About General Liability Insurance
All businesses, regardless of industry, face risks that should be covered by insurance. The most common and comprehensive type of policy business owners invest in is general liability insurance (or CGL).
Some of the risks CGL insurance covers are:
- Bodily injury
- Property damage
- Medical payments
- Legal defense and judgment
- Personal and advertising injury
While businesses aren’t legally required to carry general liability insurance, operating without it is extremely risky. If your business is sued, you could end up facing fees totaling hundreds of thousands of dollars (or more). Having a sufficient CGL policy in place to help compensate for these damages is the only way to prevent this type of event from devastating your business.
COMMON SITUATIONS THAT GENERAL LIABILITY INSURANCE WOULD COVER FOR A LAWN CARE COMPANY
Example 1: Your employees mix up the orders for two different jobs that day, spraying a client's garden and lawn with pesticides that ultimately damage the property. General liability insurance would probably help cover the damages owed or settlement reached in the event your business is found liable.
Example 2: At your business’s storage warehouse, an employee brings his friend along to check out the equipment. The friend messes around with the machinery, leading to a serious injury. If found liable, your business would probably be covered for damages through general liability insurance.
Example 3: A customer offers the use of his riding lawn mower, which your employees accept. A worker climbs in and accidentally drives the mower into an expensive fountain, damaging it as well as the mower. General liability insurance would likely be able to assist in covering damages owed by your business if found liable.
Of course, this is not an exhaustive list of perils a general liability insurance policy will cover, and some conditions may result in a particular peril not being covered. It’s always best to talk to your agent in-depth about the specifics of your policy to avoid blind spots in coverage.
Cost Of General Liability Insurance
The average lawn care company in America spends between $400-$1,500 per year for $1 million in general liability coverage.
Check out the chart below for a snapshot of average CGL expenditure across a variety of industries:
Several factors will determine the price of your policy. These include your:
- Number of employees
- Per-occurrence limit
- General aggregate limit
You may be able to acquire general liability insurance at a discounted rate by purchasing it as part of a business owner’s policy (BOP) rather than as a standalone policy. A BOP is a more comprehensive solution that includes multiple forms of coverage, such as business interruption and property insurance.
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Other Types Of Coverage Lawn Care Companies Need
While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some other types of insurance all lawn care companies should obtain:
Commercial Auto Insurance
A lawn care business is necessarily mobile, and it usually owns a lot of equipment. This means you will almost certainly be using commercial vehicles to haul expensive tools and machinery to client homes and businesses. Insure your business’s vehicles and get covered for accidents on the road, protecting your operation from surprise automotive repair expenses and accident suits.
Professional Liability Insurance
A business that provides careful, expert services should always carry a policy like this. Professional liability insurance provides coverage in the event that your business is charged with negligence or similar failures pertaining to the conduction of its duties. If your care service mismanages someone's lawn, they may sue for poor service/failed contractual obligations. Keep your company safe from potential customer dissatisfaction and the far-reaching financial consequences that it can entail.
Commcercial Property Insurance
Your lawn care business will definitely require a collection of professional tools and other equipment to do its job. Of course, if that property is damaged by things like fire or violent weather, you can find yourself in big trouble. Keep your company insured with a policy like this, and you can rest easy that any business equipment and owned real estate will be covered in the event of certain disasters.
Types Of Coverage Some Lawn Care Companies May Need
In addition to the policies outlined above, there are a few other types of coverage your lawn care company may require depending on certain aspects of your operations. Some of these might not apply to you, so be sure to ask your agent which policies are right for your business.
Workers' Compensation Insurance
A big lawn care business will require workers to manage the incoming business from clients across your area of operation. Full-time and part-time employees legally require compensation insurance to keep them covered for on-the-job accidents and similar incidents. In a case of personal workplace injury, employees will be provided disability and even death benefits by a workers’ compensation policy, helping to provide for both employees and their families in times of hardship.
Additional Steps To Protect Your Business
Although it’s easy (and essential) to invest in business insurance, it should not be your frontline defense. Yes, insurance will compensate for your business’ financial losses after an incident occurs, but it’s much better to avoid losses altogether.
With this in mind, here are three things you can do to better protect your business:
- Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
- Set up a limited liability company (LLC) to protect your personal assets. (Refer to our guide for step-by-step instructions on how to form an LLC in your state.)
- Streamline your business’ internal processes. This will remove unnecessary variables from common tasks and create a safe, consistent environment for conducting business.
FREQUENTLY ASKED QUESTIONS
What is included in a business owner’s policy?
A typical business owner’s policy includes general liability, business interruption, and property insurance. However, BOPs are often customizable, so your agent may recommend adding professional liability, commercial auto, or other types of coverage to your package depending on your company’s needs.
What is the difference between business insurance and general liability insurance?
“Business insurance” is a generic term used to describe many different types of coverage a business may need. General liability insurance, on the other hand, is a specific type of coverage that business owners need to protect their assets.
Do I need insurance before I start a business?
You should invest in coverage for your business before your first interaction with a customer. Although the cost of insurance may seem high for a brand new business, it’s best to be proactive when it comes to protecting your assets. After all, you can’t buy insurance to cover a loss that has already occurred.
Will insurance protect my business from everything?
Not necessarily. Certain exceptions may be written directly into your policy, and some perils may be entirely uninsurable. Be sure to discuss the scope of your policy in-depth with your agent to avoid being blindsided by holes in your coverage.