Insurance is a legal contract between your landscaping business and the insurance carrier. The contract outlines the conditions, exclusions, coverage limits, and many other variables related to how the insurance will apply in a claim situation. It is important to review all policies when you receive them and understand the key concepts of what the policy will and will not cover. As the single source for landscapers’ business insurance, we recommend that you call your BearWise Landscapers agent to review any coverage questions you may have. Our agents will also take the time to sit down with you and discuss the different aspects of your insurance policies.

On Equipment Floater and Commercial Property insurance policies, we often run across landscapers that are unaware of the way their insurance carrier is valuing the covered property. Your insurance policy will state the way in which it values property and you should consider this when purchasing insurance. The type of property valuation not only affects the policy’s premium, but will greatly affect the amount your business recovers in the event of a loss. There are a few ways of valuing property covered by insurance policies, but the most common ways are through the Actual Cost Value (ACV) and the Replacement Cost Value (RCV).

Actual Cost Value – This approach to property values will judge the value of a stolen lawn mower by the current market value of a similar mower made in the same year with just as much wear and tear from the hours it has been used. The insurance carrier will write a check to your business for this depreciated value and that will be the end of the claim. In most cases, the landscaping business has to pony up more money to purchase another mower.

Replacement Cost Value – This approach to property values will judge the value of a stolen lawn mower not by the market value, but by the cost it takes to replace it. The replacement lawn mower will be similar in its functioning ability and equal or greater in overall value to the one that was stolen.

For landscapers, you need to make sure your equipment floater and commercial property insurance policies use the replacement cost valuation. This simple change in your policy will hardly affect your premium and will potentially have a huge impact on your business when you have a claim. If you have any questions about your current insurance policies, please contact me or one of our other licensed insurance professionals.

The Agent Articles section of BearWiseLandscapers.com allows our insurance agents to provide practical information for landscapers. These agents can also obtain quotes and establish a custom insurance program for your landscaping business through our access to a variety of insurance carriers. This agent article is filed under 3 Equipment Floater, 9 Commercial Property, and you can follow comments to it through the RSS 2.0 feed. Feel free to leave your own response below: