NOTE: This article about commercial auto insurance (pdf) 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.

In a previous article, I recommended insurance to landscapers with one owner and no employees. In this article, I will discuss how the insurance needs change when the landscaping business grows and adds two employees. The primary difference in recommended insurance coverage is that the landscaper should add workers’ compensation coverage to protect the company from the liability of injury to these employees.

For a local landscaping business with one owner and two employees, we recommend that the business carries four insurance coverages: general liability, commercial auto, equipment floater, and workers’ compensation.

1. General Liability: This policy provides protection to your business from many types of lawsuits. We recommend that you obtain limits of $1,000,000 for each occurrence and $2,000,000 for the policy period. For lawn maintenance companies, your premium for this coverage will be around 650 dollars for the year and if you install landscapes, your premium will be slightly higher at around 850 dollars. Depending on your business model and other variables, we have several insurance carriers that might be able to offer lower premiums.

2. Commercial Auto: This policy provides protection for your vehicles and the liability arising out of their use. It is important to move the vehicles you use for your business to a commercial auto policy instead of a personal auto policy. We recommend a limit on this coverage to be $1,000,000 combined single limit, and for small landscapers wishing to save money, we recommend that you should not go below $500,000 combined single limit. For a landscaper with two drivers, one truck worth around 10,000 dollars, and one trailer worth around 5,000 dollars, the premium will vary depending on your radius of operations and driving record. If your drivers have a good driving record, you are looking at a premium in the ballpark of 1,500 dollars to 3,000 dollars depending on all those variables. We have many insurance carriers we use for these policies, but have been very pleased with Travelers’ and Progressive’s commercial auto rates and service for landscapers with fewer than 5 vehicles.

3. Equipment Floater: This policy provides protection for your equipment against a variety of exposures with the highest threat being theft. Lawn mowing equipment and landscape installation equipment can be very expensive for a new business and you want to make sure this equipment is protected. For a landscaper with 15,000 to 30,000 worth of equipment, you can expect a premium on this coverage in the range of 200 dollars to 600 dollars. We often package this coverage in wit the general liability insurance policy, but we can also write it by itself through a few insurance carriers.

4. Workers’ Compensation: This policy provides protection for your business when your employees are injured during the course of employment. It will pay the state regulated hospital expenses and a portion of the payroll from missing time off work. Most states do not require your business to carry workers’ compensation insurance until you have over 3 employees, but we recommend that you carry it regardless. Even if you have one part time employee, our agents recommend that you purchase this coverage to protect your business in the event that an employee gets injured. In Florida, for two employees with an annual remuneration of 30,000 dollars, you are looking at a total premium of 1,470 dollars for your workers compensation coverage if your business operations are landscape maintenance and 2,250 dollars of premium if your operations are landscape installation.

With these four insurance coverages, your small landscaping business will have the protection it needs to avoid the losses that would otherwise end your landscaping career. These policies will allow your business to be protected from most loss exposures, so you can focus on expanding your clientele. For more information or to receive comparative insurance quotes, please contact us or complete the online quote request form. We enjoy working with landscapers of all sizes and look forward to being your insurance advisor as your business grows over time.

Businesses of all types purchase general liability insurance for covering the premises and operations liability loss exposures and products and completed operations liability loss exposures faced by their business. Because general liability insurance covers a wide range of liability loss exposures faced by most organizations, it is the foundation for most organizations’ liability insurance programs. This is very true for landscaping businesses as well.

Most general liability insurance policies are based off of a standard occurrence coverage form designed by the Insurance Service Office, but many insurance carriers make changes to the policy wording, so it is very important to read your actual policy for coverage terms and conditions. These policies have three coverage sections:

Coverage A – Bodily Injury and Property Damage Liability

Coverage B – Personal and Advertising Injury Liability

Coverage C – Medical Payments

Most claims fall under the Coverage A section of the general liability policy and I will go into more depth at a later time about the practical ways that this coverage applies to landscapers.

In addition to general liability insurance, other insurance policies can be used to cover liability loss exposures. An umbrella liability policy or excess liability policy will increase the limits over a general liability policy and can increase the limits of other coverages as well. Umbrella and excess liability policies are slightly different in the type of coverage they offer. Commercial auto insurance has a liability section to cover the liability loss exposures associated with driving a vehicle. Even workers’ compensation insurance is a type of liability policy to cover the statute liability imposed by the government for employees that are injured on the job.

If you have any questions about the liability loss exposures of your landscaping business, or if you would like to speak with an agent about designing a comprehensive insurance program, please do not hesitate to contact BearWise Landscapers.

Regardless of what else they might know about the United States legal system, most adults and even many children know, from either their own experience or the mass media, that “anyone can be sued.” In the context of commercial risk management for landscaping businesses, this generalization can be restated as “every organization has liability loss exposures.” A loss exposure is any condition or situation that presents a possibility of loss, whether or not an actual loss occurs. In terms of liability, a liability loss is any loss that a person or business sustains as a result of a claim or suit against that person or business by someone seeking damages or some other remedy permitted by the law.

For example, any landscaping business with an office could be sued for injuries resulting from a dangerous condition on the office property. Holding the office open to the public for business therefore creates a liability loss exposure because having persons on the property presents the possibility that such a suit could occur.

Other examples of loss exposures for landscapers include bodily injury or property damage caused by lawn mowing operations, vehicle accidents, breach of contract, general negligence, intentional torts, strict liability torts, contributory negligence, libel and slander, interference with property rights, trade disparagement, unfair competition, fraud, nuisance, vicarious liability, liability based on statutes, and many other cases.

