We here at PaySimple are excited to introduce, Ask the Advisor, a weekly column featuring your small business questions answered by our panel of business professionals. If you would like to submit a question, or become a PaySimple business advisor, please continue to the bottom of the article.
This week’s small business question is answered by Whitney Smith, commercial insurance agent with Signature Select LLC – an IMA Company.
“I want to start my own landscaping & lawn care company. What kind of insurance coverage do I need for a landscape contractor business?”
Great question. Starting a new business is a great opportunity to work as your own boss. We see a lot of start-up companies and are here to help. It’s best to put together a business plan so you know all the different business expenses that will be part of your operations, including your insurance.
If you are just starting out, underwriters will ask about your relevant past work experience. How many employees will you have? How much will they be paid? Will you need to hire sub-contractors? What will those costs be? Do you use a contract with your sub-contractors? Do you own any work-related vehicles?
In construction, insurance is rated on the payroll of your employees and based on the class of business in which your operations are most closely related. For example, as a landscape contractor, you could be rated as Lawn Services, Landscaping NOC, Plumbing, or even a combination of all three. Each of these class codes have different characteristics, plumbing of course being chosen for any sprinkler work. Sub-contractors are rated separately.
Think about your physical assets and then your operations. Do you have trucks and trailers? How much equipment do you have that needs to be insured? Coverage is provided on your physical property and then the general liability for your ongoing and completed operations. Example: As a landscaper, you build a retaining wall for a client. The wall fails and causes damage to the surrounding area. “Your work” is not covered (the cost to fix the retaining wall) but the cost to fix the damage caused by the failure would be covered.
Understanding your exposures and how to best protect yourself from losses are most important in choosing the right insurance program for your business. I am happy to review your current insurance program and/or help get your insurance program put in place.
About the Advisor
Whitney Smith is a Commercial Insurance broker with Signature Select LLC, an IMA Company. Signature Select specializes in property and casualty insurance, including worker’s compensation and professional liability, for small and mid-sized companies. You can contact her directly: 303.615.7645 www.imacorp.com
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