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.

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.

After posting a couple of articles about insurance fraud in August, I was emailed a link to this article about insurance fraud on the website of Florida’s Association of Insurance Agents. The article was written by Fred Wharton and he made this comment about the economy and its impact on insurance fraud:

Insurance fraud continues to grow in the United States and is reaching into the hundreds of billions of dollars annually. With America’s sagging economy threatening well into 2009 and beyond, fraud fighters are observing many kinds of insurance schemes spiking as stressed policyholders try to bilk insurers to help bail them out of financial distress.
Insurance fraud normally increases during a troubled economy. The credit crunch, sub-prime meltdown, and general economic distress have led more insureds to seek a bailout through insurance money.

The article continues to discuss a few types of insurance fraud and how it has increased on specific policies. In conclusion, Fred mentions fraud on workers’ compensation insurance and then some of the overall impacts of this crime:

Experts on workers’ compensation premium fraud say declining economic conditions have resulted in more employers falsifying employee classification, understating payrolls or attempting to evade coverage requirements. The Coalition Against Insurance Fraud, reported “a trend towards passing laws making premium fraud a specific crime.” California, Florida, Illinois, New Jersey, New York, and Texas are among the states that have made workers’ compensation premium fraud a specific felony. This is, in part, because of growing attention being paid to the so-called ‘underground economies’ of many states. Premium schemes also will be influenced by how U.S. President Obama deals with the flood of immigrants who fuel the underground economy, the coalition’s Dennis Jay notes. Unabated, illegal immigration could encourage the social and economic conditions that allow premium fraud to thrive, thus immigration policy will need to consider the impact on costly societal problems such as premium fraud.

If you look beyond the high dollar costs and economic decline, you’ll also see honest, hardworking Americans whose lives, businesses, careers, and families are damaged or even ruined by insurance fraud crimes.

● People lose their savings. Trusting citizens are bilked out of thousands of dollars, often their entire life savings, by insurance investment schemes. The elderly are especially vulnerable.

● Health is endangered. People’s health and lives are endangered by swindlers who sell nonexistent health policies or doctors who perform unnecessary medical care to illegally inflate health insurance claims.

● Premiums stay high. Auto and homeowner insurance prices stay high because insurance companies must pass the large costs of insurance fraud to policyholders.

● Consumer goods cost more. Prices of goods at your department or grocery store keep rising when businesses pass higher costs for their health and commercial insurance onto customers.

● Honest businesses lose money. Businesses lose millions in income annually because fraud increases their costs for employee health coverage and business insurance.

● Innocent people are killed and maimed. People die from insurance schemes such as staged auto accidents, life insurance scams, and arson — including children and families. People have been murdered for life insurance benefits.

Government at all levels, federal, state and local, understand these issues and realize that insurance fraud can no longer be looked at as a victimless crime or just the insurance companies’ problem. As such, many states have mandated anti-fraud initiatives and anti-fraud plans to help combat this growing problem. Sixteen states currently require anti-fraud training; nineteen states require insurers to file a fraud plan, which includes tactics to combat fraud.

As economic recovery appears to be a lengthy proposition, industry members must do their part to become familiar with and combat insurance fraud.

At BearWise Landscapers, our goal is to provide practical and in-depth insurance information to landscaping businesses. We believe that by providing services above and beyond the typical insurance agency, that we will earn the trust of landscapers and will establish our insurance program as the expert in the landscaping industry. We believe this approach is the best way to conduct business.

This approach has received the attention of other insurance agencies and we were mentioned in this November article by Insurance News & Views, a weekly publication delivered to independent insurance agencies by the Independent Insurance Agents and Brokers Association. The article, written by Veronica DeVore, described how even though more “personal lines insurance customers [are turning] to the Internet for their insurance needs, small business owners clearly prefer working directly with an agent to purchase workers’ compensation coverage.” Here is a quote that mentions our service of providing information to your landscaping business over this website and specific workers’ compensation information on another website:

While this personal touch is clearly valued among commercial insureds, EMPLOYERS has identified a gradual shift in how customers plan to service and perhaps even purchase policies in the future. The survey reports that the Internet’s role in workers’ compensation purchases will increase from 11% to 17% in the next 12 months, and many respondents plan to go online for information and quotes at their next renewal.

