Lawn Care Equipment

I am often asked by landscapers about the importance of equipment floater insurance. Why can landscape equipment not be covered by regular property insurance or other insurance?

Here are three facts to consider about your business operations:

• 1. Lawn Mowers and other equipment travel to the properties of multiple clients each day.
• 2. This equipment therefore has a higher risk of not only theft but other causes of loss and damage.
• 3. This equipment also includes some of the most valuable assets of your landscaping and lawn care business.

There are many insurance implications to this information.

A typical property insurance policy will only cover your equipment while it is in your office building or other place of storage. A commercial auto policy may cover damage to your trailers, but it will not protect your equipment while on the trailer. To protect this equipment with insurance, a policy needs to be written and rated to cover valuable items while away from the premises of a building.

Equipment floater insurance is a type of inland marine insurance. It is specifically designed to cover your landscape equipment and tools while located anywhere in the broad coverage territory. Virtually any type of mobile articles, tools, machinery, and equipment (other than motor vehicles designed for highway use) can be insured under an equipment floater.

The price of equipment floater insurance is a good value for your business with annual premium rates ranging from one to four percent of the total value of the insured equipment. Some insurance carriers also provide discounts when this coverage is packaged into one insurance policy with general liability or commercial auto coverages. Other premium discounts may be available for safe storage techniques, theft deterrent systems, claims history, and equipment maintenance procedures.

Due to all of the equipment floater insurance questions we are receiving, I plan on writing more articles on this topic in the upcoming months. If you have any specific questions about the coverage, please feel free to contact me directly or one of the other insurance agents at our office. We are also available to offer comparative insurance quotes to lawn care and landscaping businesses in Florida.

Many landscapers view insurance as a ‘necessary evil’ and do not understand the advantages they receive when purchasing a required insurance policy such as workers’ compensation. Workers’ compensation is a great example because it is mandated by state governments, and landscaping businesses with employees are required by law to provide the benefits listed in their state statutes for injuries in the workplace. To see the significance of this coverage, please take a stroll with me back into history.

Textile Factory Workers

After the American Civil War ended in 1865, the Industrial Revolution made its way from Europe to the United States. Factories were built and many new industries emerged as others made technological improvements. The garment industry in New York and the surrounding areas brought attention to the plight of the injured worker. The conditions were particularly tough and the industry demanded high production. Through the turn of the century, the legal profession in the United States was also growing and the injured workers gained the right to sue the employer.

The judicial systems became backlogged with all of the cases, preventing judges from dealing with other suits and making the entire system inefficient. In the midst of this chaos, the injured workers began to prevail in the rulings and employers lost machinery, buildings, and other property. By 1908, the workers were winning in nearly 15% of all cases and common law developed the concept that industry is responsible for the costs of injuries inherent in industrial occupations.

Theodore Roosevelt

At the urging of President Theodore Roosevelt, the first “workmen’s” compensation law was passed by Congress to cover certain employees of the Federal Government. Amidst the lawsuits, employers began lobbying with state legislatures to pass similar laws, and in 1911, ten states enacted the controversial law. It was clear that the growing success of litigation was felt by the business community.

The business owners requested that the workers’ compensation laws included what is known as the “great trade-off”. The employer would agree to provide medical benefits and some wage replacement benefits to the injured workers if they would waive their right to sue the employer. Many states passed the laws in order to attract businesses, especially those in the manufacturing industry. By 1949, all the states had at least some form of workers’ compensation insurance in effect.

Today, workers’ compensation has become the exclusive remedy for the injured worker, regardless of fault in the injury. It protects employers from damage suits filed by injured workers and also provides employers with a basis for calculating production costs. It is still administered on a state-by-state basis and landscaping business must abide by the requirements within the states that they operate. As you pay your next premium bill for workers’ compensation insurance, I urge you to keep in mind how this form of insurance developed and the concept of the “great trade-off”.

New Landscaping Opportunities

The landscaping industry, like every industry, will continue to evolve over time with new technologies and new opportunities. I have read a few articles about a new niche of landscaping that should continue to expand in the years to come. There is a growing awareness among consumers to ‘Be Green’ and protect the environment, and this has expanded into combining landscapes with buildings. There are more and more residential and commercial buildings either being constructed or renovated with green roofs. Here a few articles about these roofs:

• Moma Roof Projects
• US Postal Service’s 2.5 Acre Green Roof Park
• In Search of a Good, Cheap Green Roof

There are even other buildings that have exterior walls constructed to allow growing plants. Here is an example with 12,000 plants on the side of an eight story building.

Other houses are being constructed with a complete self-sustaining system around it full of plants such as ferns. Here is a link to an article that describes an unusual house in Paris.

On top of these examples, there are other buildings that are almost entirely botanical. These are not your typical tree houses either. Architects are grafting young willow trees together to create the building described in this article.

As these unusual niches grow, there will be a need for landscaping business to not only install, but also maintain the plants that are apart of them. This opportunity will continue to be small for a number of years, but it is a good example of how the landscaping industry will continue to change and adapt to the marketplace.

Landscaper Impacted by Slow Economy

I found this article from August on The Boston Globe’s website. It discusses the lagging economy’s impact on landscaping businesses. It says:

At a time of the year when they should be worried about keeping grass green, lawn care companies are struggling to keep out of the red. For many, a wet spring and summer, along with the lagging economy, have caused a drop-off in business.

There are two main reasons for the slump: More people are cutting back on lawn care because they are concerned about the economy and job security, and the slowdown in home construction has depressed the demand for landscapers.

Bob Dolibois, executive vice president of the American Nursery and Landscape Association, based in Washington, estimated the $150 billion lawn care industry is off by 5 to 12 percent nationwide this summer, “depending on where you are.’’

The article continues to describe a few local landscapers that have filed for bankruptcy. This problem is impacting lawn maintenance and other landscaping businesses throughout the country. I have seen this personally with many of our clients here in Florida.

The downturn extends far beyond the people who cut grass. With home construction slowed, there is less need for companies that install irrigation systems, design lawns, and supply machinery.

“We’ve been taking on a lot of smaller-size projects that maybe we would not have considered in the past,’’ said David Berarducci, owner of David Berarducci Landscape Architecture in Boston. The company specializes in designing landscapes for universities and municipalities.

Berarducci said his profits are off by about 50 percent this year - $150,000 less in the first seven months of the year, compared with 2008. That’s forced him to go to a four-day work week and lay off one of his two full-time employees.

“I’ve cut back on pretty much everything,’’ he said. “Nobody knows if things are going to get worse or not.’’

Dave Figueiredo, general manager of Irrigator Services Inc. of Boston, said his business has been off by about 50 percent because of the recession.

“I’ve been in the business roughly 30 years, and it’s probably one of the slowest seasons I’ve ever seen,’’ he said.

I wish all of our clients and other landscaping businesses across the country the best of luck during these tough economic times. I don’t know when there will be a light at the end of the tunnel, but I am encouraged by some landscapers that have found a way to generate growth and offer increased services during these times. If you are considering cutting some of your business expenses and want to discuss options to reduce your insurance premiums, please do not hesitate to contact our office for comparative insurance quotes.