- National Average: $45 per month (general liability only)
Whether it’s trimming trees or designing elegant outdoor spaces, landscaping businesses help make clients’ homes beautiful and inviting. However, running a landscaping business comes with certain risks that may need to be addressed through insurance coverage. Landscapers can purchase landscaping business insurance to help protect their businesses from the financial fallout of an accident, damaged or stolen equipment, and costly mistakes on the job, among other concerns. How much does landscaping insurance cost, though?
Many landscaping businesses purchase general liability insurance as minimum coverage for their business, which costs an average of $45 per month. However, each business has unique insurance needs and risk factors that play a role in the total landscaping insurance cost, and some landscaping businesses may need more extensive coverage. Other coverage types, such as workers’ compensation or tools and equipment coverage, can add to the total cost of insurance. Understanding the types of insurance available and the cost factors involved can help landscaping business owners find the right coverage at a price they can afford.
Factors in Calculating Landscaping Insurance Costs
No two landscaping businesses are the same, so it’s likely no surprise that insurance costs might be different as well. Insurance companies use a range of cost factors to help determine the cost of commercial landscaping insurance, including the location of the business and the types of services the business provides. Additionally, a business owner’s exact insurance costs often depend on their coverage options, such as the type and amount of insurance they select.
The best small-business insurance companies (such as Thimble and NEXT Insurance) typically offer different types of insurance coverage for lawn care and landscaping businesses to consider. The types of coverage a business chooses can have an effect on the total cost of insurance for landscape contractors. Coverage types could include general liability protection, which helps cover the cost of property damage, medical bills, or legal expenses if a business is found liable for an accident or other damages. Workers’ compensation is another type of coverage available with landscaping insurance, which can help pay medical bills and treatment costs as well as cover lost wages if an employee is injured on the job. Workers’ compensation insurance may even be a legal requirement depending on the location of the business. Landscaping businesses can also rely on commercial property insurance to help cover the cost of replacing tools and equipment if a covered peril causes them to be damaged or destroyed, or if they are stolen. Insurance companies tend to price out each of these insurance types separately (although bundling discounts may be available). As such, a business that needs more coverage types will often have higher overall insurance costs.
After choosing a type of coverage, landscaping business owners will have the option to customize their coverage amount, raising or lowering coverage limits to suit their needs. The coverage limit of a policy is the total amount of money the insurance company will pay out on a claim. For example, a landscape design business may have a general liability policy with a coverage limit of $100,000. If employees accidentally cause $150,000 worth of damage to a client’s property, the insurance company would only cover up to $100,000 for repairs covered by the business’s policy. The landscape designer would likely be on the hook for the remaining $50,000.
The coverage amount of a policy will affect the overall cost of coverage, as policies with higher limits tend to be more expensive.
Types of Landscaping Services Provided
Insurance companies that offer coverage for landscaping business weigh a variety of risk factors to calculate what to charge business owners for coverage. A business that’s considered to be more at risk to file a claim will often pay higher prices for similar coverage over a business that’s less likely to do so. Part of an insurance company’s process of determining risk—and thus, the price of coverage—is looking at the services a company offers. A commercial landscaping business that takes on large jobs for corporate clients, for example, may be at a higher risk for accidents or causing expensive property damage than a company that provides basic residential lawn care services. Likewise, a landscaper who offers excavation as a landscaping service will probably pay more for insurance than one who only designs backyard landscaping ideas.
Insurance companies take the geographic location of a business into account to help determine the level of risk a landscaping business might face. Businesses serving areas of higher risk often have to pay higher insurance rates. For instance, a landscaper in an area known for mudslides and wildfires that could damage business-owned vehicles or equipment will likely pay more for insurance than a business without significant risk of natural disasters.
Local regulations and legal requirements may also play a role in the cost of landscaping insurance. Many cities and states have insurance requirements for business owners. Carrying a minimum amount of workers’ compensation coverage, for example, is a common requirement in many states across the country. Those minimums may vary from one state to another, though, and business owners in one area of the country may need to carry more workers’ compensation coverage—at a greater expense—than landscape businesses in other locations.
A policyholder’s claims history is an important factor that’s taken into account when an insurance company is determining insurance rates for any type of insurance policy, and landscaping insurance is no exception. Insurance companies view policyholders who have filed multiple insurance claims in the past as a higher risk than an individual or business with few—if any—claims. A business owner who has filed one or more insurance claims may be more likely to submit additional claims in the future, as their employees may not be following industry safety protocols or taking preventive steps to avoid covered losses.
For example, a landscaping business may file several claims over the course of a couple of years for damage to clients’ homes. In that scenario, the business’s insurance provider could raise its insurance rates because it may appear as if the landscaping business is not taking the proper precautions to avoid causing property damage while on the job.
Number of Employees
Businesses that hire employees often face higher insurance costs than those run solely by a single owner largely due to workers’ compensation insurance expenses. Many states require workers’ compensation coverage for businesses with at least one employee. If a landscaping business goes from being a one-person operation to hiring a crew, the business will likely have to purchase a workers’ compensation insurance policy in addition to its other coverage types. Workers’ compensation requirements will increase as the business’s head count grows, so landscaping businesses with larger crews will likely pay more for this form of coverage.
The number of employees on staff could also have an impact on general liability insurance costs. As the size of a landscaping crew increases, the risk of an accident could go up as well. With more people performing work on a jobsite, the likelihood of someone making a costly mistake or getting injured while on the job could increase. Insurance companies generally factor in this increase in risk when calculating small-business insurance rates for general liability coverage.
Actual Cash Value vs. Replacement Cost Coverage
When landscaping business owners purchase insurance, they may have the option to choose between actual cash value and replacement cost coverage. Actual cash value coverage pays out claims based on the value of the item at the time of the loss, not what it would cost to replace it at today’s prices. This means that the insurance provider will account for depreciation when determining the value of covered items, which could lead to a smaller claim payout. A policy that has replacement cost coverage, however, pays property claims based on the amount it would cost to replace an item with a similar model.
For example, a riding lawn mower could be stolen from a landscaping business’s storage unit. Although the business owner originally paid $2,000 for the mower when it was brand new, the insurance company determines that its current value is now $500. If the landscaping business has actual cash value coverage, the insurance company will likely only pay up to $500 (minus the deductible) to replace the mower. However, if the landscaping business has replacement cost coverage, the insurance company may pay the full $2,000 (less the deductible) to replace the mower with a similar, newer model. Replacement cost coverage is usually more expensive than actual cash value coverage, but it is often worth the extra cost.
Types of Landscaping Insurance
Landscaping business owners can choose from a variety of commercial insurance types for their businesses. The right type of insurance will depend on the business and its needs. Businesses with employees, for example, may have to get workers’ compensation insurance, while a sole proprietorship without any employees on staff may only need general liability protection and coverage for their business property. Landscapers may want to work with a trusted commercial insurance agent or broker to learn more about policy options and find the coverage that best fits their business needs, goals, and budget.
General Liability Insurance
General liability insurance is a type of insurance coverage that helps protect a business from various liability concerns such as accidents on the job that result in injuries or property damage. A general liability policy works by covering the cost of financial damages that a small business may be liable to pay. These damages could include medical bills, legal fees, and the cost to repair or replace damaged property. The cost of a liability policy depends on factors such as the coverage limit a business chooses and the nature of the services it provides.
General liability policies are often considered essential insurance for landscaping business owners. Without liability coverage, a business owner may have to pay out of pocket for damages they are found liable for. For example, if a landscaping crew accidentally damages the back deck of a client’s home, the business’s landscaping liability insurance will likely help cover the cost of repairs. If the business owner doesn’t have a general liability policy, though, they may be on the hook to pay for those repairs entirely out of pocket without any financial assistance.
Workers’ Compensation Insurance
A workers’ compensation insurance policy provides protection to landscaping employees in the event they are injured while working. This type of coverage could help pay for lost wages and medical bills if an employee is hurt on the job. For instance, an employee of a landscaping business could sustain an injury while trimming a tree at a client’s home, requiring a visit to the hospital. After receiving stitches, the employee is advised to stay off the job for a few weeks. The business owner’s workers’ compensation insurance could help cover the cost of medical bills and pay the employee’s wages while they recover.
Obtaining workers’ compensation insurance may be a requirement for many landscaping businesses. In general, any business that has employees on staff will likely need to obtain a workers’ compensation policy. Many states even set minimum coverage amounts on their workers’ compensation requirements. The number of employees and the overall cost of payroll often determine how much a business pays for workers’ compensation coverage.
Commercial Property Insurance
Commercial property insurance covers the cost of replacing or repairing business-owned equipment, tools, and items after a covered peril at the place of business. Covered perils might include fire, theft, or storm damage. However, this type of policy generally doesn’t cover business property when it’s taken off-site to a client’s home or other jobsite.
For instance, a landscaping business may have an office and small nursery where it sells live trees and landscaping supplies. If a lightning storm causes a fire in the nursery and destroys some of that inventory, the business could recoup some of its losses by filing a commercial property insurance claim to cover the replacement of its inventory.
Commercial Auto Insurance
Most states require business owners who use vehicles for their business to carry commercial auto insurance. Commercial car insurance coverage is similar to a personal car insurance policy, offering liability protection in the event of an accident that causes injuries or property damage. If the business owner or an employee causes an accident while driving for work, commercial auto insurance can help cover the cost of any damages, including medical bills if a third party is injured or repairs to other vehicles. Commercial auto insurance carriers offer the option for business owners to upgrade from a basic liability policy to more extensive protection for their business’s vehicles with comprehensive coverage and collision coverage.
The cost of a commercial insurance policy will depend on the needs of the business. A large-scale landscaping operation with several company-owned trucks and trailers, for example, will likely have to pay more for minimum coverage than a business owner using their own vehicle for travel to jobsites would pay for a policy with full coverage.
Tools and Equipment Insurance
While commercial property insurance helps landscapers protect their business property at their place of business, it doesn’t provide protection when the equipment is at a jobsite or on the road. Luckily, landscapers can get tools and equipment insurance to protect their expensive equipment when it’s at a job or moving between clients. Tools and equipment insurance helps cover the cost of replacing business property that’s damaged or destroyed in a covered event when it’s not at the main business location.
In addition, theft is often covered by tools and equipment insurance. If a landscaper stores their hand tools in a locked trailer at a client’s home and a thief breaks in and steals the tools, their insurance can help cover the cost of replacing the stolen items. Insurance companies may offer tools and equipment coverage as a stand-alone policy or as an add-on to other policies, such as commercial property coverage or liability insurance.
Professional Liability Insurance
Even the best landscaping companies can make mistakes, so having protection against claims of negligence can make financial sense. Also known as errors and omissions (E&O) coverage, professional liability insurance is a type of coverage that helps cover the costs of defending a business owner against claims of faulty work or negligence. For example, a landscaping business owner may install an irrigation system to a client’s yard without getting the proper permits from the city. As a result, the client is assessed multiple fees from the city for an unauthorized irrigation system and, in turn, decides to sue the landscaper for damages. In this case, professional liability insurance could help cover the cost of the landscaper’s defense against the lawsuit and could cover all or a portion of the settlement amount.
Business Owner’s Policy (BOP)
A business owner’s policy, usually shortened to BOP, can be one of the most helpful types of insurance for landscaping small-business owners. A BOP combines general liability insurance with commercial property insurance to provide more comprehensive coverage at a lower price than buying stand-alone policies. A BOP could be an affordable way for a one-person operation or small business to get a combination of liability and property insurance.
Choosing a BOP over individual liability and property insurance policies could help a new or smaller landscaping company lower its insurance costs. However, business owners may want to pay attention to the coverage limits on their policy and talk with an insurance agent or commercial insurance broker to learn about coverage limit options on a BOP over individual policies.
Do I need landscaping insurance?
Most landscaping business owners find they need some type of insurance. Their state might require certain types of coverage or they may have a client that only works with insured businesses. Even when it’s not required, many business owners enjoy the peace of mind insurance coverage provides, so they know they’re financially protected if an accident or covered loss occurs. There are a few situations, however, for which a landscaper may be required to have insurance.
States may require landscaping businesses, or other small businesses, to carry a certain amount of insurance. Most notably, any business with employees will likely need to purchase workers’ compensation insurance to meet state requirements. However, the exact amount of coverage needed can vary from one state to another. As such, business owners may want to check with their state’s labor and insurance division to learn more about state insurance requirements.
It’s not uncommon for landscaping clients to exclusively work with landscapers who carry insurance. Clients might require landscaping businesses to have liability insurance to help protect their homes, families, businesses, or customers from the perils of an active landscaping project. For example, a restaurant client that hires a landscaper to redesign and maintain the front garden of their business entrance may require the landscaper to have adequate liability insurance to protect both restaurant patrons and the business itself from accidents when the landscaping crew is present.
Business Property Protection
Operating a landscaping business often requires business owners and their employees to travel to and from clients to complete work. The more often a business’s expensive gear and equipment is on the road or out of locked storage, the greater the chances are for it to be damaged or stolen. The cost to replace stolen or damaged property out of pocket could quickly become prohibitive for landscaping businesses running on tight margins.
