Often operating only during certain times of the year (depending on their geographic location), many landscaping businesses or garden centers may rely on spring and summer sales for most of their annual revenue. While some might turn to snow removal as a way to keep revenue up during the winter, many shut down operations in the late fall or early winter, requiring costly equipment to be stored. It can be difficult for business owners to find coverage for these assets, not to mention how the sharp decline in sales and revenue can have a significant impact on the bottom line and therefore affect insurance costs.
How to Help Business Owners during the Off-Season
Seasonal businesses have unique needs when it comes to insurance policies, which means a one-size-fits-all policy may not offer the coverage they need. Brokers can help by asking a few key questions and making specialized coverage recommendations.
Is Your Current Policy Up to Date?
Review all policies and be sure they are up to date with current market conditions. Ask policyholders when they last updated their policies. If something has changed in the client’s industry or how they do business, make any necessary changes to protect them from future losses.
What Coverage Do You Have?
Seasonal businesses may have coverage gaps or be exposed to risks they do not know about. For example, if they have employees who work for them only during the busy season, workers’ compensation insurance can protect them from claims related to employee injuries.
When protecting seasonal businesses from liability claims, excess liability coverage is an often-overlooked policy. This coverage provides additional limits beyond what is offered by a general commercial liability (CGL) policy.
What if an Employee Gets Injured or Sick and Cannot Work?
Workers’ Compensation Protection provides coverage for employees who suffer a bodily injury and for certain medical expenses related to their work-related injuries. In some states, this coverage is required by law.
Do You Have Property Coverage?
If a business operates out of a storefront or office space, they need property insurance coverage if a fire or other natural disaster damages the building. This policy protects the cost of rebuilding a structure if it gets damaged beyond repair.
The policy can cover related expenses such as temporary office space to use while your building is being repaired.
Do You Have Equipment in Storage?
Seasonal businesses often store unused equipment in storage locations while they are not in use. If these items get damaged or stolen while not in use, it can cause significant financial hardship for the business owner.
Seasonal businesses can be vulnerable to various risks, including damage from natural disasters and other catastrophic events. Inland marine insurance protects a business’ specialized equipment during storage.
Does Your Seasonal Business Have a Vehicle?
Commercial auto insurance covers vehicles that are used for a business’s operations.
What if There Is a Fire or Some Other Catastrophe?
Business interruption insurance helps protect income if a client loses regular customers or revenue due to damage from covered perils like a fire or windstorm.
Do You Have Coverage for the Actual Cash Value or Replacement Cost?
The difference between replacement cost and actual cash value is one that many business owners do not always understand. As a result, they may not have the insurance coverage they need. It’s important to explain the differences between replacement cost and actual cash value coverage to seasonal business owners.
What Unique Risks Does Your Industry Face?
Different types of seasonal businesses face various risks that require different types of coverage. For example, suppose a business sells snow sleds during the winter and then closes in April and May. The business may want to consider insuring against lost income due to weather-related incidents like hurricanes or floods that could cause damage to property or equipment and prevent customers from coming into the store during peak months. (Tip: If they don’t know the answer to this question share your expertise and knowledge to position yourself as an industry expert.)
Do You Store Customer Information Online?
Cybercrime insurance can protect against financial losses from computer hacks and cyber-attacks. It is crucial for businesses that store customer data online or in a cloud.
Matching Seasonal Businesses with the Right Insurance Policy
Seasonal businesses that cannot be insured year-round and/or are impacted by the weather can be particularly challenging to cover. These business owners should know how their industry’s risks may affect their business and what kinds of insurance can protect them.
Insurance brokers often overlook seasonal businesses because they are not open year-round, but they can be a great source of revenue, and the right policies can help them grow.
Understanding how your potential clients operate will help you figure out what coverage they need most, whether that means attaining liability protection or adequate property coverage. If you are unsure how to proceed with selling, ask questions about how the business works so you can match it with the right policy type and price.
NIP Group has over 30 years of experience with contractors that sometimes operate on a seasonal basis. Contact us today to learn more about how we have helped thousands of brokers and businesses get the specialized coverage they need.