- National Average: $45 per month (general liability only)
Lawn care businesses help homeowners and commercial clients keep their property looking great through services such as mowing, fertilizing, and weed control. Lawn care companies might also include winter services such as snow plowing or ice removal. In some cases, they may even offer services to remove fungi, pests, and other unwanted intruders from a client’s property. With these services focused on private homes and commercial properties, lawn care businesses are wise to obtain at least general liability insurance to help protect them financially from the cost of an injury, property damage, or other covered loss during the course of business. When starting a lawn care business and planning their expenses, proprietors may want to take into account their insurance costs. The average cost of general liability insurance for lawn care business owners is $45 per month.
However, lawn care businesses may also need other types of coverage, such as workers’ compensation insurance or a commercial auto policy. Each additional policy will increase the overall monthly cost of insurance. As such, an owner’s exact lawn care business insurance cost can vary depending on the type of small-business insurance they require.
While some landscaping companies focus on designing exterior spaces around home or businesses and provide services such as planting greenery, tree trimming, and mulching, some may also offer lawn care services such as mowing, weeding, fertilizing. While lawn care and landscaping services have some overlap, the potential risks involved in each type of business can be different depending on the jobs they take on, which can affect the cost of a business’s insurance coverage.
Factors in Calculating Lawn Care Business Insurance Costs
No two lawn care businesses are exactly the same, and those differences can impact the cost of small-business insurance. Some factors, such as the business’s location, can’t be easily adjusted, but others, such as the coverage amount a business owner needs, can be changed to best meet the needs of the business and the budget. Therefore, business owners will want to keep these cost factors in mind when building out an insurance policy with one of the best small-business insurance companies (top companies include NEXT Insurance and Thimble, among others).
There are several types of coverage for lawn care business owners to choose from, but exact coverage requirements will vary from one business to another. The most common—and often considered essential—type is general liability coverage, which helps protect the business if it is held responsible for property damage or injury to a third party. Other types of coverage include workers’ compensation, tools and equipment, and commercial auto insurance.
As a lawn care business adds services, customers, or employees, its insurance needs may start to change, which may affect the company’s insurance rates if the owner adds or removes coverage options. Smaller businesses with fewer coverage requirements often pay lower insurance premiums than larger businesses. For example, a lawn care business owner who works alone and only has a general liability policy will pay lower rates than a more established business that has high-value lawn care equipment to insure. As the business grows and adds employees, though, the owner may need to add workers’ compensation coverage, which would increase insurance premiums. The business owner may also purchase additional lawn mowers, trimmers, and other equipment and decide tools and equipment coverage is necessary to help pay to replace those assets if they are damaged by a covered loss or stolen. If the business owner wants to insure company-owned vehicles, then they would need to purchase commercial auto insurance, which would further increase their insurance costs.
The coverage amount of a policy, also known as the coverage limit, is the maximum amount the insurance company will pay out on a claim. Limits may be set on a per-incident or per-year basis, and some companies may set both a per-incident and per-yer limit for certain types of coverage. Regardless, the concept remains the same—an insurance company will only pay up to the policy limit for approved claims.
Higher coverage amounts will also come with higher insurance premiums. In addition, insurance companies will likely offer different coverage limits for various types of insurance (general liability, commercial auto, tools and equipment, and so on). It’s a good idea for business owners to keep a close eye on policy limits for each type of coverage they select when they’re getting quotes for their coverage, which will allow them to properly balance their coverage needs with their operating budget.
Types of Lawn Care Services Provided
Insurance companies largely determine pricing for insurance based on their perception of risk, particularly when it comes to the risk of a policyholder filing a claim. Businesses that appear to be more likely to submit a claim will likely pay more for insurance coverage. This is why insurance rates can vary so much across different types of small businesses. For instance, the cost of cleaning business insurance may be higher than a policy insuring a consulting business with only one employee.
In the same vein, the types of services a lawn care business offers can increase perceived risk, which may lead to higher premiums. Businesses that provide winter services such as snow removal, for example, may have increased costs for their lawn care business insurance; this is because employees are working in conditions that increase the risk of an accident. Additionally, a company that offers specialized fertilizer or pesticide applications may pay more for coverage than an organic lawn care company that doesn’t work with chemicals.
Insurance companies often consider a business’s location when calculating insurance rates. In general, businesses operating in areas that present a higher risk of a covered loss face higher insurance costs. For instance, crime rates and natural disaster risks are two location-specific factors that insurance companies may take into account when setting premiums. Higher crime rates in an area could mean that there’s a greater likelihood of insured equipment being stolen, and businesses located in areas at risk for natural disasters, such as mudslides or wildfires, may be more likely to file a claim for damaged tools or vehicles. Under those circumstances, lawn care businesses may pay higher premiums on their small-business insurance.
