After you buy a commercial landscaping company, first check that every machine is insured under the right policy. Mowers and skid steers are usually mobile equipment, while trucks, plow trucks and trailers are autos. Next, make sure the workers' compensation payroll estimate matches your real seasonal crews. Then check snow removal, herbicide application and what your customer contracts require. This checklist is for searchers, Small Business Administration (SBA) loan buyers and holding companies that just closed on a landscape maintenance, installation or snow company.
The short answer
- Mowers, skid steers and similar machines are usually mobile equipment: liability sits on general liability and damage to the machine needs an equipment (inland marine) policy.
- Trucks, trucks with plows attached and trailers are usually autos. Check the vehicle schedule, titles and how trailers and the equipment on them are covered.
- Seasonal hiring makes workers' comp estimates easy to miss. A low estimate becomes an audit bill after the policy ends.
- Snow and ice work drives slip-and-fall claims. Confirm the policy does not exclude or limit it and that contracts and logs support you.
- Commercial customers usually require additional insured status, wording that makes your policy pay before theirs (primary and noncontributory) and a waiver of subrogation. Match your endorsements to them.
Which machines are autos and which are mobile equipment?
This split decides which policy pays when a machine hurts someone or gets damaged. Under the standard Insurance Services Office (ISO) definitions, mobile equipment includes riding mowers, skid steers and other machinery used mainly off public roads. Liability for mobile equipment usually sits on the general liability policy. Autos are covered by the commercial auto policy. Damage to your own machines is covered by neither; it needs an equipment policy, usually called a contractor's equipment floater under inland marine insurance.
| Equipment | Usually treated as | Liability from | Damage or theft from |
|---|---|---|---|
| Zero-turn and riding mowers, skid steers, mini excavators | Mobile equipment | General liability | Inland marine equipment floater |
| Pickup and dump trucks | Auto | Commercial auto | Auto physical damage |
| Truck with a snow plow attached | Auto | Commercial auto | Auto physical damage; the plow may need to be listed, especially a detachable plow |
| Trailers | Auto | Commercial auto, depending on the covered auto symbols (the codes that say which vehicles count as covered autos) | Auto physical damage, if scheduled |
| Mowers and blowers on a trailer | Mobile equipment or tools | Commercial auto while the equipment is being carried or towed; general liability once it is unloaded and operating | Inland marine (the auto policy usually does not cover cargo) |
| Rented or leased machines | Depends on the machine | General liability for mobile equipment, auto for a rented auto; the rental contract may also make you responsible | Inland marine with rented equipment coverage |
Two wrinkles. A machine driven on public roads may be treated as an auto if it is subject to a state motor vehicle or financial responsibility law. And under ISO definitions, a self-propelled machine with snow removal equipment permanently attached is treated as an auto, which can matter for a tractor or skid steer used for plowing. Ask your broker how your carrier treats each one. See mobile equipment vs auto and the new owner review of equipment coverage.
Are the trailers and the equipment on them insured?
Trailers are where inherited schedules often go wrong. Check three things. Is each trailer listed on the auto policy, or covered by the policy's auto symbols? Is physical damage coverage on the trailers you would replace? Is the equipment on them listed on the inland marine policy at replacement cost, if that is how you would rebuy it? Theft from yards and job sites is common, so read any theft conditions, such as locked storage requirements.
Also check federal registration. The Federal Motor Carrier Safety Administration (FMCSA) requires a U.S. Department of Transportation number for vehicles used in interstate commerce with a gross vehicle or combination weight rating of 10,001 pounds or more, and many states apply their own rules to trips that stay inside the state. A loaded truck and trailer can cross that line. Carriers ask about it on the auto application. See the commercial auto review and removing vehicles, drivers and equipment you no longer use.
How do seasonal crews affect workers' comp and audits?
