Archive for the ‘(1) Insurance’ Category

2012 Landscaping Workers Comp Rates

December 28th, 2011
by Drew Roberts, CPCU, ARM | No Comments »

Effective January 1, 2012, Florida workers’ compensation policies will use new rates for businesses in the landscaping industry. For the second consecutive year, the new rates are higher for landscapers, tree trimmers, and lawn care companies. If your business is experiencing higher insurance premiums, contact the insurance professionals at BearWise Landscapers for comparative quotes and cost saving measures.

Businesses in the landscaping industry primarily use the following classification codes to compute the workers comp premium associated with the payroll of their employees. The new rates are listed with each classification code.

9102 Class Code (Rate: 4.11) - This classification code is assigned to employees that maintain lawns and gardens. This is your standard landscape maintenance and lawn care classification and it is used by most businesses in the landscaping industry to rate their workers’ compensation premiums. It is officially titled ‘Parks NOC’ and the 2011 rate for it was 3.47 percent. This new rate results in an 18% premium increase over that 2011 rate.

0042 Class Code (Rate: 7.48) - This classification is applied to employees that are involved in the installation of landscapes. These landscaping operations involve laying sod, planting trees, shrubs, and flowers, and general gardening activities. This classification cannot be used in Florida with employees classified as 9102 unless the operations are conducted by separate work crews. The rate in 2011 was 7.14 and this link provides information on using class codes 0042 and 9102 on the same policy.

0106 Class Code (Rate: 16.11) - This classification code is used for tree trimmers and specifically it is used for those employees or businesses whose operations involve leaving the ground to trim trees. When ladders, bucket trucks, and any other equipment assists employees to get their feet off the ground to prune or trim trees, then this classification is applied instead of the previous landscaping class codes. It also includes the chipping and cleanup activities associated with tree trimming. The 2011 rate was 14.62 percent.

5183 Class Code (Rate: 5.31) - This classification code is applied to employees of landscaping businesses that engage in the installation or repair of underground lawn sprinkler systems. The rate in 2011 was 4.82 percent.

0005 Class Code (Rate: 4.99) - This classification is applied to employees that operate a landscape nursery, and the 2011 rate was 4.60 percent.

8810 Class Code (Rate: 0.27) - 8810 is applied to the clerical office employees of landscaping businesses that do not engage in landscape services. The 2011 rate for this class code was 0.25 percent.

8742 Class Code (Rate: 0.53) - This classification is used for salespeople employed by landscape companies. These employees also may not engage in landscape services to be rated in this lower classification. The 2011 rate was 0.49 percent.

The workers’ compensation rates will be applied to all new and renewal policies that are issued January 1st, 2012 and later. The previous rates will be used on current policies until a renewal policy is issued. The National Council on Compensation Insurance (NCCI) is the ratemaking organization that files workers’ compensation rates for all carriers in Florida.

For more information regarding workers’ compensation insurance or the other unique insurance needs of businesses in the landscaping industry, please contact BearWise Landscapers. There are many other factors that impact the final workers’ compensation premium of a business, such as claims history (experience modification factor), dividend plans, deductibles, limits of insurance, and others. If your landscaping business is interested in receiving comparative insurance quotes on your workers comp renewal or other insurance products, please call Drew Roberts, CPCU, ARM at 866-296-2327 or complete our short online quote request form.

Protecting Your Landscape Equipment

March 16th, 2010
by Drew Roberts, CPCU, ARM | No Comments »

Turf Magazine - March 2010

Turf Magazine - March 2010

NOTE: This article about equipment floater insurance was published in the March issue of Turf Magazine.

Protecting Your Landscape Equipment
An introduction to equipment floater insurance

Lawn care and landscape businesses have unique insurance needs that are not encountered by other types of businesses. In the landscaping industry, tractors and other pieces of equipment are some of your largest assets. This equipment travels to the properties of multiple clients each day and, therefore, has a higher risk of not only theft, but other causes of loss and damage.

