There’s a large selection of small business that provide landscaping and related lawn services. Landscaping is a broad category that includes mowing and lawn care, groundskeeping, landscape design, irrigation system installation, arboriculture (tree care), hardscaping, and tree trimming. All businesses that provide such services need insurance to protect themselves against lawsuits and damage to physical assets.
Many insurers that sell business insurance have developed specialized programs for small contractors, including landscapers. These programs vary. Some are designed for a broad range of businesses while others exclude contractors that perform certain activities, such as tree pruning. By choosing an insurance program designed for its type of operation, a landscaping business can obtain the coverages it needs at a reasonable price.
Risks That Require Coverage
While landscaping includes a wide range of activities, businesses that perform such operations face a wide range of risks. Because landscaping businesses perform most of their operations at job sites, losses they sustain often occur away from their premises. These include:
- Damage to customers’ property: Landscape workers may damage customers’ property while working at job sites.
- Damage to underground lines: Workers who dig underground may damage gas or electrical lines or water pipes. A severed gas line may cause an explosion or fire.
- Third-party injuries: Negligent acts committed by landscaping workers at job sites can cause injuries to customers, their employees, or other third parties. Customers could also sustain injuries at the company’s premises if the business maintains an office.
- Pollution: Some landscapers utilize fertilizers, pesticides or other substances that may cause illness or injuries to third parties or employees. These substances may also contaminate other people’s property.
- Auto accidents: Employees could cause auto accidents while driving to or from work sites. Such accidents could injure pedestrians or other drivers or damage their property.
- Employee injuries: Employees may be injured at a job site or in an auto accident while traveling between work sites.
- Damage to tools or equipment: Most landscaping businesses use tools or equipment to do their work. Some use heavy machineries like backhoes, graders, cherry pickers or cranes. Tools and equipment may be damaged, vandalized, or stolen at job sites or at the business’ premises.
- Errors and omissions: Businesses that give advice or hold themselves out as experts (such as arborists and landscape designers) could be sued for alleged errors or omissions.
Property and General Liability Insurance
Many of the insurance programs directed at landscaping businesses are centered around a business owners policy (BOP), a package policy that includes general liability and commercial property coverages. Either or both coverages can be extended by endorsements to meet the needs of the business.
General Liability Insurance
The liability portion of a BOP covers third-party claims against a business for bodily injury, property damage, or personal and advertising injury. Here are some liability coverage extensions a landscaping business should consider:
- Herbicide and pesticide coverage: An amendment to the pollution exclusion. Covers bodily injury or property damage arising from pollutants a contractor brings onto a job site in connection with work it’s performing there.
- Care, custody or control (CCC) coverage: An amendment to the care, custody or control exclusion. Covers damage to a customer’s property that occurs while the landscaping contractor is working on it.
- Automatic additional insured: Contractors are often required to cover other parties, like general contractors and property owners, as additional insureds. When automatic language is included in the policy, such parties will be covered without the need for individual endorsements.
The property section of a BOP protects the business against property damage to the landscaper’s buildings or personal property, including tools and equipment, located at its premises. A standard commercial property policy or BOP affords little coverage for property situated elsewhere.
- Contractor’s equipment coverage: Covers loss or damage to tools and equipment wherever the property is located. Coverage varies but most forms cover damage caused by any peril that isn't specifically excluded.
- Rental reimbursement: Covers the cost of renting equipment to use while the contractor’s damaged equipment is being repaired.
Besides basic property and liability insurance, a landscaping business is likely to need commercial auto, due to the necessity for a commercial vehicle to go to and from a work site, and workers compensation insurance, due to the nature of manual labor being more susceptible to injury. A business auto policy covers trucks and private passenger vehicles used for business purposes. It may include both auto liability and physical damage coverages.
Workers compensation coverage is mandatory in most states. Some states, like Arizona, require businesses to buy a policy even if they employ only one worker. A workers compensation policy pays the benefits prescribed by law to employees injured on the job.
Some landscaping firms may also need errors and omissions liability insurance. It covers claims seeking compensation for financial losses that result from the company’s negligent acts or its failure to provide the level of advice or service the customer expected. An instance where one would need errors and omissions liability insurance is if an arborist declares a fruit tree healthy when it is actually infested with beetles, and the beetles migrate and eventually destroy the customer’s orchard.
Two other coverages landscaping firms should consider are commercial umbrella and cyber liability insurance. An umbrella “sits on top” of primary general liability and auto liability insurance. It provides additional limits after the primary insurance has been used up in the payment of claims. A cyber liability policy protects a business against financial losses resulting from data breaches and other types of cyber attacks.