prevent both over and under paying on premium. Regardless of whether you are in a a fairly risky class code like landscaping or you have a bunch of employees who sit around an office all year, it is imperative to have your business classified correctly. This can prevent your business from over paying throughout the year or from having a surprise when you are audited at the end of your term.

6 ways to save when shopping for Workers’ Comp Insurance

Workers’ Compensation is one type of insurance that is required by law in nearly every state in the country. Because of this it is imperative that all business owners take advantage of every way they can to save on this required coverage. There are a few things business owners can change about their daily operations that can have a noticeable effect on what they pay for worker’s compensation insurance.

Keep a well-documented safety program.

Keeping a well-documented safety program includes a return to work program for injured workers and a detailed driver safety program if you have workers who will be driving as part of their normal work related duties. Safety programs do not have to take a lot of time away from your normal business routine to help you save your business money. It can be as little as a 15-minute huddle once a week. The meetings do need to be regular, but they can be weekly, bimonthly, monthly, whatever you determine is best for your business.  Attendance should be recorded as well as the subjects covered at each meeting. A well-documented safety program can really benefit your company when you do have an injury. If you have a well-documented safety program in place than your agent can speak with your insurance carrier and defend your business as one that is taking the needed steps to limit claims. If you have these programs in place the agent can more easily show the injury as more of an outlier and not a sign of trouble ahead.

 

Make sure you are in the proper classification code

Being placed in the wrong classification code happens more frequently than one might imagine. This can change what you pay in premium both positive and negative. There is an audit at the end of every term so this can cause unexpected costs at the end of the year for many businesses. Landscaping is a good example of an industry that has two classification codes that are much different in price. The two main classification codes for landscaping are 9102 & 0042. 9102 is for businesses that maintain already existing lawns and garden beds. 0042 is for businesses that design and install lawns and beds. This is a more dangerous undertaking and costs more in premium. If you are not crystal clear with your agent what your business does on a daily basis, they may assume you are in a riskier classification code. This can cause your business to pay more in premium than it has to. This can be a problem even if you pay too little because an audit is run at the end of every term and if you are than classified correctly, any premium that is owed will then be due. 

 

Actively ask your agent for approved credits and discounts.

Credits and discounts are available for many industries. They are offered by the state and the individual carriers to help business owners save on premium. Your agent has to ask for them in order to get the full amount of discount possibly available. If you bring this to their attention as a priority early in your interaction with them they will know to actively seek the best price. Insurance Agents have to deal with many business owners on a daily basis and the priorities of each business owner may be very different. Many business owners value their time above anything else. These business owners may rather pay a little more in order to just have the process over. If price is an important determining factor in your choice to buy commercial insurance, then let your agent know this up front. That way they can actively seek out every credit or discount available. 

 

Price shop, but do it carefully. 

You should always shop your policy around to make sure you are getting a competitive rate.  This is the first thing to do when you want to save on commercial insurance.  Switching for a moderate discount is not advised. This becomes important when your business inevitably has a claim. Your business will have a claim at some point in time. If you are a customer that has been with the carrier for several years, they are less likely to raise your rate on decline coverage of you altogether. If you are a business that switches carriers every year for a modest decline in price than you are much more likely to be dropped from coverage when a claim does occur. If you are dropped from coverage and cannot find insurance from another carrier than you are forced in to what is called the state fund. Policies in the state fund are much more expensive and depending upon your state once you are in the state fund you must remain there for 2-4 years. 

 

Have an informative website.

A website is beneficial to your business in more ways than just marketing. When you are applying for commercial insurance your agent is going to ask several questions about your daily operations. They are going to investigate it and so is the underwriter of the insurance carrier you are getting a quote from. If you tell them, you only do one type of business and your website shows you are doing something else than you better be prepared to explain what you do or do not do on a daily basis. On the contrary if you have a website that confirms what you have told your agent it will strengthen your relationship with them. This will help when and if you have a claim and need them to help you explain what happened to your insurance carrier. 

Consider changing the limits to your policy

The limits of your policy are important to protect your business, but they are not set in stone. They are not the same for every business owner either. Some business owners want to protect their business fully. Even protect it beyond what could imaginably happen to their business. Other Business owners are quite comfortable taking on more risk. If you are one of those business owners than lowering your limits is one way to lower what you pay in premium. Now most carriers will have a minimum amount you have to take, but if you are above those limits it may be worth your while to speak with your insurance agent about the pros and cons of lowering those limits. As long as you are making an informed decision and you know the risks you are taking lowering the limits of your policy can be an effective way to save on premium.

