As a landscaping company, you know your business faces many risks. Some of them you can minimize or mitigate with good management and safety practices. There are however always unforeseen events that are beyond your control. When these result in a liability claim, you can face some significant costs. You have Contractor Liability coverage so you should be fine, right?
The answer will depend on whether you have made smart decisions when it comes to your coverage.
Did you choose the cheapest policy?
Insurance costs money and you get what you pay for. It can be tempting to get the cheapest policy available to keep your costs down. The problem is it may mean you have insufficient coverage. In that case, you do not have the protection you need. It could be an expensive mistake in the long run. The right level of liability coverage is essential protection for your business. A liability claim can run into hundreds of thousands of dollars. It could easily ruin a business that does not have sufficient coverage.
Do you know what is in your policy documentation?
The idiom “read the small print” is good advice when it comes to your insurance. Each policy is different. You need to know the details of your coverage, if there are any exclusions, and if your coverage has limits.
- Deductibles – When you buy a policy, you agree on a deductible with your insurer. In the event of a claim, you will pay this amount before your insurer pays. A large deductible means you will pay a larger amount of the claim yourself. A contractor company may choose this as it means you get a lower premium (see point 1 – “cheap” can be expensive).
- Policy limits – Your policy will have limits up to which your insurer will pay in the event of a claim. If the claim is more than the limit, the insurer will only pay up to the limit. If your limits are not sufficient, you will be paying the additional costs.
- Exclusions – A policy can have a number of exclusions. A common exclusion requires Sub-Contractors to have the same amount of insurance as you. Not complying to the requirements of the exclusion means your insurer will only pay a portion of a claim against you.
Do you have the coverage and for which claims?
Your liability coverage for your contractor company covers you for specific types of liability claims. These include the following:
- Causing bodily injury to a third party
- Damaging the property of a third party
- Advertising and marketing mistakes
- Personal damage (damage to reputation)
There are many things that this insurance does not cover. For example, giving bad advice that results in a loss for your client is not covered. For this, you need Errors and Omissions Insurance. Liability coverage also does not provide coverage if your own employees are injured. For this, you require Worker's Compensation. It's so important that you have a solution that is tailored to your specific company and its needs.