Buying a Fencing Company: Insurance to Have

A fencing company needs five things in force: general liability, workers' compensation for the crews in most states, commercial auto for loaded trucks and trailers, property and equipment coverage for the yard, and an umbrella where contracts or risk call for one. The liability policy must include completed operations (cover for injury or damage that shows up after a job is done), because the fence or gate your crew leaves behind has to hold up for years. Start with the liability side. A crew digs on a customer's land today, and the fence or gate it leaves behind has to hold up for years. This guide is for owners who just bought a fencing company and want to know what should be in force and what to confirm in the first few weeks.

The short answer

Core stack: general liability (with completed operations), workers' compensation, commercial auto, property for the yard, and inland marine for augers, tools and materials that move between sites, plus an umbrella where contracts or risk call for one.
Two exposures set this trade apart. The crew digs into ground that holds buried lines, and the finished fence or gate stays in service long after the invoice is paid. Ask how the policy treats both.
Gate automation and pool barriers raise the stakes. A moving gate or a barrier that fails to latch can injure a child, so check that the wording and the limits fit the work you actually do.
Do not assume the seller's policies are yours. In an asset purchase the seller's policies do not come with you, and in a stock purchase the company keeps them but the insurers must be told. Confirm in writing what is in force in your company's name.

What does a crew that digs and builds for years need covered?

The federal occupation profile for fence erectors lists tasks such as checking the fence line for electric cables or water lines, digging postholes with power augers, pouring concrete, welding and hanging gates. Each points to a different policy. The table matches the exposure to the coverage that usually responds, with what a new owner should look for in the wording.

Fencing company exposures and the coverage that usually responds
Exposure	Coverage that usually responds	What to check
An auger cuts a buried line or irrigation pipe on a customer's lot	General liability, subject to its exclusions and endorsements	How the form treats damage to the ground where the crew was working, and the deductible
A gate or finished fence injures a customer, child or passer-by	General liability, usually as completed operations	Occurrence form, limits, and the separate aggregate for finished work
A fence goes up on the wrong side of a boundary	Sometimes general liability, sometimes nothing	Any exclusion for surveying or layout services, and what the contract says about who sets the line
A crew member is hurt by an auger, saw, ladder or heat	Workers' compensation	Class codes, payroll estimate, and whether subcontracted installers are on the audit
A truck pulling a trailer of posts and panels crashes	Commercial auto	Trailers listed, drivers listed, and cover for employees who use personal vehicles
Fire or theft in the yard hits stock, trailers and tools	Commercial property for the yard and stock, inland marine for tools and equipment, auto physical damage or inland marine for trailers, business income	Replacement cost versus actual cash value, outdoor property limits, loss payee wording for financed assets
A severe injury claim exceeds the underlying limits	Commercial umbrella	Which policies it sits over, and what builders or property managers require

Two lines are judgment calls. Professional liability may matter if your company designs automated gate systems or lays out boundaries, since contractor liability policies can carry exclusions for design and surveying work, so check yours. Pollution is a modest need: the usual hazards are equipment fuel, concrete washout and treated lumber. Crime and cyber coverage matter in ordinary ways too: estimators collect deposits, customers pay by card, and a supplier invoice with changed bank details is a known fraud pattern. Ask whether the program includes crime and cyber cover and what it says about payments sent on a faked instruction. The general liability page and the inland marine page explain how those lines divide the work. For the vehicle, crew and umbrella rows, see the commercial auto page, reviewing commercial auto after you buy, reviewing workers' comp after you buy and reviewing umbrella and excess limits.

Why does the finished fence matter after the crew leaves?

A fence is passive until it is a pool barrier, a livestock enclosure or an automatic gate. On the standard Insurance Services Office (ISO) liability form, injury or damage arising from your finished work, away from your premises, can fall under products-completed operations coverage. That coverage has its own aggregate limit, separate from the general aggregate. The form generally excludes the cost of redoing your own faulty work. A post set too shallow that must be reset is your cost, while a gate that later injures someone can be a covered claim. Wording varies, so read your own form. The completed operations glossary entry explains the limit.

Pool barriers and automatic gates stretch the tail further, because a child can be seriously hurt years after the work. Florida's section 515.29 of the Florida Statutes is one example of a state pool barrier rule, and other states and cities set their own. The coverage gaps guide covers gates and barriers in detail.

A second question is easy to miss: the fences the company built before closing. Whether your policy treats them as the company's own work depends on whether you bought stock or assets and on when the injury happens. Injury that happened before closing generally falls to the occurrence policy in force when it happened, subject to its terms. The coverage gaps guide splits the cases, and the guide to completed operations claims from the seller's past jobs shows how one plays out.

Where might a lean fence contractor program be thin?

A seller's program may have matched a small, local operation, and the seller's broker may have had good reasons for each choice. Treat the gaps below as questions, not findings. The coverage gaps guide for fencing companies goes deeper on how to spot and fix each one.