Lawncare & Landscaping

Lawncare and landscaping businesses are similar yet very different.

As a business owner of a lawncare or landscape company you might have had to shop for insurance. You might have had to do this to either to meet state requirements or to make sure your business is protected just in case an injury occurs to an employee. Recently I have taken many phone calls from owners of small lawncare or landscape companies that have been asked by a client, sometimes even a home owner to provide proof of work comp coverage before they are grated the job or bid. Whether you have a small or large lawncare company chances are you have had to make a call or two to obtain a work comp insurance certificate.

When going through this process have you ever wondered how your company is classified? There are two class codes that contemplate lawncare and landscaping, 9102 and 0042.  The most qualifying question to determine what class code you are in is, does your company primarily engage in maintaining already existing lawns and garden beds or is your business designing and installing landscape or flower beds. Another deciding factor is if there will be any installation of paving stones or rock beds. The class code 9102 is designated for lawncare or maintenance of existing lawns. Snow removal will also be covered under 9102 and should be discussed if there is snow removal operations in the down season of lawncare. 0042 class code is designated to design and installations of lawns and beds. Any sod laying or pavers would also fall under the 0042 class code. However both class codes do contemplate the applications of fertilizers and insecticides.

One aspect of both classes of business, that I feel I must bring up, is tree trimming. If at any time there is tree trimming the class code 0106 would need to be added to the work comp quote. Designated payroll can be added to that class or it can be added on an “if any” basis. I also must fully explain that the 0106 class code is considered high risk. It is very difficult to place with an insurance carrier.

When calling in or submitting an online quote, the first couple of questions back to you will most likely be:  How many employees not counting the owner are there and what type of lawncare are you providing? If the answer to the first question is there is only the owner, which some times is the case, that would be an owner only policy. If there is one employee or more there will need to be included a total annual payroll. At that time we would figure out how to best classify you. lawncare or landscape will find the best price and insurance carrier for your company.

Lets talk about Landscaping!!

When I first started doing workers compensation insurance, I had the privilege of writing a lot of landscaping types of risk. I have never been a landscaper, so it was difficult to understand all the aspects of landscaping insurance. For example, are you just mowing yards, are you trimming bushes, are you cleaning the yards, are you replanting the grass or flowers, are you doing edge work? Who knew there would be so much that goes into just one risk?

Landscaping insurance liability questions at myinsurancequestion.com

So, while you ponder on the type of landscaping you do, let me tell you there are plenty of carriers that love writing landscaping insurance.  Except tree trimming and that does not classify as landscaping!! So moving on, I find it very interesting that all the types of work my clients have been doing and the challenges I had to write them. So let me walk you through the process of how this is done.

First, we need to talk about exactly what you do. Never be scared to tell an agent what you actually do on a daily basis. If you cut grass, say that. If you trim trees, tell them! I can’t stress how important it is that you tell the agent exactly what you do. The agent and underwriter will do research on your company and we will scroll through every picture and question whether or not you are doing something… so tell us everything!! It is beyond stressful for the client (i.e. you) to have to wait for a carrier to quote your work comp landscaping insurance policy and at the very last minute tell you they found some issues with what you say you do. Especially if you didn’t tell them that you did something. If you have a website that says you do tree trimming, we will know. If your Facebook page has pictures of you climbing ladders to hang plants, we will see them. So tell us exactly what you do. We understand you might have been declined by a lot of other agents, but we are trained to write tough/difficult risks, or we can tell you who to call exactly. We won’t waste your time and we don’t want to waste ours.

Secondly, after you have told us exactly what you do, we will discuss the payroll and employee count. No agent has your actual monthly payroll reporting in front of us, so we need you to be honest. If you pay one of your landscapers $10,000.00 a year, tell us! Honesty is the best policy. If you are starting out as a new company, we will help you figure that out.

Thirdly, this is the best part, we quote your landscaping business. Believe it or not there are a lot of carriers that are competing to write landscapers. You need work comp for a reason, so let us find the best price for you. I get how stressful it is to try to find coverage in your area… but let me take that stress away. I can shop dozens of carriers and I can get you the best coverage for the lowest price.

In the past three months I’ve spoken with 19 landscaping companies. Seven of those companies have become my clients.  I’ve used four different carriers to place those policies. That shows how much our insurance carriers are willing to compete against each other for landscaping insurance. Landscaping has so many aspects to it that it is a fun risk to write. Also companies are competing for the general liability and business owners insurance too.