At first glance, landscaping businesses might seem relatively simple. But look more closely and you’ll find landscapers do much more than just maintaining gardens and grass. Contractors who provide lawn care services need an insurance policy tailored to their business, and one that covers the many risks they face in their line of work. NIP Group’s LandPro is an insurance program focused specifically on landscape insurance for the green industry. As experts in the landscaping industry, we see opportunity knocking for landscaping contractors and insurance brokers alike. And, as your specialty insurance partner, here are five excellent reasons why landscaping insurance is a must for your client portfolio.
1) Enormous growth potential
Over the past five years (2017–2022) the U.S. landscaping services industry grew at an average rate of 7% annually. From 2023–2030, compounding annual growth rates are expected to hit 6.4%, with worldwide industry revenues climbing to nearly $500 billion by 2030.
Unlike many other service industries, the landscaping services industry rebounded quickly after lockdowns from the COVID-19 pandemic in 2020. Spending on landscaping services fell in 2020ff but quickly ramped up in 2021 as Americans poured free cash into beautifying their lawns and gardens.
During the COVID-19 pandemic, many U.S. households took up gardening, increasing spending on landscaping equipment. However, as we return to pre-pandemic habits, demand for landscaping services continues to rise.
In some cases, homeowners will increasingly rely on landscaping professionals as they age and either lose the ability to maintain their grounds themselves or choose to enlist a property management professional. Baby boomers (those born between 1946 and 1964) are a prime example of this segment, accounting for roughly 20% of the U.S. population. As these individuals continue reaching retirement age, many will turn to landscaping professionals.
One final boon to the landscaping and lawn services industry is development. While residential housing starts may be slower due to recent rate hikes, multifamily real estate is enjoying its moment, creating new opportunities for landscaping services professionals.
2) It’s a niche market that requires specialized expertise
Landscaping businesses perform a variety of different services, particularly in geographic areas with more severe seasonal changes. As a result, the landscaping services industry is a niche market for insurers and a business that demands specialized expertise.
In addition to lawn care and landscape gardening, people also hire landscaping and lawn service contractors for:
- Tree pruning and removal
- Tree spraying and pesticide application
- Plan health care
- Sprinkler and irrigation system installation and repair
- Snow and ice removal
- Subcontracted work
Standard horticultural services insurance typically includes professional liability insurance, workers’ compensation and property coverage. While those coverages are an essential part of any commercial insurance package, they won’t necessarily insure against all losses a landscaping contractor might suffer.
The right landscaping contractor insurance will provide the most comprehensive coverage and support, including specialized coverage options for all the risks landscaping pros face, like crane and boom exposures and snow and ice removal. LandPro covers all these risks and more, empowering brokers to offer a better product, and giving landscaping contractors the confidence to know they have the specialized coverage they need to protect their businesses.
3) No one company owns more than 5% of the market share
Unlike telecommunications providers, airlines and online retailers, the landscaping industry is neither an oligopoly nor a monopoly. Across the U.S., no single landscaping company owns more than 5% of the market share, with the five largest landscaping companies (by gross revenues) accounting for less than 6% of the total market.
Though larger landscaping companies have invested millions in expanding to new markets and establishing a nationwide footprint, the industry continues to favor local businesses. Even BrightView, the nation’s largest landscaping services company, only has a physical presence in 34 states, and, in many of those, has just one business location statewide.
As of 2022, the U.S. was home to 627,784 landscaping businesses. Besides the fact that the industry itself is on the rise, there’s also an incredible opportunity for insurance brokers to help these businesses protect their assets. Since each landscaping company only captures a small fraction of the market share, insurance brokers can win and nurture business relationships with multiple landscaping contractors rather than relentlessly pursuing the few incumbents in sectors subject to oligopolies and monopolies.
4) Improved client retention
One of the most effective ways to retain clients is to provide a superior product and understand your clients’ businesses. While some churn is inevitable, a thriving business that has a strong relationship with its insurance broker is likely to continue staying the course and enjoying its success.
Understanding the complexities of a landscaping business and providing a comprehensive risk management solution can help forge lasting relationships between insurance brokers and business owners. According to an article published by InsurTech World, poor product coverage and negative claims experiences are one of the top reasons customers leave their insurers. PropertyCasualty360.com also states that “44% of commercial clients said they don’t think their insurer understands their business,” with 19% reporting difficulty finding specialty coverage tailored to their business.
When working with complex businesses, basic insurance coverage is bound to lead to unhappy customers, whether it’s through poor product coverage or a bad claims experience. Many businesses make the mistake of thinking commercial insurance is a one-size-fits-all, overlooking key business risks until it’s too late. For businesses (like landscaping) that have specialized risk management needs a specialty insurance policy is more than a good idea—it’s a necessity.
Contractors who provide lawn care services know how hard it is to find the right insurance coverage. If you’re a broker, you can grow your book of business and improve retention by offering specialized horticultural services insurance through LandPro and providing your landscaping clients with the coverage they need to protect their businesses.
5) Portfolio diversification
Diversification is a key component for long-term success and profitability, particularly as the industry evolves. The insurance industry hinges on risk mitigation, and though brokers might not be the ones underwriting the risk directly, they still face systemic risks. Say, for example, an insurance broker focused solely on hospitality businesses. In 2020, U.S. hotel profitability plunged by almost 85%. A broker with a diversified portfolio would still feel the impacts of this decline but would be far better off than the broker whose book consisted primarily of hospitality businesses.
Since the landscaping services industry is home to so many small and medium-sized businesses, having several of these businesses in your portfolio offers additional opportunities to diversify. Every business should diversify to hedge against risks and market fluctuations, and it should go without saying that commercial insurance brokerages are no exception.
Conclusion
As a niche market that continues its growth trajectory, the landscaping and lawn care services industry presents an excellent opportunity for brokers to grow and diversify their portfolios. The demand for specialized coverage tailored to the risks of landscaping professionals means brokers can position themselves to win more business and retain more clients. NIP Group’s LandPro is a comprehensive insurance program designed to give landscaping contractors security and peace of mind so they can focus on successfully running their business.
To speak with an expert, submit your accounts, or get more information on LandPro coverage and case studies, visit the LandPro web page.
