Are you starting a lawn care or landscaping business? That’s great! With the many different services landscaping companies offer, it can be a great business to have – however, it’s no surprise that you’ll need to make sure to purchase an insurance policy that covers you properly.
How do you know which coverage you need? What amount of coverage should you choose – and how much will it cost? Read on to find out.
Related – Guide to starting a lawn care business
What are Some of the Risks of a Landscaping Business?
When it comes to landscaping, there are many categories of services you can choose to provide to your customers, including:
- Landscape design
- Tree trimming
- Lawn mowing and care
- Irrigation installation
- Pest control
While there are so many other options you can choose to offer your clients, there are general risks involved with these services that you’ll need to be covered for.
1. Damages to Your Supplies
How do you get from place to place? Where do you store your equipment? Do you use specialized power equipment?
If you travel to different homes with a truck, van or using multiple methods of transportation, you’ll want to make sure that your vehicles are all covered for potential damage.
Furthermore, your supplies – including power equipment, tools, and general landscaping supplies – should be protected in the event of theft, fire, and more.
Do you have a plan in place in the event you or your staff get injured on the job? With all the specialized tools and equipment being used to service your clients’ landscapes, injuries are common – to you, your staff, and even the homeowner – so it’s an important thing to remember.
3. Chemicals and Pesticides
If you use any chemicals at your job site, including lawn treatment and insect repellant, it’s important to remember that they can have a negative impact on the health of you, your workers, and the homeowners – especially if mishandled or not applied properly. Risks can include:
- Leaving chemicals unattended
- Accidentally releasing or spraying pesticides
- Spraying personal belongings of the clients (i.e., toys, outdoor furniture, vehicles)
- Not complying with EPA guidelines (such as posting signs or providing notice to neighbors)
4. Damage to the Work Site
Landscaping and lawn care businesses have to be prepared for any potential damages to their client’s properties. For example, this can include:
- Having large equipment and tools on the property
- Using equipment incorrectly
- Doing something other than what the client requested
- Accidental fires (which could be caused by gasoline or other flammable surfaces)
- Damaging others’ property with a business vehicle
Types of Insurance Coverage a Landscaping Business Should Consider
With the many risks involved in lawn care and landscaping, insurance coverage is really important. It’s crucial to set up policies that can protect you as the business owner, your employees, the homeowner you’re servicing, and your equipment.
Generally, purchasing a Business Owners Policy (BOP) will provide you with all the coverage you need – however, it’s important to know what to include. Here are the must-have insurance coverages for your business:
1. Business Auto Insurance
Whether you have a work van, a truck, a standard-size vehicle, a tractor, specialized lawn care vehicles, or a combination of the different options, a business auto policy can cover all of them – and will make sure you’re covered for:
- Damage to your vehicles or someone else’s vehicle as a result of an accident
- Property damage (i.e., in the event your vehicle causes damage to a fence, pole, or other fixed objects)
- Liability (in the event you are sued due to a motor vehicle accident)
- Injuries and medical bills (to the drivers of your vehicles and a third party)
How Much Does Business Auto Insurance Cost?
The annual cost for business auto insurance can vary depending on:
- How many drivers are operating the vehicles – and their driving records
- How many vehicles are on the policy
- The type of vehicle (i.e., specialized tree-trimming trucks vs. a standard van)
- How much coverage you choose to have
Costs range approximately $1,800 – $2,880 per year ($150 – $240 per month).
2. General Liability Insurance
Simply put, general liability insurance covers you in the event your business gets sued for nearly any business-related issue.
This coverage will make sure you’re covered for injuries and damages caused by you and your employees at any of your work sites. If you have a physical business location where you meet clients, sell products, or offer consultations, you’ll need to make sure to add that location to your liability insurance.
In particular, you’ll need this coverage to protect you from lawsuits that might arise from:
- Improper use of equipment
- Damages from chemicals and pesticides
- Injuries to bystanders and homeowner
- Damage to the worksite
- Negligence on your or your employee’s part
- False advertising
- Products liability coverage (if you sell products at your physical location)
Typically, the best coverage option is to select a “Per Occurrence” option for your liability. This means that you’ll be protected for every incident that occurred during your policy term, as long as you had an active policy at the time.
Coverage amounts will typically be offered in increments of $1,000,000. You might see this coverage listed as:
What this means is that you’ll have $1,000,000 in coverage for each occurrence (i.e., each time you get sued), with a maximum of $2,000,000 in coverage for the entire policy period (typically 1 year).
How Much Does General Liability Insurance Cost?
This tends to vary depending on:
- How many sites the business typically visits per week
- Whether or not you have a physical location
- The type of services your landscaping company offers
- How many employees you have
- Whether or not you have been sued in the past
On average, a $1,000,000/$2,000,000 general liability policy will cost approximately $500 – $1,500 per year.
3. Business Property Insurance
Lawn care businesses need to be covered in the event something happens to your property (including tools, equipment, office furniture, cash on-premises, and more) or if there’s damage to property rented by you. Typically, this will cover you in the event of:
- Pipe burst
- Loss of use/Business Interruption (i.e., you can’t stay in your office space due to one of the reasons above)
It’s important to keep in mind that business property insurance only covers your items if they’re damaged in your specified location – and not anywhere else.
How Much Does Business Property Insurance Cost?
The average cost of business property insurance coverage for a landscaping or lawn care business is approximately $500.00-$1,000.00 per year and can vary based on:
- The type and size of the location (i.e., storefront, storage facility, large office space)
- How much coverage you need
- The approximate total value of tools and equipment kept on-premises
4. Inland Marine Insurance (Tool Coverage)
Don’t let the name fool you! This is essential coverage for lawn care and landscaping companies since it protects all of your tools and equipment no matter where they are – whether it’s in transport, in storage, or currently in use at a worksite.
Typically, this policy covers you in the event your tools and equipment are lost, stolen, or damaged – and is especially important for your:
- Power tools, including lawnmowers, leaf blowers, motorized trimmers, and generators
- Hand tools, including shovels, rakes, and clippers
- Equipment that you lease to others
Most insurance companies require that large items and power tools be 5 years old or less, and you’ll be required to take an itemized inventory of what you’d like to be insured.
How Much Does Inland Marine Insurance Cost?
Inland Marine policies for landscaping companies will typically cost anywhere from $100.00-$500.00 per year.
5. Workers’ Compensation Insurance /Disability Insurance
If you have employees, purchasing a worker’s compensation policy is extremely important. In fact, most states require that you maintain a current and active policy.
A worker’s compensation policy will cover you and your employees in the event of:
- Injuries sustained while working, regardless of how they occurred
- Loss of wages
- Disability caused by work accidents
How Much Does Worker’s Compensation Insurance Cost?
Costs vary based on the risk of injury involved, the number of active employees, and the total salary that each employee is paid per year. On average, worker’s compensation policies for a landscaping company can cost $1,500 – $3,000 per year.
The Bottom Line
With the different services you can offer, it’s important to make sure your lawn care or landscaping business is covered properly. Purchasing a Business Owners Policy can make sure that you’re covered for everything listed above – and having one policy (under the same insurance company) can save you money.
Here are the average annual costs for a landscaping company’s insurance coverage:
- Business Auto: $1,800 – $2,880/year
- General Liability: $500 – $1,500/year
- Business Property Insurance: $500 – $1,000/year
- Inland Marine: $100 – $500/year
- Workers Compensation: $1,500 – $3,000/year
In total, insurance for your landscaping business will cost approximately $4,400 – $8,880/year.
Have additional questions about starting your landscaping business? You’ll find all the answers here.