“Agents have to earn their role (as an advisor) by delivering more and more value,” says Welch. “They can do so with Internet sites of their own to help the insured obtain information.”

One agency has done just that by creating a separate Web site only for workers’ compensation needs. Drew Roberts, an account executive at Black Bear Insurance Agency in Longwood, Fla., says that while agents are still at the heart of selling workers’ compensation coverage at his agency, the Web site simplifies the process by answering customer questions in detail and by allowing quotes to be submitted electronically. Roberts adds that busy small business owners like to be able to read about coverage and complete quote forms “at midnight” if they want to, and he and his fellow agents like the time they save by directing customers to the Web site when questions arise. The agency plans to add a blog section to address even more customer concerns in an online format.

“It’s a way for us to provide general information and an introduction (to workers’ compensation coverage),” Roberts says. “We don’t have to answer questions multiple times and we can answer them more thoroughly by using the Web site.”

Our hope is that you continue to find this website informative and practical for your business insurance needs. If you have any insurance related issues for your landscaping business that are not addressed on this website, please contact me with them. I look forward to continually providing a quality insurance service to the landscape industry and appreciate the opportunity that you give us to do that.

Thank you!

As an insurance agent specializing in the landscaping industry, I am often asked: “What types of insurance do I need?”

I think this is a great question and I recommend that you ask yourself and your insurance agent this question periodically as your landscaping business grows and every time your operations change. The purpose of insurance is to finance specific risks in your business. It is also helpful to keep in mind that insurance is a contract and the premium you pay purchases those exact coverages as defined by the insurance policy.

This response does not answer the question and there is not an easy answer to this question. Your insurance limits, types of insurance, and exact coverages, should be customized around the unique exposures of your landscaping business. As a lawn care business with one owner and no employees, this is easier to recommend. But even with these businesses, there is a lot of variety in insurance needs. Some of these businesses may be more comfortable with risk or have low values on their equipment and may not need to carry equipment floater insurance. Some may have one large commercial client and need higher limits of insurance to protect that exposure to loss. The insurance you should carry for your business depends entirely on the specific characteristics and needs of your business.

I leave this open-ended because I encourage you to look at your own insurance needs and analyze if they are properly covered with your insurance policies. Feel free to contact me directly or one of the other insurance agents at BearWise Landscapers if you would like to discuss this issue. We are available not only to offer insurance quotes, but also to be a resource.

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.

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.

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”.

As business owners, you are often approached with advertisements and salespeople that state you can save 15% or more on your insurance premium from this company or that company. Some of these companies may actually have better rates and would save premium dollars for your business, but other companies will simply cut coverage to lower the premium. It is important to understand the coverage offered by different insurance quotes and how insurance premium is calculated.

Insurance premiums are usually computed using a predetermined rate that is multiplied by either your payroll or revenue totals for the policy term and then adjusted based on your business characteristics. For example, workers’ compensation insurance in Florida has rates predetermined by the state government and all insurance carriers in the state use those rates by multiplying it by your payroll in the appropriate classifications. Here is a link to an article with the 2009 rates for Florida landscaping businesses.

The insurance premiums for general liability policies are based either on your projected payroll or your projected revenues. This rating basis is then multiplied by a rate determined by the insurance carrier. When comparing premiums on these policies, you can look at the specific rate or make sure that both insurance carriers use the same payroll or revenue figures.

Equipment floater insurance typically has separate rates for the value of equipment that is individually scheduled on the policy and the value of unscheduled equipment that is protected under the blanket equipment coverage. As is the case for the other insurance policies, these individual rates should be listed on the ‘declarations page’ of the policy documents.

As a landscaping business, if you ever have questions regarding insurance rates and total premiums, please feel free to ask an insurance agent at BearWise Landscapers. We would also welcome the opportunity to walk through comparative insurance quotes received by your business to analyze differences in coverages and actual rates. Let us know how we can be of assistance to your business insurance needs!

If you are bidding on a project and find out that they owe their previous lawn maintenance contractor over 5,000 dollars and have a reputation for burning bridges with their landscapers before that, would you still try to pick up that client?

