Landscaping services include initial landscaping and ongoing maintenance for commercial and residential clients. Chemical line and pest control, “line-clearing” (branch removal around utility lines), irrigation systems, landscape construction, and tree care are all possible services. In addition, some landscaping companies offer snow removal services during the winter months (policy must be endorsed to include the exposure for snow removal).
There are 621,733 landscaping and lawn maintenance businesses in the United States, according to IBIS World. Sixty-two percent of customers come from single-family residential homes, with the average homeowner spending $100 to $200 per month for general landscaping, maintenance, lawn care, gardening, and upkeep (HomeAdvisor). Seventy-one percent of landscapers offer design and construction services, while 63% provide tree care.
Over the past three years, the industry has grown 6.6% annually and is anticipated to continue its successful path in 2023 despite economic headwinds. The positive outlook is partly due to ongoing green initiatives and increasing preferences for using outdoor spaces as entertainment, lounge, walking, and sitting areas. Industry employment is expected to grow 8% from 2020 to 2030, according to the Department of Labor.
Going Green
Depending on the region, the shift to a more ecological, water-saving-focused landscape will continue, according to an article in The Edge by the National Association of Landscape Professionals. Drought-tolerant landscaping (known as xeriscaping) is gaining popularity and involves using low-water plants, practical turf, and efficient irrigation practices to create landscapes and gardens that require less water.
Consumers are also looking for indigenous plant species to be planted on their properties, as native gardening reduces air pollution, requires less fertilizer and pesticides, and keeps away invasive insect species.
Green roofs and walls, also known as living roofs and walls, are becoming more popular in commercial landscapes. These features include incorporating plants and vegetation into a building’s roof or walls, which can have various benefits, such as lowering energy costs, improving air quality, and providing a natural habitat for wildlife.
Outdoor Spaces
People are spending money on landscaping, as they spend a lot of time outside. Post-pandemic, they are still looking at their properties as vacation-worthy backyards.
Businesses are also looking for ways to create comfortable, functional, and visually appealing outdoor workspaces. This could entail adding covered patios, outdoor seating areas, and even small gardens.
Contractors understand the need for General Liability insurance to protect against third-party bodily injury liability and property damage liability losses. Claims may involve a third party slipping and falling on your premises or a job site or your finished work causing bodily injury or property damage. When seeking bids on a project, a client will ask for proof of General Liability insurance.
CGL insurance primarily protects policyholders from losses associated with third-party liability claims arising out of a company’s business operations. A typical CGL insurance policy covers claims for: third-party property damage and bodily injury associated with the insured’s negligence in performing it’s work or operations. It does not cover claims for: professional errors; employee injuries; employee discrimination; or damage to the company’s own business property.
Professional liability insurance is sometimes referred to as “malpractice” insurance or “errors and omissions” insurance. Professional liability insurance protects against liability to third persons for losses caused by the insured’s performance of professional services, and specifically includes intangible and economic losses (as contrasted with general liability insurance). There are usually exclusions for “bodily injury” or “property damage” claims (as these claims are covered by general liability insurance).
Professional Liability insurance may pay for legal costs and judgments/settlements (up to the policy limit) if the contractor is found to be responsible for damages.*
Why do contractors need this coverage?
As the traditional construction delivery model evolves and the lines of responsibility between contractors and design firms overlap, contractors are assuming design liability, either directly or indirectly, thereby increasing their exposure.
Furthermore, design/build as a project delivery method influences project owners’ expectations for all types and sizes of construction – not just large-scale projects. Owners are now looking for a single point of contact so that they have to deal with only one entity if a project issue arises, and in most cases, that is the contractor.
*NOTE: The insuring agreement in a policy sets out the covered perils, assumed risks, and nature of coverage that the insurance company provides to its insured in exchange for the premiums paid. Thus, the terms and conditions of the policy will dictate whether coverage exists and the nature of any potential benefits.
It’s no secret; 2022 brought with it economic uncertainty, labor shortages, and supply chain issues—all of which impacted contractors and small business owners around the globe. While the world continues to change, adapting to industry trends is key to keeping your construction company alive during these challenging times. From developing a brand mission to implementing tech to elevate the customer experience, investing in multi-channel media, and tapping into real-time data, there’s no better time to optimize your marketing strategy for 2023 than now.
