Tag: Lawn Care

Insurance Tips for Lawn Care and Landscaping

There are many aspects to owning a landscaping business. Many aspects that have nothing to do with the actual work itself. Whether a business owner is dealing with finding the right employees, determining the right price to charge their customers or managing the day to day operations; there are always additional responsibilities pulling the business owner in a different direction.  One aspect that frequently gets looked over is purchasing commercial insurance for your landscaping business.  Here are five tips for finding the best insurance, saving money when purchasing coverage and how best to use your policy when a disaster occurs.

Get the answers to your Lawn Care and Landscaping Insurance Questions at My Insurance Question.com

Partner with an independent agent

Independent insurance agents are unique in that they can quote you policies from many different carriers and not just one or a select few.  The appetites of the carriers change from year to year for certain coverages and especially for different industries.  Some years, your premium may go up simply because the carrier has experienced a lot of losses in your industry of the last year or couple of years. As a result they raise the prices for that classification code.  Another carrier may not have experienced the same losses and may be more hungry to quote your policy.  An independent insurance agent has the ability to force carriers to compete for your business.  In the end this helps you get better coverage at rock bottom prices.

Make sure you are in the right class code

The Lawn Care and Landscaping Industry is an industry that has numerous general liability classification codes. If you do not give enough information to your agent, they are forced to guess exactly how much risk your business takes on. It is in their best interest to always assume more risk. Assuming more risk protects the insurance agency, but may cost your business more in unnecessary premium. These mistakes usually get fixed in the end of term audit, but even when corrected you still have tied up cash in unnecessary premium throughout the year.

What coverages can I do without?

Once you have taken care of finding a good agency to partner with and you have taken the time to make sure you are classified properly, it is important to ask your agent what coverage’s does your business absolutely need and what coverage’s your business may be able to do without.  At this point it is important to remember the agent works for you.  If you are honest with the agent about how much risk you are willing to take, they should be able to give you the proper information to cover your business as you prefer.  It is important to remember that insurance agents not only interact with business owners when they are selling coverage, but also when the worst of the worst has occurred.  The agent may be offering you an extra coverage because they have interacted with a business owner in the past who had a claim occur at their business where they were not covered. Those are never easy conversations to have.  Depending upon the size and severity of the disaster having the right coverage may be the difference between your business closing the doors for a week and never opening again.

Ask for available credits and debits

The best way to find the best price on coverage is to tell your insurance agent what you value in the buying process.  Insurance agents talk with many different people from many different walks of life.  One customer may want to get through the insurance buying process as fast as possible so they can get back to running their business.  Another business owner may not mind if it takes a day and a half of their time in order to save an additional five percent.  Let the agent know early and often what you value.

What do you do when your business has a claim?

It is common for a business owner to think bad things will not happen to their business, but the most successful businesses are those who have a plan in place for when things go wrong.  Part of that plan should be having the proper insurance policy in place.  When an occurrence eventually takes place, there are several steps you as a business owner can take to speed up the process of getting your claim paid and get your business back up to normal operation.

When you do have to make an insurance claim it is important to inform both your carrier and your agency.  Do not be upset if your agency informs you to contact your carrier.  It is the job of the carrier to process the claim, not the agency.  At the same time, it is equally important to keep your agency in the loop.  In the unfortunate case the carrier is not living up to their end of the bargain, the agency can contact them on your behalf.  If you have injured workers, make sure they are going to medical facilities that are properly prepared to process the workers’ compensation system within your state.  Your carrier can help you find the proper facilities.  This can drastically limit the severity of a claim and it can allow your injured worker to get the best care quickly.  The better care they get can result in the getting back on the job quicker and with the least amount of doctors’ visits possible.  Keeping the injured worker on your side is important.  If this process runs smoothly it will make your employee happy and motivated to return to work.  It will also help your insurance carrier by limiting the amount of the claim.  THis will prevent too much damage from being done to your businesses experience modification rating.  The Experience Mod is one of the main ways carriers determine how much they will charge you for premium.

Do not be alarmed if a claim stays open for a period of time after your business has gotten over the claim.  Insurance agents do this in order to not have to open a second claim.  A second claim will also impact your experience modification rating.  The carrier does this because an injured worker may return to work and reinjure themselves.   Sometimes this can happen weeks or even months after the injured worker has returned to work.  If this causes your business to file a second claim it can have a damaging effect on your rating resulting in a higher rate on premium.

 

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.