Understanding the costs involved with landscaping insurance

To understand the costs involved with landscaping insurance, the first thing to appreciate is we’re not talking about just one policy here.

Landscaping insurance is an umbrella term. It’s used to describe several different policies you might need if you’re in the landscaping and lawn care business.

Each one’s designed to cover the different risks you face as a landscaper or lawn care contractor.

Common landscaping insurance policies and typical cost

Landscaping insurance costs vary, depending on how many policies you buy, the coverage options you choose and the services you offer.

But as there are two or three policies most landscapers need, we’ll use those to give you an idea of the costs involved.

General liability — The cost of claims you injured someone (other than an employee) or damaged someone’s property. And slander/libel suits.

Business property — Your tools and equipment on-site and in transit, for loss theft or damage.

Workers’ compensation — Protects you from the cost of employee workplace injury claims (mandatory in most states).

Factors affecting landscaping insurance costs

How much your landscaping business insurance costs varies from business to business. As sole proprietor of a lawn care company, you might pay $500. Whereas if you run a larger landscaping firm with a couple of employees and offer services like tree stump removal, you could be looking at $5,000-$7,000+.

The costs are affected by the following factors:

Which landscaping services you offer

The landscaping services you offer affect your policy premium. Insurers classify your business as lower risk if you offer straightforward lawn care and yard maintenance. So you’ll pay less for a policy than a large firm offering tree surgery and excavation, for example.

A tree service company might pay, on average, around $1,600 a year for general liability insurance. While a landscape designer could pay as little as $500.

Where you’re based

Your business location can have a big impact on your landscaping policy price. If you’re based in California, you’ll pay more than you would if you were located in Ohio.

But it’s not just the state you’re in that affects the price. Where you are in the state is a factor, too. If you run your business in a district where houses are expensive, you may find your insurance premium is higher.

Your annual business income

Generally, the higher the amount of money your business earns in a year, the higher the price of your policy. That’s because insurers view you as having greater potential exposure (so you have more to lose if you get sued).

The value of your equipment/property

This one’s pretty straightforward. The more your equipment is worth, the more you’ll pay to insure it. But don’t be tempted to undervalue your tools. If they get lost, stolen or damaged on a job, you need to know you can get them replaced, like for like. And fast.

Whether you have employees

If you have even one employee, workers’ comp insurance is a requirement in most states. And adding that policy to your landscaping insurance bundle will increase your overall cost.

Your payroll

The cost of workers’ comp insurance is worked out using your annual payroll amount. It increases depending on the kinds of risk your employees face and the salary you pay them.

The deductible you choose

A deductible is the amount you agree to contribute to the cost of a claim. Typically, the higher the deductible you pick, the lower your policy premium will be.

Just don’t be tempted to choose a high deductible if it’s one you realistically can’t afford to pay if there’s a claim.

Coverage limits

The coverage limit you choose will affect the amount your insurance provider will pay out on a claim. The higher your limit, the more your policy will cost.

There are two types of policy limit:

• A per-occurrence limit — the maximum amount your insurer will pay out for one single incident.

• An aggregate limit — the maximum amount your insurer will pay out for claims made during your policy period – usually a year.

Most small landscaping businesses go for a general liability policy with a $1 million per-occurrence limit and a $2 million aggregate limit. But as your business grows, you may want to think about increasing your coverage limits.

We’ll be happy to talk it through with you. And we can get you the coverage that’s right for your business, fast.