The risk of loss due to commercial liability is a fact of life for nearly every business. In the event of a claim or litigation, nursery or landscaping companies like yours can face a variety of consequences. These can include monetary damages to be paid to the injured party if you’re liable, defense costs for your legal representation in court and reputational harm that could impede your ability to retain skilled talent and attract customers.
However, by familiarizing yourself with the most common types of general liability exposures, you can mitigate your business risks and help safeguard your career and finances.
1. Premises Liability
Does your company struggle with hazardous conditions in your office or on your premises, such as wet floors, cluttered aisles or damaged stairs? If so, these could open your business up to premises liability exposures. Referring to an organization’s responsibility for third-party injuries on a property due to site-specific dangers, this type of liability is a common risk for all businesses with brick-and-mortar locations.
Landscaping and nursery facilities can be busy, hectic places during peak season. If your nursery is brimming with a shipment of new plants and your staff doesn’t take proper care to clean up or mark puddles left behind by daily watering, an employee or client could slip and harm themselves, exposing you to liability claims. At the same time, if one of your landscaping employees leaves a piece of equipment out, causing someone to trip and break their wrist, you could be held liable for any medical bills arising from their treatment.
2. Operational Liability
Landscapers and nursery employees frequently visit client homes to make deliveries or complete installations, exposing them to operational liability. A business’ operations liability exposure refers to the possibility it will be held liable for bodily injury or property damage stemming from its ongoing operations.
Suppose your landscaping company is at a property to install a new water feature. Digging a hole for the feature goes well, but your crew fails to cordon off the space properly at the end of the day. Unbeknownst to you, the client’s family pet falls into the unsecured hole and injures itself. Because your team didn’t adequately address the risk of injury, the homeowner can sue for negligence and demand you be held liable for their veterinary bills, as well as any damages. Additionally, the story quickly spreads among your clients with pets and small children, and the harm to your reputation causes many to cancel projects.
3. Products Liability
The products you use and sell at your business can be a powerful way to beat the competition and attract clients. However, these products can also open your business to claims. Products liability is the loss exposure an organization faces as a result of manufacturing, distributing or selling an unsafe or defective product.
Imagine that, as a nursery owner, you receive a complaint from a loyal client after selling several trees. They claim the trees they purchased are diseased and, since their planting, have spread an incredibly damaging blight to others. Because they bought the trees from your nursery, you can be held liable for the damage inflicted on their property.
Landscapers also face similar risks. Many in your business use herbicides to control the spread of unsightly weeds or undesired plant growth. If you use a product that is later found to be harmful to human health, your clients can hold you liable for the risk to which you exposed them.
4. Contractual Liability
A contract is an excellent way for landscapers and nursery owners to set client expectations. However, by agreeing to contract terms, your company takes on loss exposures that could leave you liable if the other party believes you haven’t adequately fulfilled your obligations.
You should always carefully examine and follow the contract terms closely to prevent unhappy clients and costly lawsuits. If a client requests you only use native plants in a project, and your team happens to plant an invasive exotic by accident that quickly begins to spread across the property, your team can be held liable for not adhering to the contract and any damages, such as the cost of removing it from the property.
Similarly, if a landscaping client requests their project utilize an expensive, hard-to-source stone and your team sources a cheaper option without informing them or getting approval, you can be held liable for breaking the terms of the contract.
5. Completed Operations Liability
A completed project should spell the end of your liability, right? Wrong. Completed operations liability is an exposure that comes into play if injuries or damage occur to a third party once work has been finished, turned over to the client or put to its intended use.
For example, your landscaping company gets a contract to build a retaining wall. The project goes smoothly, and your team completes it on time and under budget. Days later, you get an irate call from your client — the retaining wall failed following a rain event, causing thousands of dollars in damage to their property. They quickly file a lawsuit to recoup their losses and hold you responsible for alleged “shoddy work.”
In this scenario, you’d be responsible for your defense costs and any damages awarded by the court if found liable. Additionally, you also run the risk of loss of business due to reputational harm following the well-publicized case.
Liability exposures are a fact of life for business owners, but by remaining aware of the potential for each and carrying insurance policies that help you mitigate your risk, you can help ensure your company remains strong. If you want additional assistance determining the best way to limit your exposures to the liabilities listed above, contact insurance expert Ashley Thomas of Gallagher Affinity for a free risk analysis and coverage review at 918.764.1619 or ashley_thomas@ajg.com. You can also learn more about available coverage at gallagheraffinity.com/MNLA.
The information contained herein is offered as insurance Industry insight and provided as an overview of current market risks and available coverages and is intended for discussion purposes only. This publication is not intended to offer legal advice or client specific risk management advice. Any description of insurance coverages is not meant to interpret specific coverages that your company may already have in place or that may be generally available. General insurance descriptions contained herein do not include complete Insurance policy definitions, terms and/or conditions, and should not be relied on for coverage interpretation. Actual insurance policies must always be consulted for full coverage details and analysis. Insurance brokerage and related services provided by Arthur J. Gallagher Risk Management Services, LLC (License Nos. 100292093 and/or 0D69293).
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