Landscapers face a higher-than-average risk of having a liability claim filed against them. Landscaping encompasses a wide variety of duties that can extend beyond general lawn care and maintenance. Many landscape contractors also install water features, and do more complex jobs that increase their liability risks. Many landscapers manage this risk with general liability insurance coverage. But, what happens if someone sues your landscaping company and the limits provided in your general liability policy aren’t enough to cover the damages awarded by a court? That’s where an excess liability insurance policy can save the day. Let’s learn more about it.
Understanding Liability Insurance Coverage and How it Protects Your Landscaping Business
Unfortunately, we live in a society where litigation of a small business is a common occurrence. Even the most safety-conscious companies can have an incident that can prompt a client to file a liability claim and sue your landscaping business.
Claims also sometimes happen because a client has a different perspective than you do. They may claim one thing happened when something altogether different is true.
General liability coverage helps pay for bodily injuries, third-party property damage, and medical expenses related to a claim that arises from the actions of your landscaping business. It also pays legal costs and judgments associated with those claims.
Most businesses have general liability policies with a $500,000 to $1,000,000 limit. If a claim is awarded above your coverage limit, it can devastatingly impact your business. For this reason, it’s recommended that you also carry excess liability insurance for your landscape business.
As a landscape business owner, you are personally invested in your business. It takes years of hard work to reach the level of financial success you desire. One significant claim against your company can impact you financially, legally, and personally.
A lawsuit can mar your reputation and good standing too, which is why it’s always best to try and settle out of court. Even when that doesn’t happen, the cost of going to trial is tremendous.
According to the Small Business Administration, the legal cost to defend your landscaping business can cost up to $150,000. That’s not even considering the judgment that a court could award to the client, which could run in the hundreds of thousands or even millions of dollars. Let’s look at a couple of examples.
Excess Liability Claim Example #1
Your landscaping business is hired to dig extensive garden beds, install a pond feature, and more. While digging a plot of land, your landscaping company’s tools or machinery breaches a gas line, sending flammable fumes around the worksite. Unfortunately, one of your other workers doesn’t realize what’s happened and lights his cigarette, and the fumes from the gas leak cause an explosion. Nearby structures are damaged or destroyed, as are a couple of vehicles. But even worse, someone is killed in the blast. Multiple plaintiffs sue your landscaping company, and the monies by the court surpass your standard liability limits in your general liability insurance by almost $1 million. Thankfully, you were wise and also took out an excess liability insurance policy, which will pay for what isn’t covered by your general liability policy.
Excess Liability Claim Example #2
Let’s say that your landscaping business does more than just keeping lawns looking nice. Your company also trims trees. A homeowner has contracted you to cut away a couple of large branches that are getting too close to their home. You’ve done everything right to ensure a safety zone, but just as the crane is carrying a cut limb away from a tree, the nervous homeowner runs outside, anxious that the branch will fall on his prized 1970s mustang. Your employee is distracted once he notices the homeowner, and what’s more, the limb falls from the air and strikes the homeowner, causing significant injury. The homeowner cannot return to work for months and later claims that the accident has left him disabled. He sues your landscaping company, and the court awards him $1.5 million. That’s a problem because your general liability coverage has a maximum limit of $1 million. That means you are responsible for coming up with the other $500,000 out of pocket. If you had an excess liability policy, it would have paid the $500,000 for you.
A Quick Recap of What Excess Liability Insurance Will Cover
Liability insurance pays for covered amounts within predetermined limits when someone claims that your landscaping business has caused any of the following:
- Bodily injury or harm
- Property damage to a client or third party’s property
- Personal injury claims
- Advertising injuries
Suppose a client or third party can offer enough proof that your landscaping business acted carelessly, negligently, or perhaps didn’t act to prevent an accident. In that case, they may sue your company for financial damages or compensation.
Excess liability insurance will pay for covered limits that exceed the limits of your general liability policy.
Is My Landscaping Business Legally Required to Carry Excess Liability Coverage?
The legal requirements for liability coverage are different from one state to another. However, there’s something else to bear in mind aside from legal and financial reasons to carry excess liability insurance.
Firstly, if your company performs work with other contractors or with utility companies and other entities, legally, you may be required to carry general liability and excess liability coverage before you can contract work through them.
There’s also a slippery slope in that when multiple contractors perform work, any damages caused by any one of the contractors can result in legal action against multiple contractors, including your business.
Therefore, for many reasons, liability coverage is prudent to protect and manage the risks your landscaping company faces. Along with a general liability policy, excess liability coverage will give you the maximum protection your business can benefit from.
The Importance of the Right Comprehensive Liability Coverage to Mitigate Your Risks
Landscaping today isn’t simply the general groundskeeping of years past. Landscaping encompasses a wide spectrum of duties ranging from landscape design, tree pruning and removal, irrigation design or services, pesticide application, and more.
Your landscaping company may be able to get away with more minimal coverage. On the other hand, the more tasks your landscaping company provides and the more risks associated with those tasks, the more detailed and comprehensive your liability coverage needs to be.
It’s also helpful to avoid a cookie-cutter commercial liability policy from a standard insurer. As previously mentioned, landscapers tend to have more exposures that place them at a higher risk of having one or more liability claims.
Therefore, consulting with a knowledgeable specialty landscape insurer is optimal. An experienced landscape insurer such as LandPro will be able to help you identify the risks that are unique to your landscaping company. Once that is accomplished, they can help you choose the right liability coverage for your business.