Develop Your Brand & Purpose
Whether buying clothes, food, or bidding contractors, customers are turning to companies with a strong brand purpose that aligns with their values. Turns out, there should be more to your website, profiles, and social platforms than a list of services and contact information; clearly outline your story and mission in a way that’s authentic, value-centric, and conversational. With competition booming, set yourself apart by spotlighting your quality of work, exceptional customer service, years of education, experience, and sustainable business practices. Another way to develop your company’s identity and connect to a greater purpose is by donating your skills and time to local charities and community-building causes dedicated to helping those in need.
Elevate the Customer Experience with Tech
You can’t be available to answer questions 24/7, especially if you’re facing a workplace shortage. However, artificial intelligence (AI) can. More and more businesses are introducing technologies such as AI to help engage with customers online. Chatbots can be implemented directly into your current professional website to help answer current and prospective clients' initial questions before putting them in touch with a real-life representative. Remember, the chat function shouldn’t replace personal outreach but can act as a first point of contact for someone looking for a response ASAP.
Invest in Multi-Channel Marketing
While expanding marketing tactics across platforms isn’t exactly new, it’s crucial to find more leads in 2023. Think about it; your customers' online habits have changed, and they aren’t just scrolling through Facebook—they’re actively searching for and researching contractors across multiple channels like review-based search engines, hyperlocal digital publications, virtual neighborhood groups, and more before landing on your website, social platforms, or calling you directly. Expand your marketing horizons and create a seamless experience by meeting customers where they are.
Not sure where to start? Join industry associations and connect with like-minded contractors and small business owners to see what’s working (and not working) for them as a kicking off point.
Use Data to Support (and Modify) Your Marketing Strategy
Once you’ve developed a multi-channel marketing strategy, it’s time to leverage customer data to optimize your efforts. Capture more leads and grow your contracting business by better understanding your prospective clients—by identifying demographic information, interests, and the way they navigate and interact with your website. You can run relevant ad campaigns hyper-focused to target the right audience.
Ultimately, there’s no one-size-fits-all approach to contractor marketing, but leading with authenticity, experimenting with tech, implementing an omnichannel approach, and leveraging historical data will help lay the foundation for a successful strategy in 2023.
There is no doubt about it; we’re living in a digital world. While it may feel challenging to stay up to date on all the online marketing trends as a small business owner, the Internet has certainly made many aspects of being a contractor easier. For one, you can connect with clients and prospects with the touch of a button. But, just as importantly, technology can also help you pay your suppliers and employees, and get paid sooner—improving cash flow and freeing you up to focus on other day-to-day business matters.
Read on to learn how switching to digital-age payment platforms can benefit your construction company.
The Benefits of Digital Payments
Don’t wait weeks, or even months, to get paid upon completing a construction project. In an industry where a constant flow of cash is necessary for buying supplies and paying subcontractors, getting paid quickly and efficiently is vital to the cycle of your business.
Paper checks can bounce and cash can go missing. With fraud teams and safeguards in place, transitioning to digital payments can better protect your contracting business and customers from financial mishaps.
Customer habits are changing, and more clients expect their contractors to accept digital payments via tools such as direct deposit, Zelle, Venmo, or PayPal. Don’t miss out on an opportunity because you think the old way is the only way.
Digitizing payments will not only help you enhance efficiency and stay on top of unpaid invoices, but a digital paper trail can also help you stay organized when it comes to bookkeeping and fact checking any claims from vendors.
Whether you’re a contractor, subcontractor, or supplier waiting to get paid, standing by for a check to clear can feel like ages. With electronic payments, you’ll get constant updates on the status of transactions, so you can track exactly when money will hit your account. Plus, once the payment is complete, both parties will be notified by the platform.
Digital Payment Options
If you’re still signing physical checks and not sure how to get started with digital payment platforms, take a look at some of your options, along with the pros and cons of each:
Pros: Most commonly used for businesses, fast, added security and protection, a record of payment
Cons: This option may include transaction fees
Pros: Easy to use, can be cheaper to process than other methods, automate payroll, reach customers without credit cards
Cons: Banks might charge a fee, processing may take several business days, you may have a daily or monthly cap on how much money you can transfer and fees for insufficient funds
Pros: Customers are likely to be familiar with apps like PayPal and Venmo, easy to link to bank accounts, secure payments, instant transfers with Zelle
Cons: Spending limits; both parties must have active accounts on the platform
All in all, consider transitioning to digital payments; your clients, employees, suppliers (and check signing hand) will thank you.
As the holiday season kicks off, many homeowners are ready to decorate their homes – from adding some lighting to frame a home’s windows to creating an extravagant winter wonderland that includes extensive exterior light installation, a Christmas village, a nativity scene, Santa and his reindeer, candy cane lane, and other holiday decor that attracts neighbors and others to come by and experience the extravaganza.