Equipment and tools on the move. Augers, mixers, saws, welders and any skid steer or mini excavator are often scheduled on inland marine (floater) coverage rather than the yard's property policy, because they travel between sites.
Gate hardware waiting to be installed. Operators and access control hardware bought for a job but not yet installed may sit outside the yard's property policy. An installation floater is inland marine coverage on equipment a contractor is installing, so ask whether you have one.
Outdoor property limits. Many property policies cap what they pay for outdoor property, so stacked posts and ornamental panels in an open yard may not be covered at the value you assume.
Hired and non-owned auto. If estimators or crew leads drive their own vehicles on company business, general liability generally will not respond to a crash, and the auto policy responds only as written. Ask for hired and non-owned auto coverage.
Subcontracted installers. If crews are paid as 1099 workers, the workers' compensation audit may treat an uninsured subcontractor's pay as your payroll. See workers' comp, payroll and class codes for a fencing company.
Umbrella limits that match contracts. A builder may ask for more limit than the seller carried. See contracts, licenses and bonds for a fencing company.

What should you confirm before the first crew rolls out?

Work down this list with your broker and your deal counsel, deadlines first.

Deadlines and names. Workers' comp policies generally ask you to report an ownership change within 90 days. Many general liability forms cover a newly acquired organization automatically only until the 90th day, and the grant usually excludes LLCs, partnerships and joint ventures, does not apply if the company already has similar insurance, and needs a policy of your own to attach to. Also match the named insured on every policy to the legal entity you now own. See the first 90 days guide, adding a newly acquired company to your policies and the wrong named insured guide.
Trucks, trailers and drivers. Match the schedules to the vehicles you actually bought, including the flatbed trailers that haul posts and panels, and list who drives. Ask which vehicles the policy covers automatically (the form's covered auto symbols) and how many days you have to report an added vehicle.
Lender requirements. If a Small Business Administration (SBA) 7(a) loan financed the deal, the lender generally requires hazard insurance on pledged collateral for loans over $50,000, with a lender's loss payable clause (it protects the lender's interest in a covered loss to financed equipment, and the lender's form generally keeps that protection even if your own acts defeat your claim) and a mortgagee clause on real estate. Trucks, trailers and augers are often the collateral. See SBA lender insurance requirements.
Locate and incident records. Collect the seller's locate records and any log of line strikes, gate incidents and boundary disputes, and give them to the broker with the application.
Open deposits and callbacks. List open deposits, custom ornamental orders in production and warranty callbacks, and decide with your counsel who funds them.
Gate installation and service. Ask who installs and services automatic gates and which standards they follow, then confirm the application says so.
Contracts and license. Read the insurance clauses in your top contracts, and confirm who holds the contractor license.

The insurance checklist for buying a business covers the steps every acquisition shares. If you are weighing price, read the cost drivers guide. If you are choosing who helps you place all of this, read the broker guide. If you want a second set of eyes in the first week, Morrow can review inherited declarations pages and loss runs and request quotes, and any new terms depend on carrier underwriting.

What happens if the yard burns down?

A hypothetical example. A fire destroys a materials shed, two trailers and a stock of ornamental gates at a fencing company's yard. Suppose the shed and its contents were insured on the property policy at actual cash value, the trailers were financed and insured for $40,000 (on the auto policy or a floater) against a $55,000 loan balance, with the lender named as loss payee, and the gate stock was carried at $60,000 of old purchase cost but would cost $90,000 to replace. Three questions follow. Would the payout replace the gates, or only pay depreciated value? Would the $40,000 trailer payout cover the $55,000 loan balance, and who is paid first under the loss payee wording? Do idle crews keep costing money for weeks, and when does business income coverage start?

None of these answers can be read from the price of the policy. They come from the valuation clause, the outdoor property limit, the loss payee wording and the business income terms. A purchase price is not the insurable value of the assets, so inherited limits can be too low or too high. Ask your broker to show you each item on the declarations pages and forms, and remember a quote is not coverage until the carrier binds it.

Keep reading

Frequently asked questions

What is the most important policy for a fencing company?

General liability with strong completed operations wording is the usual first check, because a fence or gate keeps working for years after the job ends. Workers' compensation and commercial auto are close behind, since crews dig, lift and drive every day.

Will my insurance pay if my crew hits a sprinkler line?

Maybe. It turns on the policy form, its endorsements and the facts, so ask your broker to show you the wording before the next dig. The coverage gaps guide shows what to ask.

Do I need a separate policy for my augers and tools?

Augers, mixers, saws and welders are usually handled on an inland marine floater rather than the building and contents policy, because the building policy is written for the yard, not for equipment that travels, though where yours sits depends on the policy. Ask whether your equipment is scheduled, how it is valued and whether theft from a truck or a job site is covered.

How long do I have to tell my insurers I bought the company?

Workers' compensation policies generally ask for a report of an ownership change within 90 days, and many liability forms cover a newly acquired company only until the 90th day, only if you already own a policy and generally not for an LLC. Tell every insurer early and get the confirmation in writing.

Do the seller's policies transfer to me when I buy the company?

Not automatically. Policy rights generally cannot be transferred without the insurer's written consent. In a stock purchase the company and its policies stay in place but the insurer needs to be told about the change, and in an asset purchase you generally need your own policies at closing.

References

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.

Request a review Check a contract

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.

Just Bought a Fencing Company? What Insurance Do You Need?