Managing risk as a landscaper is about more than just having the right insurance. Physical injury and the proper handling of chemicals, such as fertilisers and sprays must be managed, for example by having good training and procedures in place. The same applies when it comes to managing relationships with customers. Written contracts are essential to avoid misunderstandings and provide a written basis for the agreed scope of work and managing any disputes. This includes making sure that variations are also agreed in writing. These are just a few examples of hazards that need to be managed as part of a broader risk management plan, which may also include having the right insurance cover in place.
Insurance Essentials for Landscapers
This covers your liability for accidental damage to someone else’s property. For example, concrete splashes staining existing cladding or joinery, or heavy equipment (while being used for its specialised purpose, not while being driven) damaging existing concrete paths and retaining.
One common pitfall to be aware of is hitting underground services when digging holes or trenches. This is covered, usually with a higher excess, but only if the appropriate measures were taken to identify the location of any services prior to digging. This may include needing to manually dig rather than using an excavator if working near such services.
Pools are another area that need to be managed very carefully, as insurance may not cover liability issues related to their construction.
Damage by Vehicles & Heavy Machinery
Damage to other people’s property caused by your vehicle is covered under the vehicle’s insurance, not public liability. This also applies to any items of equipment or heavy machinery that are mechanically propelled and insured as vehicles.
It is not uncommon for neighbours to complain of cracks in their houses, paths or driveways because of the operation of heavy machinery at the next door property. It’s a good idea to visit neighbours before this work starts and to get lots of photographic evidence of the condition of existing property before commencing operation.
This covers your liability for fines & penalties imposed under legislation. Most commonly this relates to prosecutions under Health & Safety legislation. This could relate to inadequately fenced retaining walls or decks or other potentially hazardous areas of the site. While the actual fine in this cases can’t be insured, the policy covers legal defence costs and any reparations awarded to an injured party.
Another issue is the improper disposal of waste or contaminated site run off that enters a local waterway. These are a breach of the Resource Management Act, with associated heavy fines.
Employers Liability & Employment Disputes Liability
A landscaping business is no different from any other in respect of its obligations to employees. Allegations of unfair dismissal, harassment and bullying are increasing. The cost of defending these claims to the Employment Relations Authority, including any compensation awarded, can be insured. The same goes for claims of mental illness, anxiety, depression and stress brought on by the job. For workers exposed for long periods to the sun the risk of melanoma increases and this is not covered by ACC. The business could be liable if it has not adequately managed this risk for staff, such as the provision of the appropriate PPE, hats, long sleeves, sunscreen etc.
Contract Works Insurance
This covers accidental damage or loss to building work, including by theft, storm, subsidence or flood. Often not even considered by landscapers, if this cover hasn’t been arranged and there is damage to the works under construction a substantial loss may have to be borne by the landscaper. Often, if the work involves an existing structure, such as the addition of a deck, fencing or landscaping around a house, this cover should be arranged by the building owner with their current insurer. It is a good idea for the landscaper to ensure that this has been done, which will avoid any problems later if it hasn’t been and there is an issue. It should be a standard condition of your contract for this cover to be arranged.
If the contract involves standalone work, such as a sleepout or a freestanding deck, pergola or substantial retaining works, the landscaper may be able to arrange the cover separately.
If your role includes landscape design then consider professional indemnity insurance. This covers liability for errors in the design that require the client to be compensated for their loss. For instance, encroaching on neighbouring property boundaries or errors in the calculations for finished floor levels or other cut depths when excavating.
Vehicles, trailers, tools & equipment
Insuring your assets for damage or theft is also a consideration. Most commercial vehicle policies are based on their market value at the time of the loss. Some will pay the lesser of the sum insured on the policy or a valuation obtained by the insurer at the time the vehicle is written off or stolen. Others will pay the market value regardless of the sum insured on the policy. You can also get an “agreed value” policy, which pays the sum insured stated on the policy. However, some insurers still have limitations if that value exceeds the market value by a certain amount.
Trailers should be insured as vehicles (since the have to be road registered). These are a popular target for theft, so should be secured with wheel and/or towbar locks and perhaps even GPS tracking.
Tools & equipment for landscapers are generally best insured as “mobile business assets”, which will insure them for their full replacement (new for old) value. This can cover strimmers, power tools and other equipment used to perform your job. Anything mechanically or electrically propelled should be covered on a vehicle policy.
Income Protection, Trauma
Most of us rely on our own efforts to earn an income. If we get injured ACC should replace income until we are able to get back to work. However, experiences with ACC are extremely mixed and they typically only pay 80% of the assessed pre-injury income. For contractors, where income can fluctuate, this can be a problem. ACC also doesn’t cover non-accident illness, such as cancer, depression, kidney failure etc. Income protection insurance assists in these situations
In a nutshell
Managing risk is critical to any business, but particularly those that are operating in proximity to other people’s property, where the risk of damage is greater. Make sure you have a proper risk assessment plan and the right measures, including insurance, to reduce risk.