Workers' comp premium starts as an estimate. After the policy ends, the insurer audits actual payroll and class codes and bills or refunds the difference, and it can audit for up to three years after the policy ends. Landscaping payroll swings with the seasons and with new contracts. In a stock purchase you inherit the seller's estimate. In an asset purchase your new policy usually copies the seller's figures. Either way, the estimate is often stale by the time you close. In both structures, the seller's experience rating (the factor that adjusts premium for past claims) usually follows the business to you. In states that use National Council on Compensation Insurance (NCCI) rules and several bureau states, the policy requires you to report the ownership change to your insurer within 90 days.
Watch three things. First, landscaping, tree work and snow removal can fall in different class codes, and splitting one person's pay between codes generally requires records of actual hours in each. Second, crews hired through a subcontractor without their own workers' comp can be added to your premium at audit. Third, seasonal and guest workers count as payroll like anyone else. Rules and codes vary by state. Ohio, Washington, North Dakota and Wyoming require coverage through a state fund. Texas lets most private employers choose not to carry it, which brings its own liability risks.
A hypothetical example. A buyer closes in March on a landscaping company and starts its own workers' comp policy using the seller's estimate of $2,000,000 of payroll. The buyer wins two large commercial maintenance contracts in April and finishes the year at $2,600,000. At the audit, the insurer bills the premium on the extra $600,000. Updating the estimate mid-year could have spread that cost over the remaining installments, depending on the carrier's billing terms, instead of one bill that lands on top of debt service. The numbers are illustrative.
See payroll estimates and audit bills and contractors and the workers' comp audit.
What do snow removal contracts change?
Snow and ice work brings slip-and-fall claims, and those claims can arrive many months after the storm. Check these points before the first snowfall:
- Is snow work covered? Some carriers exclude or limit snow and ice removal, or cover it only if it is declared on the application. If the seller added snow work after the policy started, the carrier may not know.
- What do the contracts promise? Commercial snow contracts often require you to name the property owner and manager as additional insureds, sign a broad hold harmless clause and meet tight service levels, such as clearing whenever any snow accumulates. Those terms can shift liability to you. Have counsel review hold harmless and indemnity terms before you sign or renew.
- Who plows for you? Subcontracted plow operators should carry their own liability and auto coverage and name you as additional insured.
- Can you prove what you did? Service logs with times, photos and weather records are often the best defense.
See contractual risk transfer with subcontractors.
Is herbicide and fertilizer application covered?
Not automatically. The standard general liability form excludes most pollution, and herbicides and some fertilizers can fall within it. Drift onto a neighbor's plants or runoff into a pond can produce a claim. Policies written for landscapers often add back limited coverage for herbicide and pesticide application, sometimes with a lower sublimit and conditions such as using licensed applicators and following the label. Even then, damage to the customer's own lawn or beds may not be covered, because general liability usually excludes damage to property you are working on and faulty work. Ask the carrier how it handles a herbicide burn on the client's property.
Licensing matters here too. Restricted use pesticides may only be applied by certified applicators or people under their direct supervision, under standards set by the U.S. Environmental Protection Agency (EPA) and run by state certification programs, and many states license commercial applicators more broadly. Confirm who holds the licenses after closing. See the pollution liability review and the companion checklist for pest control companies.
What do customer contracts require from a landscaper?
Property managers, homeowners associations (HOAs), office parks and retailers usually send a contract with insurance requirements attached.
| Requirement | What it means | What to check on your policies |
|---|---|---|
| Additional insured | The customer gets insured status under your liability policy, usually limited to claims arising from your work and to what the endorsement wording allows | A blanket endorsement that includes completed work, not just ongoing work |
| Primary and noncontributory | Your policy is meant to respond before the customer's own policy, if the endorsement wording matches the contract | Endorsement wording that matches the contract |
| Waiver of subrogation | Your insurer gives up its right to recover a covered loss from the customer, to the extent the endorsement and contract allow | Waiver endorsements on general liability, auto and workers' comp |
| Minimum limits and umbrella | Set amounts per claim and in total | Umbrella that sits over general liability, auto and employers liability |
| Notice of cancellation | The customer wants advance notice | What your carrier will actually agree to send |
Also check tree work. Some landscaping policies exclude tree trimming above a set height or tree removal, which some maintenance contracts include. Certificates the seller issued still name the seller's policies, so reissue them after closing. See additional insured, waiver and primary wording for new owners and certificates the seller issued.