Liability losses can range from small nuisance claims to multimillion-dollar judgments. Improperly handled or covered by insurance, liability loss exposures can result in losses that prevent a business from reaching its goals and can even bankrupt the business. For landscaping businesses, the best way to manage liability loss exposures is through effective risk control and risk financing. Risk control techniques are intended to prevent liability losses from occurring or to reduce the amount of liability losses that do occur. Risk financing techniques provide ways of paying for losses that actually occur and the most cost effective way of doing this as a landscaper is through purchasing appropriate insurance to cover your exposures.

Non-owned vehicle coverage also known as employers nonownership liability is an additional coverage offered on a commercial auto policy. Sometimes employees may use their personal autos to run errands for the business. This opens up a liability exposure for the business that can be protected by adding non-owned vehicle coverage to your commercial auto policy. Therefore if an employee is involved in an accident, driving his car and running an errand for you, your company could be held liable for the accident. I strongly recommend adding this rather inexpensive coverage to your policy.

If you would like to receive an auto quote please click here

Hired and borrowed auto coverage can be added to your commercial auto policy. This additional coverage provides protection for autos hired/rented/leased/borrowed by an organization and used in the business’ operations. With this coverage any liability for injury or damage to others that is a result of a hired or borrowed vehicle may be covered. If you have not added hired and borrowed auto coverage to your policy you want to make sure you purchase auto insurance from the rental place to cover the vehicle you are hiring.

If you need to get a commercial auto quote for your business please click here.

If you are already a current client without the addition hired and borrowed auto coverage please contact us if you would like add this coverage to your policy. The additional premium is very affordable for the coverage.

Recently, I posted an article discussing the Business Auto Coverage Form and some of its specific details. The article mentioned how the Business Auto Coverage Form allowed for different autos to have different coverages. These differences are noted on the policy by different auto symbols.

There are ten different auto symbols:

• Symbol 1 - Any “Auto” is covered.
• Symbol 2 - Owned “Autos” Only covers all autos you own and also liability for non-owned trailers attached to owned power units.
• Symbol 3 - Owned Private Passenger “Autos” Only covers only the private passenger autos you own or acquire ownership after the policy begins.
• Symbol 4 - Owned “Autos” Other Than Private Passenger “Autos” Only covers all the owned “autos” that are not of the private passenger type and the liability coverage for any non-owned trailers attached to owned “autos”.
• Symbol 5 - Owned “Autos” Subject to No-Fault covers only the “autos” you own that are required to have No-Fault benefits in the state where they are licensed or principally garaged.
• Symbol 6 - Owned “Autos” Subject to a Compulsory Uninsured Motorists Law covers only those “autos” you own that because of state law require you to have and cannot reject Uninsured Motorists Coverage.
• Symbol 7 - Specifically Described “Autos” covers only those “autos” mentioned in Item Three of the Declarations page on your policy.
• Symbol 8 - Hired “Autos” Only is coverage for only those “autos” you lease, hire, rent, or borrow from any of your employees, partners, or members of their households.
• Symbol 9 - Non-Owned “Autos” Only covers only those “autos” you do not own, lease, hire, rent, or borrow that are used in connection with your business. This includes “autos” owned by your employees, partners, members, or members of their households but only while used in your business or your personal affairs.
• Symbol 19- Mobile Equipment Subject to Compulsory or Financial Responsibility or Other Motor Vehicle Insurance Law Only covers only those “autos” that are land vehicles and that would qualify under the definition of “mobile equipment” under this policy if they were not subject to a compulsory or financial responsibility law or other motor vehicle insurance law where they are licensed or principally garaged.

I was reading an article the other day in the Planet News, the Professional Landcare Network publication. The article was highlighting a landscape and lawn care owner who installed real time GPS units his four work trucks. With the ability to watch where each of his trucks were and how long they have been there; he was really able to cut down on idle time at the job sites. He mentioned that idle times had decreased about 30 to 40 minutes a day per crew.

Another great feature to these units is whenever someone is driving over the speed limit a message is instantly sent to the owners cell phone. This will help ensure that your drivers are being safe drivers, which will minimize the risk of auto claims. Less claims generally means lower premiums over time. Larger companies can see some significant savings by minimizing their claims.

There are several different products out there, so you may want to research which would fit best with your company. However, this could be a very valuable tool for improving efficiencies, minimizing claims, and increasing your bottom line.

The Business Auto Coverage Form covers liability arising out of the ownership, maintenance, or use of autos and physical damage to autos owned, leased, or hired by the named insured. As a result of all of these different exposures the Business Auto Coverage Form offers great flexibility in designating covered autos for various different coverages.

A specific coverage chosen by the insured for one auto does not have to be the same coverage for another auto. The insured may want to have liability coverage for all autos, but only have physical damage coverage for specifically mentioned autos.

Coverage symbols are numeric symbols used in auto policies to indicate which autos are covered for what particular coverages. There are ten different coverage symbols under the Business Auto Coverage Form.

To receive a free online commercial auto quote please click here and one of our BearWise Landscapers agents will contact you shortly.

Uninsured motorists coverage provides a source of recovery for occupants in a covered auto who are injured in an accident caused by an at-fault driver with no auto insurance or insufficient auto limits.

I can not stress the importance of adding uninsured motorists coverage to your commercial auto policy. This coverage is optional, but I strongly recommend it. You would be surprised by the amount drivers in Florida who do not have auto insurance at all, not to mention the amount of drivers that have minimal amounts of liability. With today’s hospital bills and legal fees on the rise it does not take much to exhaust the limits of one’s auto policy. Having this coverage will provide more protection for you on the road. I also recommend that you purchase the same amount of uninsured motorists coverage as your liability limits. You are not able to purchase more than your current auto liability limits. This is also something to consider when you are setting the limits for your auto liability.

To sum up: you are not adequately covered unless you purchase uninsured motorists coverage with your auto policy.