Past insurance claims made by a lawn care business can have an effect on its insurance premiums. Insurance companies generally view a business with one or more claims in its claims history as a higher risk than those that have never filed an insurance claim. Insurance companies may come to the conclusion that a lawn care business owner is careless or even negligent if they have filed claims for damaged or stolen equipment or have filed even a single liability claim. As such, a lawn care business’s claims history can directly impact the cost of its insurance. For instance, two commercial lawn care companies that have similar insurance profiles may pay different rates if one has filed a workers’ compensation claim in recent years while the other has never needed to submit an insurance claim at all.
Number of Employees
As a lawn care business grows, it may need to hire more employees to keep up with customer demand. However, adding more employees at a lawn care business could increase the cost of insurance for the company, particularly in regard to workers’ compensation coverage. Depending on where they are located, small businesses may be required by state law to obtain workers’ compensation coverage if they have even one employee on staff. Those state-specific requirements can cause a business’s coverage needs to increase as its head count increases.
Insurance companies may also see heightened liability risk in a lawn care business that hires more employees since there could be a greater likelihood of an accident resulting in an injury or property damage. A sole proprietorship with no employees and only the owner working at clients’ homes may present less risk to an insurance company since there are fewer variables to take into account. If the business grows and the owner hires new employees to help provide lawn care services, it could be more difficult to manage individual risks. As such, the owner could see an increase in their liability insurance costs.
Actual Cash Value vs. Replacement Cost Coverage
Lawn care business owners may be able to choose between two methods for how their insurance company calculates the value of covered items when paying out claims for property damage or theft: actual cash value or replacement cost coverage. Actual cash value is the less expensive option of the two and works by calculating the depreciated value of an item to determine the claim payout. On the other hand, replacement cost coverage pays claims based on the cost to replace damaged or stolen items with similar items based on today’s prices. With that in mind, lawn care businesses with replacement cost coverage may receive larger payouts on any claims they file since an insurance company will not account for depreciation when considering the value of covered equipment such as mowers and trimmers. Although replacement cost coverage is more expensive than actual cash value coverage, lawn care businesses may opt for this option so they have less out-of-pocket expense if they need to replace replace damaged or stolen equipment that’s covered under their policy.
Types of Lawn Care Business Insurance
Before a new business owner starts handing out their lawn care business card, they may want to consider getting business insurance to protect their new venture financially. This means figuring out what types of lawn care business insurance are needed to suit their specific requirements. Small-business insurance coverage comprises two main categories: liability coverage and property coverage. Liability coverage refers to insurance that protects the business from liability claims if the business is held responsible for causing an injury or property damage to a third party. Property coverage, on the other hand, insures a business’s possessions, such as lawn care products, equipment, or company-owned vehicles.
General Liability Insurance
A general liability insurance policy can help protect lawn care businesses from the financial fallout of client injuries, property damage to others, and lawsuits against the business. Given the nature of their work, even the best landscaping companies and lawn care businesses can run into liability issues during the course of their work. After an accident the business is responsible for—a customer tripping over a string trimmer left in their yard and breaking their arm, for instance—general liability insurance helps cover the costs of the customer’s medical bills. If a business is responsible for property damage—such as an employee losing control of a riding lawn mower and damaging a client’s garage door—general liability insurance helps pay for any repairs. General liability insurance also covers legal defense costs, so if an injured party decides to sue a lawn care business, this insurance helps pay for legal fees and any settlements.
Workers’ Compensation Insurance
Workers’ compensation insurance helps cover the cost of medical bills and lost wages if an employee is injured on the job. For example, if an employee is unloading a large commercial lawn mower from a trailer and the mower rolls down the ramp and breaks their foot, the employee may be unable to work for several weeks and will also have medical costs associated with the broken foot. The lawn care company’s workers’ compensation insurance helps pay for the worker’s medical bills as well as any lost wages.
The cost of workers’ compensation insurance is typically tied to the payroll for the company. Companies with higher payrolls tend to pay higher insurance rates for coverage since they often have more employees. State laws may require this type of coverage for any lawn care business with one or more employees. In addition, some states may require small businesses to obtain higher amounts of workers’ compensation coverage than others.
Tools and Equipment Insurance
Lawn care equipment, such as mowers, leaf blowers, and string trimmers, can be costly to replace, especially for a business that’s just getting off the ground. A new business owner may not factor in unexpected expenses such as stolen or damaged equipment when estimating their lawn care business start-up costs. Tools and equipment coverage can help lawn care businesses protect their essential assets in the event of a covered loss.
