Rising insurance costs will continue to challenge landscape businesses in 2025, but proactive risk management offers a path to help control premiums.
Drew Garcia, vice president of Rancho Mesa Insurance Services and Landscape Group Leader, says commercial auto, general liability and umbrella are three of the four major casualty insurance lines that are under pressure.
He anticipates a 10 to 15% rate increase on auto premiums but notes each company’s rate will look different based on their own loss history, operations and where you operate. If you are in commercial maintenance, which is generally ‘fleet heavy’ you have almost become more of an auto risk than a landscaping risk to the insurance carrier.
“When you’re running 70+ power units, that becomes more of the concerning exposure because that’s where severity is going to come from, a bad auto accident,” Garcia says. “For that reason, it’s really eliminated so many different carriers from even having an appetite for landscape.”
Garcia says there have been cases of non-renewals where carriers simply choose to no longer underwrite certain companies.
Auto rates are also increasing as carriers try to catch up to large bodily injury claims and increased repair costs.
Garcia says that insurance carriers are interested in landscape companies using telematics because they want to know what protocols and procedures are in place to help minimize accidents.
“Investing in telematics or in dashcams are favorable opportunities for any company to improve their fleet and driver safety program,” Garcia says. “However, if you are not managing and training to the data, then you’re not fully utilizing the technology.”
He says it can cause more issues if you’re getting alerts for unsafe driver behaviors but fail to address them, as it can appear as willful negligence.
Garcia estimates a 6 to 8% increase in general liability and umbrella insurance will increase as a result of higher underlying general liability and auto premiums.
For businesses that own property in natural disaster-prone areas, whether it be wildfires or hurricanes, Garcia anticipates it will be increasingly challenging to find coverage, and if you find it, it will be very expensive.
“I think if you’re in one of those areas, there’s just going to be continued scrutiny on who’s willing to underwrite this, and then probably some imposed deductibles by the carrier to share in the risk,” Garcia says.
The workers’ comp market is still relatively soft, meaning carriers have been profitable on this line.
“We are seeing a slowing down on work comp,” Garcia says. “It’s still a preferred line of business to the carriers, but pricing seems to be near or approaching the bottom.”
“If work comp starts to tick up, it looks like it would be a gradual approach,” Garcia says. “I think carriers are out ahead of it, and they’re just using good underwriting judgment to kind of slow things down. Then ultimately, we’ll probably start to see a little bit of rate increase come in the next couple years.”
Garcia says he’s seen workers’ comp claims trending downward in both frequency and lost time claims, indicating the landscape industry is doing well in terms of safety training and safety preparation.
If you are considering providing new service offerings to create additional revenue streams, Garcia encourages running the idea past your insurance carrier first.
“It might seem incidental to a company if they say we’re going to take on holiday lighting, or we’re going to do snow removal now during the winter, and it might sound very practical and easy to do, but those are things that you need to run through your insurance carrier first to make sure they’re aware of the exposure because prior to that, this type of work was not considered for your business,” Garcia says.
Failing to do so could result in an incident where you potentially have no coverage because the carrier had no prior knowledge of the operations.
Garcia recommends explaining the proof of concept to your insurance carrier so they know how much thought has gone into the new service offering already.
“Listing out the operations and your plans to train, reduce or avoid risk on the upfront can help speed up the carrier’s feedback,” Garcia says.
Letting your carrier know what the future looks like and if anything has changed in the business can help eliminate surprises.
“Other than a direct change in operations, we continue to see consolidation in all forms across the country,” Garcia says. “If you are considering a strategic merger or acquisition, work with your insurance professional to help support you before a deal is struck.”
It can be easy to only think about your insurance policy when it’s about to renew in a month; however, with an unpredictable insurance market, allowing enough time to handle a renewal is important. Aim to reach out to your carrier 90 – 120 days before policies expire.
At the end of the day, there are no tips or tricks to drive insurance rates down. It all depends on performance and the condition of the market.
Key Takeaways
- Commercial auto, general liability and umbrella insurance rates are all expected to see moderate increases.
- Before adding services like holiday lighting or snow removal, businesses should consult their insurance carriers. Lack of prior notification can lead to coverage issues during incidents.
- Regular communication with insurance providers, particularly before renewal periods or business expansions, helps align strategic goals with coverage needs and avoids surprises.
