June 9th, 2009
by Drew Roberts, CPCU, ARM | No Comments »
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.
June 4th, 2009
by Drew Roberts, CPCU, ARM | 1 Comment »
Liability Loss Exposures
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.
October 29th, 2008
by Drew Roberts, CPCU, ARM | No Comments »
Umbrella and excess liability policies are used to increase the liability limits above the underlying policies of your landscaping business. The basic distinction between excess liability insurance and umbrella liability insurance is:
- Excess liability policies are designed to provide coverage above the limits of the underlying coverage. It offers no broader protection than that provided by the underlying policy. In fact, the excess liability coverage may even be more restrictive than the underlying coverage.
- Umbrella liability policies are a type of excess liability that not only provide additional limits (as excess liability policies do) but also provide coverage not available in the underlying coverage. When additional coverage is provided by the umbrella liability policy, it is usually subject to the insured’s assumption of a self-insured retention, or retained limit.
The image below demonstrates the basic difference between excess and umbrella liability policies. In this example, both the excess liability policy and the umbrella policy provide $1 million of additional liability coverage for the same losses covered by the underlying policies. In addition, the umbrella policy covers some losses not covered by the underlying insurance, subject to a self-insured retention of $25,000.
Diagram of Umbrella vs Excess Liability Coverage
Most umbrella and excess liability policies are not written on standardized forms, so it is always important to read your policies to see what they actually cover. In actual practice, the line between excess and liability coverage is often blurred. Many excess liability policies are referred to as umbrella policies and since the coverage definitions are developed by individual insurance companies, umbrella and excess liability policies can vary greatly in what they actually cover. Another thing to note is that most excess and umbrella policies are written as a self-contained policy, but some are written as a following-form. In following-form policies, the coverage is not defined and simply stated that it applies only if the loss is covered by the underlying insurance.
If you ever have any questions regarding excess or umbrella liability policies for your landscaping business, please do not hesitate to contact an agent at BearWise Landscapers.
October 1st, 2008
by Chris Oakley | No Comments »
General liability is a coverage that every owner should purchase for his/her company. In the world that we live in, crazy situations occur everyday that result in some expensive lawsuits. Here is a recent example of lawsuit against a landscaping company.
At BearWise Landscapers, we strongly recommend that you obtain limits of $1,000,000 for each occurrence and $2,000,000 aggregate for the entire year policy period. As I am sure you are aware, lawsuits are very expensive in the United States and can deplete your policy limits rather quickly.
For larger companies we recommend that you take out an umbrella policy in excess to your general liability. Larger companies have more exposures and more assets to lose, making you a bigger target for lawyers to feast on.
Do not let one unfortunate event take away all the hard work you have committed to building your company. Take the necessary precautions to protect your company and your employees. Click here to request a quote for your company online.