December 29th, 2009
by Drew Roberts, CPCU, ARM | No Comments »
Turf - December 2009
NOTE: This article about commercial auto insurance
) was published in the December issue of Turf Magazine.
Commercial Auto Insurance
Two supplementary coverages that minimize your risk
When it comes to commercial auto policies, many owners of landscape businesses understand the primary policy parts of liability coverage, comprehensive coverage and collision coverage. These insurance coverages account for over 80 percent of the premium on most commercial auto policies, but there are also two supplementary coverages that are important to look into to minimize your risk: hired and nonowned auto coverage, and uninsured and underinsured motorists coverage. They are commonly removed when businesses attempt to cut insurance costs, but can be important and can also be included on a business auto policy for a small amount of premium.
Hired and nonowned auto coverage
This coverage is an aspect of the liability portion of the policy, but I have found that many landscapers neglect to include it on their policies. Most insurance carriers issue auto policies with a covered auto symbol of “7” to only cover those vehicles that are specifically listed in the policy documents. If that is the only covered auto symbol shown for the liability portion of the policy, then the business will not be covered for the liability it assumes when employees use their own vehicles for business purposes and when the business rents vehicles. Under these instances, any accidents that result in property damage or bodily injury to a third party will not be covered under the landscaper’s commercial auto policy. Those claims will therefore be paid out of pocket by the landscaping business. If your employees use their own vehicles to run any business errands or if your business rents vehicles, then it is important to have this coverage on your commercial auto policy.
Uninsured and underinsured motorists coverage
This coverage protects your own business for the liability of other drivers that do not carry insurance or do not carry enough insurance to cover the damages they cause. According to the Florida Department of Motor Vehicles, an estimated 6 percent of Florida drivers are uninsured. This number does not account for those driving with unregistered vehicles or without a current driver license. The total statistic is tough to accurately predict, and some government agencies have predicted it to be closer to 15 percent. Even if the national average is between 5 to 10 percent, that would still create a significant likelihood of having an accident with an uninsured motorist. In addition, many states only require $10,000 of auto liability coverage. This limit is not high enough to pay the damages on a newer truck or a trailer loaded with landscaping equipment, and it certainly will not be high enough to cover bodily injuries to your employees or other passengers in the accident. A lawsuit would be able to recover the damages if the individual has a high net worth, but the truth is that these individuals do not carry insurance or carry low limits of insurance because they do not have assets to protect. With a 5 to 15 percent chance of each accident with one of your vehicles being caused by an uninsured motorist, and a much higher percentage chance that the accident will be caused by a motorist with low limits of insurance, this coverage has proven to be valuable. This coverage also has a comparatively low premium cost to the general auto liability premium and is a good value from an actuarial point of view.
As the owner of a landscaping business, you certainly have many things on your mind. Take time to learn about the coverages on your insurance policies and understand which ones can be beneficial to your business and which ones are not necessary for your operations. Both of these supplementary coverages available on commercial auto policies can be beneficial to your business and can also be added for a small amount of premium. As an insurance agent, I recommend that you review your current policy to see if these coverages are included, and then discuss the premium value of each one with your agent.
December 17th, 2009
by Drew Roberts, CPCU, ARM | 1 Comment »
Lawn Care Employees
Today, we issued a press release with the 2010 Florida Workers Compensation Rates
. We are also sending out the following letter to Florida landscapers:
I would like to wish you a Happy New Year! As we prepare for 2010, I wanted to share some good news about the new Florida workers’ compensation rates. An average rate reduction of 6.8% from the 2009 workers comp rates will be effective on January 1st. This is the seventh annual drop in rates since 2003, when reforms were passed. Since that time, the average rate decrease is 63%.
This news is even better for businesses in the landscaping industry:
Lawn Maintenance Employees (Class Code 9102) - The new rate is 3.49 dollars for every 100 dollars of remuneration. This is a 16.9% reduction from the 2009 rate of 4.20 dollars. This classification has a 71% decrease since the 2003 rate.
Landscape Installation Employees (Class Code 0042) – The new rate is 6.36 dollars. This amounts to a 10.5% reduction, which is also larger than the state average.
