Landscaping insurance can offer financial protection in a number of situations. For example, if you accidentally damage a client's property or your tools are stolen, your business insurance can help you out of these costly conundrums.
Though business insurance is versatile, it's not a blank check. It has its limits and exclusions (i.e., events and circumstances it can't cover). For example, the Times-Herald News reports on a landscaping contractor who was charged with 34 criminal charges, including 10 felonies, after scamming a number of customers out of their deposits.
Let's use this real-life example to illustrate a few things that your landscaping insurance definitely won't cover.
1. Operating without a contracting license.
In the case referenced above, the charged contractor was allegedly working without a contractor's license. Indeed, in many states or municipalities, landscapers need to be licensed in order to legally operate.
But failing to be licensed doesn't just put you at risk of arrest, imprisonment, and fines if you choose to keep working. It also usually means that your insurance policy won't cover you any claims that happened while you were unlicensed.
Think of it this way: if the insurance company is under the belief that you're a licensed landscaper when you're really not, then you're violating their trust. According to the insurance policy you signed, they can exclude you from coverage. Most insurance companies won't insure unlicensed contractors in the first place unless it's legal for the contractor to work without a license in their jurisdiction.
Know the laws in your area and have the proper licensure to ensure you can collect insurance benefits when you need them.
2. Operating without proper Workers' Comp Insurance.
Among the many charges filed against the California landscaper was failure to carry Workers' Compensation Insurance. As it turns out, nearly every state requires you to carry this insurance if you have employees. Again, this is a matter of knowing local laws and abiding by them.
If you're required to carry this insurance but you don't have it, your other insurance policies could exclude you from coverage. And if one of your workers is injured on the job, that worker is likely entitled to sue your business because you don't have Workers' Comp to cover their medical expenses.
Check out insureon's guide to Workers' Compensation Laws by State to learn about your state's requirements.
3. Defrauding customers.
Don't be the person we write our next cautionary blog post about. Defrauding customers is a major crime, and in addition to being an unethical thing to do, it makes you ineligible for insurance coverage.
Be aware that taking too big a down payment may be illegal in many situations. For example, in the case above, the law only permits a maximum deposit of 10 percent of the total project cost.
If you engage in good business practices and operate your business within the law, your insurance policies can provide the coverage they're meant to provide. Know their limits and exclusions so you know what your policies can and can't cover.