By Mitchell Sharp
There are many parts to owning and operating a lawn care or landscaping business that have nothing to do with the work itself.
You must be able to find dependable employees at the right salary. Once you have hired an adequate staff, you must find the right customers. Once you have found the right customers you have to know how much to charge those customers in order to be profitable. Once you have those customers you have to implement quality assurance measures in order to keep those customers happy with your work.
One aspect that frequently gets lost in the mix of all the responsibilities an owner has is purchasing proper insurance coverage to protect the business. There are many aspects of an insurance policy that the business owner should familiarize themselves with that may seem foreign to most first-time business owners.
Here are several tips to help you find the best insurance coverage, find the best price on that coverage and what you should be aware of when you have to use your insurance policy.
How do I find the best coverage?
The way to find the best insurance policies for your business depends on many things that are unique to you and your business. You may be willing to take on more risk than another business owner in the same industry.
For that reason, it is important to find an experienced independent agent with whom you trust. Once you have found a good agent, it is equally important to take a little extra time to speak long and honestly about everything your business does and does not do.
This industry is one that has numerous landscaping general liability classification codes. If you do not give enough information to your agent, they are forced to guess exactly how much risk your business takes on. It is in their best interest to always assume more risk. Doing this protects their business, but may cost your business more in unnecessary premium.
These mistakes usually get fixed in the end of term audit, but even if they find you have paid too much you still have tied up cash in unnecessary premium throughout the year.
Once you have taken care of finding a good agency to partner with and you have spoken with them about all the activities your business partakes in, it is important to ask them what all coverages do you need and what may you be able to do without.
At this point it is important to remember the agent works for you. If you are honest with him about how much risk you are willing to take then they should be able to give you the proper information to cover your business as you prefer. It is important to remember that insurance agents interact with business owners not only when they are selling them a policy, but also when a disaster has occurred.
They may be offering you an extra product not only because they can make more commission on it, but also because they have interacted with a business owner in the past who had a claim occur at their business where they were not covered. Depending upon the size and severity of the disaster, having the right coverage can mean the difference between being closed for two weeks and never opening your business again.
How do I find the best price?
Once you have found a good agent and you have spoken with them about all the ins and outs of your business, it is important to ask for all credits and debits that your business qualifies for.
The best way to do this is to let your agent know what is most important to you as a business owner. If you are a business owner who values price, tell them that. Insurance agents talk with many different people from many different walks of life.
The agent may interact with one customer who wants absolutely every coverage that is offered and at the highest limits possible while another business owner may be willing to take on a higher amount of risk. Some business owners just want the policy in place as fast as possible so they can get back to work.
Other cash-strapped business owners simply want the bare minimum coverage required to be in business because it is all they can afford. Never assume they know what is most important to you. Honesty is always the best policy in life and in business. Tell your agent what is important to you and if they are a good agent, they can work to satisfy your needs.
What do I do when I have to use the policy?
It is human nature to assume that bad things are not going to happen to you or your business, but the most successful businesses are those who have a plan in place for when things go wrong.
Part of that planning is having a good insurance agency on your side and working with them to make sure you have the proper coverage. Another important action you as a business owner can take is to take pictures of all equipment and property your business owns.
This can prove the state of the equipment before the occurrence. This is especially important if you buy a piece of equipment mid-term. It is a must to inform your agent of the new equipment or the new equipment more than likely will not be covered.
Once you have ensured all of your equipment is covered and you have documented how it looked before the claim, there are several steps you can take to speed up the process of getting your claim paid for and getting your business back up to normal operation.
When you do have to make an insurance claim, it is important to inform your carrier and your agency. Do not be upset if your agency informs you to contact your carrier. It is the job of the carrier to process the claim, not the agency.
At the same time, it is important to keep your agency in the loop in case the carrier is not living up to their end of the bargain. If you have injured workers, make sure they are going to medical facilities that are prepared to process the workers’ compensation system within your state. Your carrier can help you find the proper facilities.
This can drastically limit the severity of a claim and it can allow your injured worker to get the best care with the least amount of doctors’ visits possible. Keeping the injured worker on your side is important to getting them to return to work and limiting the severity of the workers’ comp claim.
If this process runs smoothly it will make your employee happy and motivated to return to work, and it will help your insurance carrier to limit the amount of the claim and prevent too much damage to your business’ experience modification rating.
Do not be alarmed if a claim stays open for a period of time after your business has gotten over the claim. Insurance agents do this in order to not have to open a second claim, which will impact your experience modification rating.
This is one of the main rating factors that can increase what you pay in premium. The carrier will leave the claim open because in many cases, an injured worker may return to work and reinjure the part of their body that was damaged.
They may find they are not fully recovered from the injury. Sometimes this can happen weeks or even months after they have returned to work. If this causes your business to file a second claim it can have a damaging effect on your rating.
EDITOR’S NOTE: Mitchell Sharp is a marketing associate with General Liability Shop.com. Mitchell has a vast knowledge of all forms of commercial insurance with particular expertise in Workers’ Compensation and Cyber Insurance. He would like to use his knowledge of digital media and commercial insurance to strengthen the small business community.