How to conduct an insurance checkup

Dan Lyster will probably never forget the moment he realized his insurance coverage was lacking ­— when the remnants of Hurricane Ida flooded his Downingtown, Pa., business. Ida dumped more than 10 inches of rainfall on Downingtown within hours in early September.

When flooding hit Dan Lyster’s business, more than 250 bags of turf seed were ruined. (Photo: Dan Lyster)

Lyster said he moved some turf seed from an early purchase program and other items in his shop up on higher shelves to prevent losses, but it didn’t work. Floodwaters ruined his inventory of more than 250 bags of seed.

His business, DTL Total Turf Care, had about $8,900 in coverage for miscellaneous office items, including inventory. Lyster estimates it would cost him more than $50,000 to replace the lost turf seed and equipment damaged from flooding.

“I had an assumption that I had insurance, that I was covered,” he says. “I’m the kind of business owner who’s just go-go-go. So, when the insurance renewal papers came in, I just threw them on my desk and didn’t think about them.”

Losing an entire inventory of products is a tough lesson to learn, but he says he’s covered for incidentals now. He encourages contractors to take the time now to look at insurance policies to ensure proper coverage.

To help prevent you from making a similar mistake, Will Allen, founder of Green Industry Captive, a captive insurance provider and a principal at Allen Insurance Group, and brothers Drew Garcia, vice president for Rancho Mesa’s landscape group, and Greg Garcia, account executive for Rancho Mesa’s landscape group, share ways contractors can ensure proper insurance coverage.

Work with a knowledgeable insurance agent. It’s critical for those in the green industry to work with an insurance agent with experience in the lawn care or landscape industry. Greg Garcia says there are a lot of nuances and an agent with knowledge of the green industry will help ensure you’re covered.

Know the make-or-break parts of your policy. Allen says you should know and identify some key parts of coverage to check on.

“That’s things as simple as making sure the name of your business is right, as well as any other entities that you’re operating under,” he says. “That’s really where you can tell how detail-oriented an agency is.”

Perform policy checkups yearly at least. Drew and Greg Garcia say it’s good to evaluate your policy with your agent 90 or 120 days before renewal. Especially if you’ve added or removed services. Your agent can help you determine whether to stick with the policy you have or shop for a new one for your business.

“You hear a lot of landscape professionals who are frustrated with last-minute insurance renewals and decisions,” Drew Garcia says. “Having a ‘pre-renewal’ meeting 90 to 120 days in advance of your policy effective date can just about eliminate this pain.”

The Garcias say you should think of your policy as fluid and update your agent with any changes to your business such as adding or selling equipment, buildings or changes in services offered.

Know your appetite for risk. Drew and Greg Garcia say there’s no one-size-fits-all policy for the green industry. Finding the ideal coverage for your business is about the amount of risk you as an owner are willing to take.

“Maybe they’ve gone 10 or 12 years with minimal loss history which proves strong risk control and now opens up the possibility to explore some performance-based insurance products,” Drew Garcia says.

Look at alternatives. Allen says captive insurance may be an economic and practical insurance coverage option. A group of companies comes together to form its own insurance company in group captive insurance. The group takes on the risk that the insurance company typically shoulders. While this has typically been available to larger companies, there are options for landscape and snow removal businesses that lowers the premium threshold to $75,000.

“From a 30,000-foot view, what a captive insurance program does is it allows businesses that are not having many losses to get a large portion of their premiums back each year,” he says. “With our Green Industry Captive program, it ends up cutting your annual net insurance cost by around 30 to 40 percent.”