These facts are common knowledge to many landscapers, but a large percentage do not realize the insurance implications. 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 specifically designed to cover your landscape equipment and tools while located anywhere in the broad coverage territory. It is a type of inland marine insurance, and that general term may be used on your policy documents. 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.

In order to allow the flexibility to meet the individual coverage needs of insured businesses, there is not a specific contract wording used by every insurance carrier in their policy documents. This is different than insurance like standardized general liability, which will have the same policy documents and unendorsed contract terms regardless of the insurance carrier. When purchasing equipment floater insurance, it is important to ask questions and understand the insurance coverages that are offered.

The good news for landscapers is that the price of equipment floater insurance is a good value, with annual premium rates ranging from 1 to 4 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 coverage. Other premium discounts may be available for safe storage techniques, theft deterrent systems, claims history and equipment maintenance procedures.

Equipment floater insurance typically has a substantially lower premium rate for scheduled equipment than the blanket coverage that applies to all other equipment. Most policies contain a schedule listing of each piece of equipment with the identification number, year, make, model and value. This is commonly used for landscaping equipment with an individual value of more than $1,000. Scheduled equipment will usually have lower deductibles and other coverage advantages in addition to the lower rate.

As the owner of a landscaping business, you certainly have many things on your mind. Take time to verify that your landscape equipment is adequately covered with equipment floater insurance, since it cannot be properly covered under other insurance. Research the coverage options to see if they fit your business needs and check the accuracy of the equipment schedule. On the declarations page of the policy, the premium will be computed with the associated rates and premium discounts. If no discounts are applied, or if other corrections need to be made, then I recommend you discuss available options with your insurance agent.

Standard Discounts in Workers Comp

February 25th, 2010
by Drew Roberts, CPCU, ARM | No Comments »

Understanding Discounts

Understanding Discounts

Many lawn care and landscaping businesses have asked us about a standard premium discount that our insurance carriers apply to their workers’ compensation policies. In the premium summary section of the policy documents, this discount will show up for insureds that pay over 5,000 dollars a year for workers comp insurance. It will be marked as a percentage and that percentage will change as your payroll changes. This is a standard discount in Florida and is used regardless of the insurance carrier on guaranteed cost policies (not retrospective rating policies). It can be used with dividends and other discounts. Here is how this standard discount is computed:

The standard discount is tiered. There is not a discount on the first 5,000 dollars of premium and the discount is applied to only the premium above that amount. Below is a chart with the current discount percentages applied to each level of premium.

Standard Premium Discount
Discount by Insurance Carrier Type
Premium From: Stock Co. Non-Stock Co.
First $5,000 0% 0%
$5,000 - $100,0000 10.9% 3.5%
$100,0000 - $500,000 12.6% 5.0%
Over $500,0000 14.4% 7.0%

The principle behind applying a premium discount to larger workers’ compensation policies is that expenses of handling compensation on a risk are proportionately less, as a percentage of premium, as the risk becomes larger. Typically, agency commissions are also reduced on larger policies. These discounts only apply in the state of Florida and although other states may use a similar formula, please check with the workers’ compensation insurance division of your home state.

If you have any questions regarding premium discounts for your lawn care, landscaping, or tree trimming business, please do not hesitate to contact me or one of the other insruance agents at BearWise Landscapers. If you would like a comparative quote on your workers’ compensation policy, you may request it by calling our office or completing our online quote request form.

Reducing Workers Comp Costs

February 19th, 2010
by Drew Roberts, CPCU, ARM | No Comments »

PRO Magazine - February 2010

PRO Magazine - February 2010

NOTE: This article about reducing the costs of workers’ compensation insurance was published in the February issue of PRO Magazine.

Lower Your Workers’ Comp Costs
Tips for Landscapers to Reduce Workers’ Compensation Premiums

For landscapers all over the United States, the premium of workers’ compensation insurance is a large expense that’s often required by state laws. In other words, there’s not much you can do about it. Or is there?