Irrigation Employees (Class Code 5183) – New rate is 4.75 dollars for a 7.5% reduction.
Tree Trimming Employees (Class Code 0106) – The new rate is 13.31 dollars, which is actually 2.7% higher than the 2009 rate of 12.95 dollars. Even with this change, this classification has still received a 67% reduction since the 2003 rate.
These new rates will be applied to your policy at renewal. If you have any questions about workers’ compensation insurance, or if you would like to receive comparative quotes, then please do not hesitate to contact us. At BearWise Landscapers, we focus on the unique insurance needs of the landscaping industry and look forward to continually providing practical information and other valuable insurance services to your business.
December 14th, 2009
by Drew Roberts, CPCU, ARM | No Comments »
PRO Magazine - December 2009
NOTE: This article about Equipment Floater Insurance was published in the December issue of PRO Magazine.
Protection Against Stolen or Damaged Equipment
Equipment floater insurance is the best option when it comes to insuring your landscape equipment.
Because you and your landscape equipment are on the move each and every day, ordinary property insurance is not enough to cover the risk of having your equipment stolen or damaged.
Equipment Floater Insurance:
- • Covers your equipment from a number of perils at any location in the United States
- • Is typically quite affordable
- • Can often be packaged into the same policy with your general liability and other business insurance coverages.
Many insurance carriers offer different coverage terms and conditions, because equipment floater insurance is not written on a standard insurance contract used by all carriers, as is the case with general liability insurance. That’s why it’s important to ask a lot of questions before purchasing this type of insurance.
- Is Theft Covered? – Equipment theft represents your biggest exposure to loss, and has become an even bigger problem during this recession. However, some policies exclude this cause of loss from the coverage while others put restrictions on it. Ask your insurance agent if theft is covered on the policy and what limitations there are.
- Replacement Cost Value or Actual Cost Value? – If your business has a claim, there is a difference in the amount you will recover if the policy was based on replacement cost value or actual cost value.
- Replacement cost value has a slightly more expensive premium. However, it will pay the cost to purchase a replacement piece of equipment with one of like age and usability to get you back to work.
- Actual cost value will only allow the claims adjuster to pay the current value of your equipment. Replacing a two-year-old commercial mower is usually more expensive than the actual worth of that mower.
- Deductibles – A typical deductible for equipment floater insurance is $500 for each occurrence. Check the deductible on your policy to see what it is, and if it applies per occurrence or per item.
- Limit on Value of Unscheduled Equipment – Some policies will pay a maximum of $1,000 for every piece of equipment that is not scheduled on the policy while others will pay a maximum of $2,500. Make sure that your mowers and other pieces of equipment exceeding this limit are individually scheduled on the policy.
- Rented or Leased Equipment – If your business rents or leases equipment, you may need to purchase an endorsement to cover that equipment on your policy. There may also be additional limits that apply to these pieces of equipment. You should thoroughly communicate this issue to your agent and double check your quotes to make sure this is properly covered.
- New Equipment Purchases – During the course of a typical one-year policy period, you will more than likely make many equipment purchases. Ask your insurance agent if your policy allows a 90-day grace period from the time of purchase for these items to be added to the policy. Without that addition to the coverage, you will need to endorse your policy immediately after each equipment purchase for those items to be insured.
These tend to be the main issues faced by landscaping businesses when comparing quotes on Equipment Floater Insurance and making a purchasing decision on this coverage. As mentioned earlier, since there is not a standard coverage, you have to pay closer attention to what is offered by the policy you are considering. You should also know that the rate for individually scheduling pieces of equipment on the policy by their year, make, model, value, and identification number will keep your premium substantially lower than by not scheduling those items. Typically the rate for scheduled equipment is a fourth of the rate for unscheduled equipment values and you avoid the coverage limitations on those pieces of equipment as noted above. Overall, these policies are affordable and are a valuable risk financing tool that I recommend landscapers of all sizes consider for their business. Just keep in mind that when considering these policies, you should pay attention to the unique specifics of the coverage that is offered.