One of the benefits of tools and equipment coverage is that it protects property in a wide variety of situations. For lawn care companies that often move their equipment between jobsites, this coverage can protect against damage or theft whether tools and equipment are at a client’s home or stored in a storage facility. The price of equipment coverage often depends on the coverage limit selected and whether the business chooses actual cash value or replacement cost coverage (when available).
Commercial Property Insurance
Lawn care businesses that own or rent real estate, such as a physical office space, may want to consider commercial property insurance. Commercial property insurance coverage protects a business’s property from covered losses at the place of business. Covered property can include computers, furniture, and lawn care tools and equipment stored on-site. If a fire destroys the lawn care business’s office furniture, for example, a commercial property policy may help cover the cost of replacing it.
Commercial property insurance isn’t necessary in all situations, though. Businesses that don’t own or rent a commercial space will likely benefit more from purchasing tools and equipment coverage instead. For example, a business owner who stores lawn care equipment in a locked trailer at their home will not need commercial property coverage, as tools and equipment coverage will protect their equipment in that scenario.
Commercial Auto Insurance
Since lawn care companies often have their own vehicles to move employees and equipment to jobsites, those vehicles may need to be insured with commercial auto insurance. Commercial auto insurance offers a range of policy options, including liability coverage, collision coverage, and comprehensive coverage, and coverage is based on the policyholder’s needs and budget. Lawn care businesses may be required by law to purchase commercial insurance for any vehicles that are used in support of the business. The cost of commercial auto insurance often takes into account the age and value of the vehicle, coverage options, and the personal driving record, claims history, and age of any driver who will be using the vehicle.
Business Owner’s Policy (BOP)
Owners of lawn care businesses may be able save on their total insurance costs by purchasing a business owner’s policy (BOP). A BOP is a type of commercial insurance policy that combines general liability insurance with commercial property coverage. Many BOPs also include business interruption insurance, which helps cover the company’s recurring costs—such as payroll—if a covered loss forces the business to close temporarily. A BOP can be a worthwhile purchase for many small-business owners, and some insurance companies give business owners the option to completely customize their policy with additional coverage options and expanded coverage limits.
Do I need lawn care business insurance?
Lawn care business insurance helps business owners protect their investment and all the time, money, and effort they’ve put into their operation. As such, it’s often a good idea for lawn care businesses to purchase insurance coverage of some kind, even if it’s only general liability insurance. Business owners may want to carefully consider the cost of worst-case scenarios to determine how much and what kind of insurance they need. For example, if a company-owned truck loaded with equipment were stolen, would the business owner have the means to replace everything out of pocket? With that in mind, lawn care business owners may find that the benefits of insurance are worth the cost. In other cases, a lawn care business may be required to carry specific forms of insurance to comply with state laws or to satisfy clients.
State laws can require lawn care businesses to carry a certain amount and type of insurance. In particular, businesses that have one or more employees may need to purchase workers’ compensation insurance to meet state requirements. Not all states have such requirements in place, but most do. In addition, states may set specific coverage amounts that businesses need to purchase, which can vary depending on the number of employees. Commercial auto insurance is another type of insurance lawn care businesses are often required to carry, especially those that own vehicles that are used to transport equipment and employees to jobsites. Because such requirements can vary from state to state, it’s important for small-business owners to verify what types of insurance they are legally obligated to carry in their particular location.
Customers may require a lawn care business to show proof of insurance before hiring it to mow their lawn, apply lawn treatments, or provide other services. A particular concern in this regard is general liability insurance, since some customers may want to be certain that any lawn care business they hire has coverage to pay for property damage or injuries that occur while the business is working on their property. It’s especially common for commercial clients, such as condo complexes, corporate campuses, and schools, to have specific insurance requirements for a lawn care business.
Even when a client doesn’t require proof of insurance, having adequate insurance coverage can help set a lawn care business apart from uninsured competitors. Businesses that purchase an insurance policy are not only protected against covered losses, but they may also have a competitive advantage over lawn care services that are uninsured, which could help them land new clients.
Business Property Protection
Lawn care business owners want to do everything they can to protect the tools, equipment, and other assets that are critical to their operations. If a mower is stolen from storage or a trailer breaks down, the business won’t be able to run at full capacity, and it may need to scale back work until those items are replaced. Insurance that protects business property, such as tools and equipment coverage, puts financial safeguards in place in case of an unexpected loss resulting from a covered event such as fire or theft. Commercial auto insurance can also protect lawn care businesses that use company-owned vehicles in the course of their day-to-day operations. Business owners who are concerned about paying out of pocket to repair or replace assets in a worst-case scenario may want to purchase several different types of insurance to fully protect their property.