Understand Your State’s Laws

Not every state requires businesses to provide workers’ comp. In fact, most states only require businesses to provide it when they have more than three employees.

Even when not required by law, offering workers’ comp is still beneficial for landscapers to avoid prosecution from injured employees who waive their rights to file damage lawsuits against the employer when receiving workers’ comp benefits.

The premium for workers’ compensation insurance is designed to provide sufficient funds to not only pay for benefits to the injured employees, but also to operate the system that delivers those benefits. It is a pre-funded insurance system, which means that premiums are determined before the policies are issued, and that premiums are intended to meet all future claim payments made under those policies.

Nearly 40 states have designated a non-profit statistical organization called the National Council on Compensation Insurance (NCCI) to advise their insurance regulators on the appropriate premium rates. Insurance carriers within those states are required to use the state-mandated rates, along with the roughly 600 different classifications for employees.

For landscapers dealing with workers’ compensation insurance in one of these 40 states, not to mention many of the remaining states, I recommend the following five steps to avoid overpayment.

Use Correct Employee Classifications

Each of the 600 classification codes for employees has a specific rate. Ask your insurance agent for copies of the official descriptions for those used in your policy—and verify that they are correctly assigned.

Many states allow a business to use multiple classification codes; your employees who fulfill clerical duties will have a substantially lower rate than those out on jobsites. For landscapers, most states use code 0042 for landscape installation duties and the code 9102 for lawn maintenance duties. It is common for lawn maintenance employees to pay a double rate when misclassified in the installation code.

Use Correct Payroll Numbers

The rates on workers’ compensation policies are multiplied by the premium basis, which is commonly referred to as payroll, but the correct term is actually “remuneration”. There is an important difference between these terms because remuneration excludes some pay received by employees; this needs to be removed from the premium basis on your policy.

Severance pay is not included along with overtime wages above the regular amount of pay.

Corporate officers can be excluded from coverage, and their payroll should also be completely removed. If not excluded, partners and sole proprietors often have a fixed amount of payroll and other executive officers will have a maximum amount. Find out the specifics in your state laws.

Be Proactive with Claims

The best long-term approach to saving on workers’ compensation premiums is to minimize the number of employee injuries, along with the costs associated with each injury.

Most states utilize an experience rating technique that allows premiums to be adjusted higher or lower based on claims history. To take advantage of these systems and lower future premiums, it is important to partner with an insurance carrier that efficiently handles claims and controls claim costs.

Report claims immediately to your carrier to minimize the employee’s time off work. Offer light-duty jobs to injured employees to minimize their loss of wages. Use techniques to prevent injuries—and make safety a priority for your business operations.

Obtain Available Premium Credits

In some states, there are discounts of 5% and greater for having a drug-free workplace. There are also standard discounts available for utilizing a written safety program.

In states without these standard discounts, many use “schedule rating”, which allows an underwriter to apply premium discounts for factors such as safety practices and management experience that are not otherwise reflected in the claims experience. Find out what credits are available in your state and seek to obtain the associated premium discounts.

Analyze Other Premium Discounts

To allow insurance carriers to compete on price when rates are pre-determined, many states allow specific forms of premium discounts based on claims.

Landscapers with larger premiums may be offered dividend plans, which allow funds as high as 50% of the premium to be returned at the expiration of their policies for no employee injuries or good claims results.

Retrospective rating plans allow businesses to receive discounts for lower claims, but claims within a policy period can adjust the premium amounts and result in higher premiums. It is important to ask questions and understand what premium discount options are available to your landscaping business.

Landscaping Insurance Questions

February 9th, 2010
by Drew Roberts, CPCU, ARM | No Comments »

Insurance Questions

Insurance Questions

Do you have a question about insurance for your landscape installation, lawn care, tree trimming, or other landscaping related business?