December 9th, 2009
by Drew Roberts, CPCU, ARM | 1 Comment »
As mentioned in this previous article, BearWise Landscapers is gaining recognition for providing specialized insurance information and services to the landscaping industry. At BearWise Landscapers, our goal is to add more value to your landscaping business than other insurance agencies that do not offer our specialized expertise. We do this through our niche approach in your industry by providing practical insurance information, advice, and a knowledge of the insurance carriers that underwrite your exposures to risk. This approach directly benefits your business and we feel that it is the best way to effectively serve your insurance needs.
BearWise Landscapers was featured in an article by IA Magazine, the premier magazine for independent insurance agencies. IA Magazine is the official publication of the Insurance Agents and Brokers Association (IIABA). Here is a link to the full text of the December 2009 cover article about insurance specialists and here are some quotes that mention the advantage of using an insurance agency that specializes in serving businesses within your industry:
Independent agencies are wearing more hats these days, offering value-added and consultative services in addition to the more customary insurance roles. More producers are becoming specialists, learning a particular market niche and then putting their energy into developing a specific line of business.
Why is such specialization better than a more generalist approach? “Buyers tend to like agencies that have a very detailed understanding of their risk needs,” Buckner replies. “When you can go to a trucking company and say that you insure 10 of his competitors across town—that we know this stuff real well and how to make things happen—they’re much more open to doing business.”
Brendan Lynch agrees. “It’s just a powerful marketing tool to go into a prospective client and really claim truthfully that you are an expert in a particular area,” says Lynch, CFO of Plastridge Insurance Agency in Delray Beach, Fla. The agency has built a practice group serving the hospitality industry, which includes restaurants, nightclubs, hotels and taverns. “When a producer can say, ‘This is all I do and my team does,’ prospects listen,” Lynch adds.
Smaller agencies like Black Bear Insurance in Longwood, Fla., also are taking the specialty route. Although the agency traditionally has been a generalist, Main Street-type provider of p-c insurance, it recently developed a niche serving the landscaping industry. “There are thousands of landscapers in Florida,” comments Drew Roberts, Black Bear account executive.
Black Bear pursued an industrious approach to securing this business — the agency mailed postcards to all the landscaping operations it could find in the state, and then encouraged the businesses to log onto a Web site it had developed, www.BearWiseLandscapers.com, devoted exclusively to their risk management needs.”
December 4th, 2009
by Drew Roberts, CPCU, ARM | No Comments »
Over the past couple of days, I attended the first annual Lawn Care Summit. It was held here in Orlando at the Omni Resort at ChampionsGate. That is a link to the brochure that outlines all of the classes at the conference.
I felt that the majority of the sessions were targeted towards the topics of pest management and not the lawn care side of the business. However, I did enjoy meeting more people in the landscaping industry. There were attendees from all over the United States and it was interesting for me to hear about the challenges that landscaping businesses faced in different parts of the country.
Today at lunch, I ate at same table with Bill Hildebolt, the current president of the Professional Landcare Network (PLANET). He runs Nature’s Select Premium Turf Services in Winston Salem, North Carolina. I was impressed with his understanding of the industry and some of the advice he had for the other guys sitting with us.
Bill spent a lot of time discussing some of the lessons he had learned in the business and some of his overall experiences. He is also a big advocate of education. Here is a quote from a letter he wrote to the members of PLANET:
One could argue that our industry’s roots run deep in the apprenticeship mold. Just think how many PLANET members started out by working for another company to learn how to install, maintain, and care for landscapes before starting their own companies. No matter what their educational background, most landscape contractors and lawn care operators will admit that this experience was absolutely vital to their subsequent success.
The flip side, of course, is that our version of an apprenticeship program doesn’t have the means to keep less-than-qualified (unprofessional) owners and operators from participating in our industry. Indeed, a business person in the Middle Ages had little if any competition compared to what our industry is facing. In addition to the proverbial low-baller, we’re also in the midst of an industrywide recalibration where customers are no longer willing to pay yesterday’s price for our services. It’s an ongoing challenge, today, to draw a straight line between the value of the service we provide and the price. With so many service providers to choose from, informed customers (and they’re the ones we all want to nurture) should be looking for the professional, the company that can stand behind its work with experienced, trained employees.