You may answer that question ‘no’ or ‘yes’ or ‘yes with certain conditions’. No matter which way you answer it, you are weighing the risks of that type of a client in your mind against the risks of the amount of profit you could receive by doing the work. For this article, the term ‘risk’ is defined as uncertainty about outcomes that can be either negative or positive.

More than likely, if you chose to still bid on that project and service the client, then you would take measures to reduce the risk that this client would avoid paying you for the work you completed. The same is true for all of your clients and all of the risks you face as a business owner. By using an enclosed trailer instead of an open trailer, you are forfeiting some of your employee’s time on each jobsite towards getting out their equipment. But you are reducing the risk that your equipment will be stolen, so your business chooses to accept the tradeoff or not accept it.

This is the essence of controlling risks.

Risk control is a conscious act or decision not to act that reduces the frequency and severity of losses or makes losses more predictable. Risk control techniques prevent losses, reduce the severity of losses, and speed recovery following a loss. Risk control techniques can be categorized into one of six broad categories:

• 1. Avoidance – involves ceasing or never undertaking an activity so that the possibility of a future loss occurring from that activity is eliminated.
• 2. Loss Prevention – a risk control technique that reduces the frequency of a particular loss.
• 3. Loss Reduction – reduces the severity of a particular loss.
• 4. Separation – disperses a particular asset or activity as part of the organization’s working resources.
• 5. Duplication – uses backups, spares, or copies of critical property, information, or capabilities and keeps them in reserve.
• 6. Diversification – spreads loss exposures over numerous projects, products, markets, or regions.

As your business engages in risk control, it is important to keep in mind the main goals of controlling risks. These goals are as follows:

• - Implement effective and efficient risk control measures
• - Comply with legal requirements
• - Promote life safety
• - Ensure business continuity

During these tight economic times, every expense can impact the bottom line of your business. When was the last time that you reviewed your insurance premiums to cut costs? As an insurance agent specializing in the needs of landscaping businesses, there are four standard coverages I recommend to all landscapers that have at least one employee:

• 1. General Liability – pays losses arising from real or alleged bodily injury, property damage, or personal injury on business premises or arising from business operations.
• 2. Commercial Auto – pays losses for damage to company vehicles and trailers as well as injury and property damage to others as a result of vehicle liability and is typically required by state governments.
• 3. Equipment Floater – provides protection for tools and equipment from a number of exposures such as theft.
• 4. Workers’ Compensation – covers the cost of medical expenses and disability payments to employees that are injured at work, and it is required by state governments.

These coverages can be written on four separate policies, or the first three can be combined into one package policy that usually allows a premium reduction. With insurance, it is important to understand that each state has its own insurance department, so there is some regulation variety that affects these coverages across the country. This is most evident with workers’ compensation, and you should find out how your state’s statutes impact this coverage for your business.

Your premium for each of these coverages begins with the rating basis. Each coverage is rated differently. General liability insurance can be rated based on revenue, payroll, or number of employees. Commercial auto insurance is based on the value of the vehicles, drivers and their driving records, radius of operations, and a few other things. Equipment floater insurance is based on the value of the equipment and workers’ compensation insurance is based on payroll. Take a look at your current insurance policies and ask your insurance agent if they have carriers that can rate you based on another rating basis and what premium level those quotes had.

On all of these coverages, there are opportunities to receive discounts for safety measures that your business takes to prevent claims. Be sure to have these in writing and communicate them to your insurance agent. Your agent can relay this to the underwriter at your insurance carrier, and many of them have the authority to manually add discounts to your premium for safety procedures. Some states, like Florida, also have a safety discount included in their workers compensation statutes. Examples of procedures that often impact an underwriters’ decision to add a discount include a written safety manual for employees, strict enforcement of rules in equipment manuals, routine maintenance of equipment, theft prevention procedures for storing equipment, drug free workplace testing, and many others.

Previous claims also impact your current premium. The impact differs by type of coverage and the rating technique and formula used by the individual insurance carriers. Don’t hesitate to ask what impact your previous claims have on your current insurance premiums.

If you have any specific questions regarding insurance premiums paid by your lawn care, tree trimming, sprinkler repair, or landscape installation business, please feel free to ask our insurance agents or request a comparative insurance quote from BearWise Landscapers.