If so, we want to encourage you to ask our agents those questions through the contact form on our website. Take a few seconds to type out your questions and we will make it a point to answer those questions on this agent articles section of our website.

We want to be a resource for landscaping businesses throughout the United States even though we currently only provide insurance to those located in Florida. So feel free to ask us your questions regardless of where you are and we’ll do what we can to answer them.

Uses of Class Codes 0042 and 9102

February 4th, 2010
by Drew Roberts, CPCU, ARM | No Comments »

Employee Classifications

What class code for landscaping employees?

Workers’ compensation insurance in Florida and roughly 40 other states, use a classification code system designed by the National Council on Compensation Insurance (NCCI) to rate insurance premiums differently for groups of employees. There are roughly 600 class codes, and the two main codes used for employees in the landscaping industry are 0042 and 9102.

I often encounter landscape maintenance businesses that have their employees misclassified and are able to not only receive a 50% reduction on their current insurance premiums, but are also able to file for reimbursements from overpayments on previous workers compensation policies. In January, we provided workers compensation coverage under class code 9102 to three lawn care businesses that were classified under code 0042.

These experiences and multiple other questions about how these classification codes may be used together on a policy, have brought to my attention a need to communicate specific information to the landscaping industry about the uses of workers compensation codes 0042 and 9102.

First, let’s start with a brief description of each classification code with quotes from NCCI’s official descriptions:

Class Code 0042Applies to employees primarily engaged in planning, clearing, grading, laying of sod, seeding, and planting necessary for landscape installation operations. Planting of trees, shrubs, and flowers are classified to this code along with general gardening activities.

Class Code 9102Applies to employees that perform maintenance of lawns, grounds, and gardens. “The maintenance may involve lawn mowing, raking, application of liquid or granular fertilizer, spraying and trimming of shrubs or small trees from the ground, and thatching or aerating. If any one or all of the above operations are performed by a lawn maintenance risk classified to Code 9102, then minor and incidental landscaping operations performed by the same risk, such as the replacement of dead shrubs, the planting of a few flowers, and the placing of rock or brick as edging designs are included under Code 9102. This minor landscaping operation is distinguished from work performed by an insured at a job or location where the primary work at the job or location is landscaping. Since lawn spraying is a maintenance operation, a risk engaged exclusively in work of this nature is classified to Code 9102.”

In Florida, the 2010 rates for theses class codes are 6.36 for code 0042 and 3.49 for code 9102. In the other states, class code 0042 also has a significantly higher rating than class code 9102. For businesses in the landscaping industry, this emphasizes the importance of distinguishing between the two classification codes.

In many states, employees that engage in both landscape installation and landscape maintenance activities can have their corresponding payroll divided between the class codes if proper records are maintained. Consult with your insurance agent for the specific classification rules in your local state. According to the state exception wording under the 9102 class code, Florida landscaping businesses can use class code 0042 and 9102 on their workers’ compensation policy only if those “operations described by these classifications are conducted by separate crews.”

For more information regarding these classification codes and their appropriate uses to classify your landscaping employees, please contact our office. For insurance quotes on Florida landscaping businesses, please complete our easy online quote request form.

Safety Tips for Landscapers

January 26th, 2010
by Drew Roberts, CPCU, ARM | No Comments »

Safety TipsI came across these great safety tips on Zenith’s website for businesses in the landscaping industry:

For more information about workplace safety, please visit the Groundskeeping Safety section of their website.

Zenith Insurance Company

January 21st, 2010
by Drew Roberts, CPCU, ARM | No Comments »

When discussing workers’ compensation insurance with landscaping businesses, I often emphasis the importance of taking a long term approach to controlling premium costs by lowering the cost of claims. I typically recommend partnering with an insurance carrier that is committed to controlling the cost of claims and providing resources to your business that help you prevent workplace injuries. I believe Zenith Insurance Company (www.theZenith.com) is an industry leader in this approach.