What belongs on my first-month checklist?
| Check | Why it matters in landscaping | Ask for |
|---|---|---|
| Mobile equipment vs autos | The wrong policy can leave a machine or a crash uncovered | Equipment and vehicle schedules, titles, how the carrier classifies each machine |
| Trailers and the equipment on them | Often missing from schedules; the auto policy usually does not cover cargo | Trailer list with values and VINs, inland marine schedule at replacement cost |
| Workers' comp payroll and class codes | Seasonal hiring and new contracts drive audit bills | Payroll by class, crew hours by type of work, last audit, experience rating worksheet, subcontractor certificates |
| Snow and ice work | Slip-and-fall claims; some policies exclude or limit it | Application, snow contracts, service logs |
| Herbicide and fertilizer application | The pollution exclusion can remove coverage | Applicator endorsement, sublimit, applicator licenses |
| Customer contracts | Additional insured, primary wording, waivers and limits | Top 20 contracts and the certificates you must reissue |
| Seller's past work | Claims about earlier installs, damaged property or past storms can arrive after closing | Five years of loss runs, purchase agreement indemnity terms |
For claims tied to work done before you owned the company, see completed operations claims from the seller's past jobs. If you want a second read, a Morrow review can compare the equipment, auto and snow terms with the work your crews do and request quotes where it makes sense.
Keep reading
- New Owner Review: Tools, Equipment and Inland Marine
- Payroll Estimates and Surprise Workers' Comp Audit Bills
- Additional Insured, Waiver of Subrogation and Primary Noncontributory
- New Owner Review: Commercial Auto
- Just Bought a Pest Control Company? Your Insurance Review Checklist
- All guides for new business owners
Frequently asked questions
Is my zero-turn mower covered by my auto policy or my general liability?
Usually general liability covers injuries or damage the mower causes, because mowers are typically mobile equipment. Damage to the mower itself is usually covered by an inland marine equipment policy. A machine driven on public roads may be treated differently, so ask how your carrier classifies it.
Why did I get a big workers' comp bill months after the policy ended?
Workers' comp is priced on estimated payroll and then audited. If actual payroll was higher, or crews were moved into higher-rated class codes, the insurer bills the difference. Updating the estimate when you win contracts or hire for the season can reduce the surprise.
Does general liability cover snow plowing?
It depends on the policy. Some carriers exclude or limit snow and ice removal or require it to be declared. The plow truck itself is usually an auto, so accidents on the road go to the auto policy. Check both policies and your snow contracts before winter.
Do I need a separate policy for herbicide spraying?
Not always a separate policy, but you need coverage that gives back what the pollution exclusion takes away. Landscaper policies often include limited herbicide and pesticide coverage by endorsement. Check the limit, the conditions and whether your applicators hold the required licenses.
Are the certificates the seller gave customers still good?
A certificate only describes policies at the time it was issued and is not the policy. After closing, especially in an asset purchase, the seller's policies may no longer cover your operations. Reissue certificates from your own policies and confirm the endorsements the contracts require.
References
- Federal Motor Carrier Safety Administration: Do I need a USDOT number?
- U.S. Environmental Protection Agency: Certification Standards for Pesticide Applicators
- NCCI: Workers Compensation and Employers Liability Insurance Policy WC 00 00 00 C (carrier-hosted copy)
- ISO: Commercial General Liability Coverage Form CG 00 01 12 07 (carrier-hosted copy)
Just bought a business? Get your insurance reviewed.
Send Morrow the declarations pages, loss runs and key contracts you inherited. Morrow can review them against the business you bought, flag gaps and request quotes where it makes sense. Any new terms depend on carrier underwriting.
Morrow · 25 New Chardon Street, 4th Floor, Boston, MA 02114
This article is general information, not legal, tax or financial advice, and not a coverage determination. Coverage depends on the actual policy wording, carrier underwriting, your purchase agreement and your contracts. Ask your attorney and accountant about deal and legal questions.