8 Things Landscapers Should Know Before Buying Landscaping Workers' Comp
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Landscaping workers’ comp covers medical expenses, rehabilitation costs, and lost wages for employees suffering from work-related illnesses or injuries. This protection not only ensures the well-being of your staff but also safeguards your business against financial losses arising from workplace accidents.
Before you jump in and buy landscaping workers’ comp, you need to consider rates, coverage, classifications, and so much more. This guide will delve into the eight factors all landscapers should be aware of before purchasing insurance:
1. Landscaping Workers’ Comp Class Codes
Workers’ compensation insurance uses class codes to differentiate between various types of work, each with its own level of risk. These codes help insurers assess the potential for workplace injuries or illnesses and set the right rates.
For landscaping businesses, navigating these classifications is important because the nature of the work varies widely, from routine lawn care to more complex hardscaping projects.
Understanding the specific class codes relevant to your business—such as those for general lawn care and broader landscaping services—is important to make sure you're not only properly insured but also paying rates that reflect the actual risks your employees face.
Lawn Care Only - Class Code 9102
If you own a business that only handles specific lawn maintenance tasks, such as mowing, trimming, and edging, your company is a true “mow and blow” operation and falls under class code 9102. However, this is only true in situations where these are all the services you provide.
If you do things like hardscaping and planting, your operations will not fall under this umbrella.
Landscaping - Class Code 0042
The other landscaping workers’ comp class code to be aware of is 0042. This classification encompasses a larger number of services, including tree planting, flower bed installation, and limited hardscaping projects, like laying soil or pavers.
When your business starts to expand beyond lawn care, it will often transition into this classification.
While these are the two main classification codes for lawn care, that doesn’t mean they are the only ones. Some of the tasks you take care of might have special codes associated with them. (As an example, off-the-ground tree trimming or tree removal has its own classification - Class Code 0106)
2. Landscaping Workers’ Comp Rate
The average rate for landscapers workers’ comp is $6 per $100 of payroll. However, your exact rate is influenced by several factors including the geographical location of your operations, the kind of work that you do, and the underwriting criteria used by your insurance provider.
Instead of relying on these numbers, it’s best to look for custom quotes that consider your business’s unique characteristics. Accurate quotes will be tailored to your company, giving you comprehensive coverage without paying too much.
3. Landscaping Workers’ Comp Costs
Most landscaping businesses pay an average of $230 per month for workers’ comp insurance. This estimate is based on an average annual payroll of $50,000. However, that figure is only a starting point. To determine your landscaping business workers’ comp cost, you need to look at the specifics of your expenses.
For example, the risk profile of your business and how large your payroll is will have a huge impact on costs. Doing a full evaluation will give you great insight into what your expenses might be, which lets you more accurately plan your finances and budget for the future.
4. Seasonal Considerations
Some landscaping businesses offer other services during the off-season, like snow removal. This presents unique insurance challenges.
Some insurers may refuse to cover snow removal operations, some may only allow working in parking lots, or exclude contracts with townships. In contrast, others might be ok with a policy switch to cover snow removal during the winter season.
By proactively addressing these seasonal difficulties with your insurance provider, you can discover specialized endorsements or policy adjustments that ensure comprehensive coverage throughout the year.
5. Pay-As-You-Go Workers’ Comp
Choosing the pay-as-you-go option provides a great deal of flexibility and tends to work well for the needs of seasonal landscapers. Your insurance costs are calculated every month based on your actual payroll.
Unlike a typical premium plan, pay-as-you-go lets you fluctuate your payments so that during active periods of business when you have more employees, you pay more. When it’s slower, such as during the off-season, your insurance payment will be lower, so you worry less about finances when things are a bit tight.
Plus, pay-as-you-go is useful for anyone who has on and off workloads. It doesn’t have to be solely based on seasons. It can also be good for those with project-based contracts. You can adjust your insurance payments, so you pay only for coverage when you need it.
Exploring this payment option can create better financial stability, improved flexibility, and expanded cash flow management no matter what market conditions happen to be like.
6. Subcontractors and 1099s in Landscaping
When it comes to landscaping workers’ comp, subcontracting is very common. It’s a way for businesses to enjoy more flexibility when handling projects. At the same time, bringing on subcontractors creates more insurance considerations.
It’s important to be sure that subcontractors have their own workers’ compensation insurance coverage. This adds additional protection and helps you avoid liabilities if injuries or accidents occur on the job.
If the subcontractors do not have insurance coverage, things get complex. There are financial and legal consequences to be aware of.
To avoid risks, landscaping businesses must treat any uninsured subcontractors as employees regarding coverage. This means you need to add them to your policy and pay what is required for that.
7. Workers’ Comp Code for Landscape Office Workers
For landscaping companies dealing with workers' comp insurance, separating office workers from field workers can save you money.
When you classify your office team under the right code (Code 8810), you're not just following rules; you're also getting lower insurance costs because office jobs are less risky than outdoor work. This means your insurance company will see you as a lower risk, which can lower your payments.
8. Acceptable Workers’ Comp Limits for Landscapers
For anyone in the landscaping business that might be subcontracted by others, it's wise to set your employer's liability limits at $1,000,000 right from the start. Even if it seems unnecessary initially, chances are you'll need it.
Often, when you're contracted by larger landscaping firms or property management companies, they'll require these higher limits. Opting for this level of coverage adds only a minimal amount to your premium.
While lower limits might be permissible, they're generally not recommended due to the expectations and requirements you'll likely encounter in the industry.
Get your Landscaping Workers' Comp Quote Today!
Ensure your team's safety and compliance by securing the right workers' comp insurance tailored to your unique needs. Don't leave your business exposed to unforeseen risks.
Click here to get an instant quote and set your landscaping business up for success.
Note: The information provided in this blog is intended for general informational purposes only and is not a substitute for professional legal or insurance advice. Laws and regulations regarding workers' compensation insurance are complex and vary by state and by specific circumstances. Therefore, readers are encouraged to consult with a qualified legal or insurance professional to obtain advice with respect to any particular issue or problem they might have.
Mordechai Kamenetsky, co-founder and lead agent of Kickstand, is recognized as an expert in workers' compensation. He is passionate about helping small businesses manage risks and lower their workers' comp costs. In his articles, he educates readers and clients on the intricacies of workers' comp insurance.
Workers' compensation is an essential part of any business. What makes it challenging is that the payment structure requires an up-front payment based on projections, with any remaining balance due at the audit.