With business property insurance, a landscaping business owner can reduce their risk of financial loss if their equipment is damaged or stolen. While this type of coverage is not generally required, many business owners see the benefit of commercial property and tools and equipment insurance because of the financial protection both types of coverage offer. By investing in insurance, a business owner can reduce the chance that they’ll have to cover the cost of damaged equipment out of pocket.
Business Liability Protection
Whether a client or state law requires liability coverage or not, many landscaping business owners feel that this protection is necessary. Liability insurance helps protect the business and owner from the financial devastation that can result from an accident, mishap, or lawsuits. With the potentially risky nature of lawn care and landscaping work, it makes sense for business owners to purchase liability coverage at a minimum, as it can lower the risk of financial loss after a covered incident.
How to Save Money on Landscaping Insurance
Insurance can be an important tool for landscaping business owners to use to protect their businesses from covered losses. While the cost of landscaping insurance can vary, many business owners are interested in ways to lower their costs. As noted by the Insurance Information Institute, there are several ways business owners can reduce their insurance expenses.
- Shop around: By requesting quotes from multiple insurance carriers and comparing rates, landscaping business owners can get the best deal on their coverage.
- Bundle policies: Business owners who need multiple types of coverage may get a discount by bundling those policies together.
- Choose a higher deductible: Policyholders who raise their deductible will often receive a lower rate in return. However, a higher deductible will result in a smaller payout on any claim filed.
Questions to Ask About Landscaping Insurance
Navigating commercial insurance can be overwhelming, so it’s not unusual for landscaping business owners to have questions about this type of insurance. To ensure they’re getting the right coverage at a price they can afford, landscapers are encouraged to ask their insurance agent or broker questions about coverage, costs, and exclusions. Some questions a landscaping business owner might want to ask include:
- What type of business insurance policies make the most sense for my landscaping business?
- Are there any state requirements that need to be met regarding landscaping business insurance?
- How are insurance claims filed after a covered loss?
- How can business owners reduce their insurance premiums, and what discounts might be available?
- Does the insurance agent or commercial insurance broker have experience working with landscaping businesses?
Knowing what type of business insurance landscaping companies need to purchase as well as how much coverage is needed isn’t necessarily a clear-cut choice. Insurance costs can be even more difficult to anticipate since rates can vary greatly based on a number of factors including location, services, and number of employees. Landscaping business owners can review common questions about landscaping insurance coverage and costs to get a better idea of what to expect when talking with their insurance agent or broker.
Q. What kind of insurance does a landscaping company need?
While legal requirements often vary by state, landscaping businesses may want to purchase a general liability policy, at a minimum. Some may choose to also purchase commercial property insurance or tools and equipment coverage to help protect their business’s property from covered losses such as theft or property damage—if equipment is destroyed in a fire or damaged by a water leak, for instance. In addition, businesses with employees are likely required to have workers’ compensation coverage. Regardless of their specific needs, landscapers would be well served to seek out one of the best insurance companies for lawn care businesses.
Q. Can a client be liable for a landscaper who has no insurance?
If a landscaper is injured on a client’s property, it is often on the landscaper’s employer to take responsibility. If the company isn’t properly insured, the homeowner or client may be legally responsible for accidents on their property.
Q. What are the three categories of risk in insurance?
There are three main types of risks in insurance: property risk, personal risk, and liability risk. Property risk refers to prospective dangers to business or personal property, such as a fire destroying a lawn mower. Personal risk involves threats to a person’s life or health—for example, if a landscaping business owner accidentally slips while carrying backpack leaf blowers off a trailer and injures themselves. Finally, liability risks are threats related to legal responsibility for injuries or damages to a third party—for instance, if landscapers were to accidentally break a window or otherwise cause property damage to a client’s home while on the job. For instance, if an employee is involved in an accident while driving a business-owned truck, then the landscaping business may be legally responsible for repairing the other driver’s vehicle and paying their medical bills.
Q. Are most landscapers insured and licensed?
While not all states require landscapers to carry insurance or get a license, many landscaping businesses still go through these processes. Many professional landscaping organizations encourage clients to work only with landscapers who are licensed and insured. By licensing and insuring their business, a landscaping business owner can help reduce their financial risks and potentially earn more business over non-licensed or non-insured competitors.
Q. What is a surety bond for landscapers?
A surety bond is a legal agreement that works similarly to an insurance policy for the benefit of landscaping clients. Landscaping companies can purchase a surety bond as a type of financial promise to their customers. If the landscaping company damages the client’s home, doesn’t complete the job, or provides subpar work, the client can contact the surety bond company for financial compensation to recoup some or all of their lawn care costs.