Zenith Insurance

Zenith Insurance

Since 1977, Zenith Insurance Company has been a specialist in workers’ compensation insurance. They write coverage in 45 states and the District of Columbia. Zenith conducts business through independent agencies, like BearWise Landscapers. Zenith Insurance Company currently has an A.M. Best rating of A (Excellent). For the latest rating, access www.ambest.com.

They are experts at managing the claims process, getting injured workers back to work, and fighting fraud and abuse whether it relates to providers of medical goods and services or to individuals making false claims. Because of this extensive experience, Zenith leads the way in helping businesses with higher than average experience modifications. Their staff works together with your landscaping business to help reduce workplace injuries and improve their bottom line.
Here are a few of the valuable services provided to Zenith clients:

Workplace Safety & Health
Managing Claim Costs
Quality Medical Care
Returning Employees to Work
Fighting Fraud & Abuse
Providing Claims Legal Services
Premium Audit Services
Education & Training

Official ALMA Insurance Partner

January 5th, 2010
by Drew Roberts, CPCU, ARM | 2 Comments »

ALMA

ALMA

BearWise Landscapers is proud to be named the insurance partner of the American Landscape Maintenance Association (ALMA). The partnership will allow our agents the opportunity to provide practical information to the large number of ALMA members across the United States. We will do this through insurance articles similar to the ones on this portion of our website and through a number of videos. Check out ALMA’s website, www.ALMAnow.com, to see these videos and other informative pieces. ALMA provides a variety of practical information and services to businesses in the landscape maintenance industry.

The Member Resource Center on their website is the hallmark of the all new ALMA. Using innovative new technologies, ALMA is bringing their comprehensive selection of documents and information to landscape contractors on a global level. Through the use of video, audio, and document retrieval systems, the wealth of knowledge ALMA has to offer is at your fingertips 24/7.

Some of the features of the resource center include:

  • In-Depth Operational Topics
    The Resource Center is constantly updated with current issues and operational tactics in video format.
  • Document Libraries
    ALMA has been around since 1988, so we have manuals and documents that can easily be customized to fit you operation. Most documents are instantly downloadable and free to Premium Members right from the document center.
  • Industry Interviews
    ALMA brings some of the most dynamic and successful contractors (large and small) to the resource center to tell their stories and offer advice and inspiration.

While the information provided to landscape contractors through the Resource Center is worth its weight in gold, you will not find another association staff that cares more about its members.

ALMA has been in existence since 1988. Since that time they have helped thousands of landscape maintenance contractors of every size in every area of the country. ALMA’s President and Founder, Tommy Ganz, has indisputably the most dynamic background of anyone in the green industry today. Publisher of Commercial Mowing Magazine, Founder of ALMA, the largest landscape association in America, Host of the ALMA Expo, former General Partner of U.S. Lawns, Executive at Environmental Care, President of AgriCare International and heading up Ganz Landscape Services for almost 30 years. For the last 20 years of Tommy’s career, he’s been doing nothing but helping and training landscape maintenance contractors all over America.

When Tommy assembles a team, lookout! He finds the best. So you can rest assured, through your membership in ALMA, you will learn from America’s most dynamic contractors who will be sharing their secrets with you!

Premium Members will have direct access to Tommy Ganz, Rick Beaver, and the rest of the ALMA Team. You will have their direct email addresses where you can request a phone call, have any questions answered or communicate however much you need by email whenever it’s convenient for you.

Check out ALMA’s website for more information about this great organization and to become a member. We look forward to developing an ongoing relationship with ALMA that will benefit its members through providing insurance information specific to your industry. We are also available to offer comparative insurance quotes to ALMA members located in Florida.

Coverages for Commercial Auto Insurance

December 29th, 2009
by Drew Roberts, CPCU, ARM | No Comments »

Turf Magazine December 2009

Turf - December 2009

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.

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