Closing the Installation Floater Coverage Gap for Landscape Contractors

Author, Drew Garcia, Vice President, Landscape Group, Rancho Mesa Insurance Services, Inc.

Landscape contractors have varying levels of exposure when it comes to installation projects. However, they virtually all share the same common coverage gap for trees, plants, shrubs, and lawns. 

An installation floater covers property being installed by a contractor. For landscapers, this could be a number of different items depending on the scope of work: irrigation systems, hardscape, low voltage lighting, and plant material to name a few. Most installation floaters will exclude plants, trees, shrubs, and lawns within the policy under “property not covered.” 

The property being installed is generally insured under a few different scenarios. Temporary storage at the yard, at the jobsite, in transit, and installation at the jobsite. Common losses include fire, theft, and accidental damage.

The obvious concern is a scenario in which plant material is damaged or stolen and the insurance policy denies the claim due to the common exclusion. 

When considering the limit for your installation floater, you will want to estimate your average job value for material cost and labor cost to install the product. You will also need to know if the policy is written on blanket coverage or scheduled location. If a project comes up that is out of the ordinary, you can always increase the limit for that specific project by engaging your insurance provider in advance of take-off.

The cost of plant material and labor changes each year. The broker price index for the nursery, garden, and farm supply stores has increased by about 43% since 2019. Wage inflation has continued to drive payroll cost. Be sure to re-evaluate your exposure and ensure that plants, trees, shrubs, and lawns are covered for your installation exposure by working with your insurance professional and carrier to remove the exclusion completely, or amend the limit to provide a max dollar amount per tree, plant, shrub, or lawn being installed.

To discuss this coverage or review your current policy, contact Drew Garcia at (619) 0200 or drewgarcia@ranchomesa.com.

COVID-19 Business Shutdown: What Coverage Gaps Exist with Vacant Properties

Author, Daniel Frazee, Executive Vice President, Rancho Mesa Insurance Services, Inc.

In response to the COVID-19 pandemic and ensuing shelter in place restrictions, many non-essential businesses have been shuttered for several weeks. As those businesses deal with the massive revenue and employee losses, building owners must be cautioned to review their property policies closely for vacancy provisions and exclusions.

Vacancy clauses can create exceptions from coverage if the property in question is vacated or unoccupied for a defined period of time (most often 60 days but often shorter). For example, there are some policies that will not provide coverage if a property sits vacant more than that fixed number of days but applies to only certain types of losses like vandalism, theft, or water damage. Additional limitations can include a reduction of losses by 15% or more for more typical covered causes of loss like a building fire and certain losses can be excluded altogether once a property is vacated depending on the insurance company’s form. Finally, there are still other policies that will, in fact, provide coverage for any types of losses but stipulate that the policyholder must inform them that the property has been vacated.

What qualifies as vacant or unoccupied? Some policies define these very specifically while others are broad and ambiguous, offering little comfort at the time of loss. Rather than wait until after a loss when coverage might still be in jeopardy, take the initiative now to contact your broker if your property is vacant or partially occupied as a result of the COVID-19 pandemic. Communicating with the insurance company will help clarify definitions and interpretations and allow you to plan appropriately for the potential of a property loss.

While this continues to be an unprecedented time, several insurance companies are now sending notices to policyholders that they will not consider a building to be vacant for the days during any period of occupancy that changed as a result of the government stay-at-home order or similar directive to COVID-19. Take time now to review your policies with your broker, learn more about your specific vacancy provision and whether your insurance carrier will waive some or all of this provision during this window of time.

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