Business Liability Protection
The cost of a lawsuit that arises from an accident could potentially ruin a small lawn care business. Lawn care businesses rely on potentially dangerous equipment that could cause injuries or property damage if employees aren’t careful. For example, if a customer manages to cut themselves on a hedger or trimmer that’s lying in the grass, they could sue the lawn care business and hold it liable for medical bills and other damages. A small-business owner may not be able to afford such unexpected costs without the help of liability coverage, which could potentially even lead to bankruptcy. With general liability insurance, however, the lawn care business owner’s policy can help cover the cost of any damages in addition to any legal fees they might need to pay.
How to Save Money on Lawn Care Business Insurance
While it’s not recommended to cut corners on insurance simply to save money, there may be opportunities for lawn care business owners to lower their insurance costs while still getting the coverage they need. As suggested by the Insurance Information Institute, the following tips can help business owners save money on the cost of lawn care business insurance.
- Shop around: Lawn care business owners can seek out the best coverage at a reasonable price by requesting insurance quotes from multiple carriers or by working with an insurance broker to compare prices.
- Bundle insurance: Purchasing a bundled policy is a viable way to lower the cost of lawn care business insurance.
- Raise the deductible: A higher deductible—the amount deducted from the payout on a claim before funds are disbursed to the policyholder—generally results in lower insurance rates.
Questions to Ask About Lawn Care Business Insurance
The cost of business insurance is often a top concern for lawn care business owners when they’re shopping for coverage. In addition, other factors and considerations can come into play for business owners when they’re looking for the right policies for their businesses. Before committing to a policy, lawn care business owners may want to sit down with an insurance agent and ask a few key questions, including:
- Does the insurance company have experience working with lawn care businesses, and does it understand the potential industry risks that can be addressed through insurance?
- How much coverage do I need? What types of small-business policies make the most sense for my lawn care operation?
- Is the insurance company willing to work with me to customize my coverage to fit my business’s budget and insurance requirements?
- Are there any discounts available for commercial insurance policies that can help lower the cost of a policy?
The right insurance coverage could be essential to protect and maintain a successful lawn care business due to the nature of the job. With expensive and dangerous equipment used regularly, lawn care business owners will likely want to talk with an insurance agent to figure out the right type of coverage for their business. Agents and other resources can help answer any questions the business owner may have about lawn care business insurance and the cost of getting coverage. Even before reaching out to an insurance provider, small-business owners may want to consider some of the common questions regarding this type of coverage so they are more informed as they begin their search for the best insurance for lawn care businesses.
Q. Is lawn care business insurance required by the law?
Many states require any business with one or more employees to carry workers’ compensation insurance. In addition, businesses with company-owned vehicles may need to purchase commercial auto coverage. Other forms of lawn care business insurance, such as general liability and tools and equipment insurance, may not be legally required, but they could still be a good idea to purchase in order to financially protect the business from unexpected losses. With that in mind, as proprietors are getting their lawn care business off the ground, setting prices based on lawn care costs, and landing their first customers, they may want to consider some form of business insurance.
Q. What does lawn care business insurance cover?
Lawn care business insurance can cover a wide variety of losses and scenarios, depending on the type of policy purchased. General liability policies, for instance, cover the costs of damages to a third party that the business is found liable for, such as any client injuries or instances of property damage that occur while the business is working on a jobsite.
Q. What does lawn care business insurance not cover?
Coverage limitations depend on the type of lawn care business insurance. General liability insurance, for instance, typically will not pay for an employee’s medical bills if they are injured on the job; workers’ compensation coverage will, though. Insurance companies may set their own exclusions that lawn care business owners should be aware of. For example, tools and equipment insurance coverage may not extend to borrowed items.
Q. How long does it take to get lawn care business insurance?
Depending on the insurance agent or insurance company the lawn care business owner chooses, it may be possible to get insurance coverage the same day they request a quote.
Q. Can I get a lawn care business insurance quote for free?
Most insurance carriers and agents are happy to provide free business insurance quotes for lawn care businesses. In most cases, the business owner simply needs to fill out an online form or call their local insurance agent for more information.
Q. Can I have one lawn care business insurance policy for multiple businesses?
For business owners who run more than one lawn care business offering similar services, the answer could be yes. Proprietors with separate businesses that each provide a distinct service, such as lawn mowing and snow removal, may have to create separate entities for each business, with each requiring its own insurance policy. It’s best for business owners to talk with a trusted insurance agent to better understand their insurance options.
Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.