Business General Liability Insurance

[Dougster]

For those folks out there in a seasonal landscaping or tractor services business: Do you keep your business general liability policy in effect all year round or do you cancel it at the end of the fall clean-up season and ride through the winter without coverage... recognizing that if you plow or do other winter work that you might want or need it there anyway. Seems there is a lot of money to be saved by dropping it during the completely inactive months... but I'm not sure how badly that's frowned upon by the insurers. In my case, it sure would save a bundle... but I'd want to make sure I could secure it again come the next spring! I don't really need my general liability coverage for snowplowing as that is supposedly already well-covered by my truck policy. In fact, as currently written, I don't believe that my business general liability policy would pay a red cent for any snowplowing-related claim... unless maybe I was using my tractor at the time!

I always drop my Harley insurance for the winter months with no problems at all. It's expected. On the other hand, I keep my car insurance in effect all year long even though I don't drive one car from December through late-March. But maybe liability coverage is inherently different because you never know when someone will decide to sue? And if they decide to sue you after you have cancelled the policy for the year, are you still covered for any earlier incidents? Maybe continuity of coverage is more critical?

I hate to bring this up with my agent without knowing what is common practice. What do you folks do about off-season liability insurance coverage? Keep it in effect? Or dump it and save the premiums?

Dougster

 

[8561]

You need to keep it active. Most primary market insurers won't write a guy who has dropped his insurance, unless there is good reason. Good reason would be something like an injury that forced you to stop work or if you decided to discontinue your business to go to work for someone else. Your GL policy rate has some "slowdown" months built into the premium because they know a landscaper in Mass won't likely be doing much through the 3 hard winter months. If you drop each winter, the primary market won't continue to write you, which will force you into surplus lines. If you think you're paying now (assuming you're not in surplus currently), try getting a surplus lines quote after you've cancelled.

To answer your second question, most policies are written on an "occurrence" basis. This means if there was coverage in place at the time of the incident, there will be coverage available. Check on your declarations page to see if your policy is "occurrence" based or "claims made" based. I'm betting on occurence.

 

[8561]

By the way, relative to your Harley, I hope for your sake you keep Comprehensive (essentially fire and theft) on it during the winter months. Comp is so cheap it's not worth dropping. I'm a rider too, and my policy on my Ducati is built so that I am fully covered March 1 through Nov 30 and it automatically drops back to comp only the other 3 months. I pay one premium based on these parameters. Its great, I never have to remember to call, and if my first spring ride is on a weekend, I don't have to plan for it in advance because I know the coverage is already activated.

 

[Dougster]

You need to keep it active. Most primary market insurers won't write a guy who has dropped his insurance, unless there is good reason. Good reason would be something like an injury that forced you to stop work or if you decided to discontinue your business to go to work for someone else. Your GL policy rate has some "slowdown" months built into the premium because they know a landscaper in Mass won't likely be doing much through the 3 hard winter months. If you drop each winter, the primary market won't continue to write you, which will force you into surplus lines. If you think you're paying now (assuming you're not in surplus currently), try getting a surplus lines quote after you've cancelled.
To answer your second question, most policies are written on an "occurrence" basis. This means if there was coverage in place at the time of the incident, there will be coverage available. Check on your declarations page to see if your policy is "occurrence" based or "claims made" based. I'm betting on occurence.

Excellent Tim... Thank you! Exactly the info and advice I was looking for! In effect, I am getting 7 or 8 months of *real* tractor & backhoe liability coverage spread over 12 monthly payments. I didn't dare ask my agent for fear of his reaction... and now I'm glad I didn't!

Dougster

 

[Dougster]

By the way, relative to your Harley, I hope for your sake you keep Comprehensive (essentially fire and theft) on it during the winter months. Comp is so cheap it's not worth dropping. I'm a rider too, and my policy on my Ducati is built so that I am fully covered March 1 through Nov 30 and it automatically drops back to comp only the other 3 months. I pay one premium based on these parameters. Its great, I never have to remember to call, and if my first spring ride is on a weekend, I don't have to plan for it in advance because I know the coverage is already activated.

I wish we could do that here in Taxachusetts. To the best of my knowledge, we can't. If that option was readily available, I'd use it on BOTH my Harley and the Vette... and probably break even cost-wise with better overall coverage.

Remember... You live in a sane and practical state. I live in the People's Republic. Big differences in vehicle insurance!

Dougster

 

[8561]

No problem, anytime. You guys have got to get your auto market under control. Romney had it headed in the right direction and Patrick is putting you right back where you started. My 9 month/3 month motorcycle policy on my Ducati is Progressive. Progressive only has two states they won't write one in, MASS and Washington DC. If that doesn't tell you your market is screwed up, I don't know what will. Good luck with your landscape business.

 

[Dougster]

No problem, anytime. You guys have got to get your auto market under control. Romney had it headed in the right direction and Patrick is putting you right back where you started. My 9 month/3 month motorcycle policy on my Ducati is Progressive. Progressive only has two states they won't write one in, MASS and Washington DC. If that doesn't tell you your market is screwed up, I don't know what will. Good luck with your landscape business.

Romney was a good man... our first completely honest & honorable governor in my lifetime. You don't want to know what I think of Mr. Patrick. Yes, Massachusetts is quite a state when it comes to insurance in general and vehicle insurance in particular. So much fraud and so many unlicensed, uninsured drivers it's insane. It's too bad you aren't here in Massachusetts because I've got 100 other insurance-related questions I would have loved to ask you!

Actually, be darn glad you aren't from down here!!!

Dougster

 

[Jstpssng]

One big difference between Mass and NH is called "No Fault insurance"... when I worked as a subcontractor I had no problem working in ME,NH, & VT; but my GL insurance increased 700% when I said I was working in NY. (Also a no-fault state.)

 

[Dougster]

One big difference between Mass and NH is called "No Fault insurance"... when I worked as a subcontractor I had no problem working in ME,NH, & VT; but my GL insurance increased 700% when I said I was working in NY. (Also a no-fault state.)

Yeah, my business & vehicle insurance are certainly not cheap... but the bigger question is: "Am I really covered for ALL of the different services I provide?" I am still not convinced of that... which is why I sometimes don't sleep so well at night. The insurance folks always want to plunk you down in one service category... but what if your work includes far MORE than in your "best fit" category? I've been told not to worry... but I still have my doubts.

Dougster

 

[8561]

They put you in a service category in an effort to rate you as correctly (sometimes incorrectly) as possible. Its a method to set your premium, generally not an effort to exclude coverage. The most important thing is to be honest with your agent, and if you're the least bit uncomfortable, put it in writing. Agents carry errors and omissions policies to help cover if they screw up your coverage. That's an oversimplification, and of course it's more complicated than that, but that's the gist of it. Just make sure you tell him/her what you're doing for work.