Insurance Tips For the Green Industry – General Liability

Liability Insurance Image

Insurance Tips For the Green Industry – General Liability

Liability Insurance Image

General Liability is defined as; “bodily injury or property damage caused by direct or indirect actions of the insured”…essentially it’s coverage for things you or one of your employees do to someone else or someone else’s stuff.  In the contracting business the basis for premium is payroll, in the retail or Garden Center business the basis for premium is revenue.  You should have all disciplines stated on the policy, even if there is no payroll associated “if any” is the official insurance term; irrigation (plumbing), lighting (electrical), hardscapes (masonry), snow removal (street cleaning), lawn care, landscaping, etc.

At a minimum you should have standard limits of $1M per Occurrence and $2M Aggregate.  Be sure to include “Completed Operations” and “Product Liability” with the same limits of coverage.  Example of Completed Ops….a Garden Center who works on people’s lawnmowers doesn’t tighten the blade down, they take it home and it injures the user.  Example of Product Liability….you hang Christmas lights on someone’s house and they short out and cause a fire.

Herbicide/Pesticide coverage should be included on all Green Industry policies.  It covers damage you do to Mrs. Jones prize roses or Mrs. Jones entire garden!  If your business is Lawn Care Application and over 40% of your revenue is based on application receipts, you’ll need to add “Environmental Coverage” to your General Liability policy to cover the tanks and possible spills over top your auto policy limits while your trucks are on jobsites or en route.  If there is a spill, a Haz Mat crew will show up, clean up and send you a bill….that is not the time to find out you don’t have coverage for an environmental issue!

If you do any snow removal, make sure your policy is endorsed for it!  Every winter people will “slip and sue” regardless if you properly plowed/shoveled or applied ice melt in a timely manner.  It is a litigious world out there and you have to take every precaution to protect you and your business.

What happens if you hire someone as a subcontractor to do work for you and they don’t have insurance…who pays the claim for something the subcontractor does?  If he doesn’t have coverage then the liability for any damage he does will fall back to your policy.  In addition, if the subcontractor doesn’t have coverage, he will be charged directly to you at your payroll rate at audit time.  If you hire a sub make sure they are insured and to be sure get a copy of their certificate, that will serve as your proof at audit time.

If you are performing a service you have no coverage to do such as you have Lawn Care as your liability class but in the process of cutting down a large tree it falls on your clients house or car.  The insurance company may deny the claim because it is not a covered loss for a Lawn Care entity, or they will pay the claim and change your class code on your payroll to reflect the rate as an Arborist (5 times as much as Lawn Care) or they will pay the claim and cancel your policy.

A Certificate of Insurance is a legal document proving you have coverage and issued by your insurance agent or carrier. It shows the policy number, carrier, expiration date and limits of coverage for each line of business.  This Certificate is requested by clients or contractors for whom you may be a subcontractor.  Many of your clients are now requesting to be named as Additional Insured on policies.  It just means that in case of a loss, your liability policy will be first in line to the extent of limits on your policy.  Most carriers have a minimal charge to add Additional Insureds to your policy.

An Umbrella policy is also a wise choice for further protection.  It is an added layer of protection that goes on top all of your underlying policies just like, well, an Umbrella.  The premium is generally based on the amount of payroll in addition to the number of vehicles you have.  Limits of anywhere from $1M to $5M, depending on the size of business and the amount of risk you have is recommended.

It is wise to have an insurance agent familiar with your Green Industry business.

 

This post was provided by Tim Kearns, commonly referred to as the “The Landscaper’s Insurance Agent”; Tim is a parter at International Insurance Brokerage, LLC and can be reached through any of the ways listed below.

O-615-778-7667 | F -615-778-9615 | M-615-480-1057

IIB Website | Tim’s Linkedin Page | IIB Facebook Page

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