One house in California, for example, touted more than 640,000 lights on its property during the holiday season, according to Smithsonian Magazine. A neighborhood in Brooklyn transforms into a winter wonderland replete with a life-size reindeer, giant inflatable snowmen, dozens of Santas, and, of course, thousands of lights. Throughout the country, homes and public spaces light up with holiday decorations in December.
Who’s Installing the Lights and Decorations?
More often than not, contractors who are landscapers, electricians, or painters will offer Christmas light installation and decoration services. For many homeowners, it’s best to go the professional route if they want extensive lighting installed. Installing lights and hanging holiday decorations can be dangerous. This often involves climbing up to high places, like the roof and tall trees, with many ornaments and electrical components that need to be set up and connected. A contractor specializing in lighting and decoration services has the expertise and equipment to provide homeowners with a winter wonderland.
If you’re looking to expand your business during the holiday season, be sure to consider the following:
In addition, a professional lighting installer knows the proper safety precautions to take to avoid an accident or even starting a fire.
Before contractors begin a project, they must pull all the necessary permits. Issued by a government agency, a building permit is an official document that approves construction, alteration to a piece of property, and, in some cases, a remodel project. Building permits are required, as they create uniformity and help maintain building standards for public safety.
Having to halt construction or rebuild a specific part of a structure that was not permitted can result in additional costs and, in some cases, cripple a contractor’s business. Contractors can also be fined, lose their licenses, and face civil lawsuits and reputational damage if performing work without a permit.
Let’s delve deeper into the type of work that requires permits and look at some tips on getting the necessary permits to do the job.
New Construction
A construction permit is always required when building on previously uninhabited land. Other structures, such as garages and gazebos, require construction permits as do residential homes and apartment buildings.
Additions
Sunrooms, garage conversions, extra rooms, and bump-outs are examples of additions that would require construction permits.
Renovations
This can include re-roofing a home, removing or adding walls, renovating the kitchen or bathroom, and demolishing a section of the house.
Specific Trade Work
This type of work is usually associated with specific trades such as electrical, plumbing, roofing, etc. Conditions caused by an improperly built electrical or plumbing system can quickly turn into fire and public health hazards.
Permit Costs
The permit cost varies by town or city, with some permits based on a flat fee depending on the project type. Permit costs can also be based on construction values such as labor and materials. Some contractors pass along to clients the fee the building department charges to pull the permit, while others charge an hourly rate based on the amount of time spent to obtain the permit. Others bundle the cost of the permit pulls into an “extra fees” category.
Quick Tips for Pulling Permits
To pull a permit, a contractor must contact the building department to inform them of the project to be worked on. The contractor must complete the required applications, provide a list of the materials to be used, and pay the permit fees. The building department will review the application and approve it or request changes. Once the permit certificate is issued, it must be visibly displayed on the construction site. Typically, the building department will perform two inspections to assess the quality of the work.
To make sure you get the permits you need on time and satisfy your clients, following are some tips:
Pulling permits can be time-consuming, particularly when working on several projects. Building permit services companies exist that can take the process off your hands so you can focus on the work itself. Permit services can help by completing paperwork, tracking fees, tracking/managing inspections, and ensuring necessary permits are pulled. Of course, a fee for this should be built in to your costs.
Your insurance policies are in place to protect you against liability exposures. It’s important to understand that endorsements are available and designed to change a policy’s terms and conditions. Often, these policy endorsements are requested before starting a project. Let’s review specific endorsements typically requested of contractors.
Primary Wording
“Primary” wording in a policy means that the policy will be the first to respond in the event of a loss. This basically stipulates the order of whose policy will be triggered first to pay a claim. If the language also includes “non-contributory,” it means the policy will respond without contribution from another policy. Basically, the policy with the primary and non-contributory wording will pay the claim to the extent of its limits. Only if the policy’s limits are exhausted can the remainder of the claim be paid from another party’s policy.
For example, let’s say that during construction a subcontractor injures a bystander while using a crane. The subcontractor had not adequately rigged the materials, so they fell to the ground and created flying debris, injuring the passerby. The injured party sues the property owner, the general contractor (GC), and the subcontractor who caused the injury due to improper rigging. When the owner receives the claim, he or she tenders it to the general contractor, who then tenders it to the subcontractor. The subcontractor’s insurance, which names the owner and the GC as primary and non-contributory insureds, responds to the claim on behalf of all parties. The subcontractor’s insurance responds first without seeking reimbursement from the owner’s or GC’s insurance policies. If the subcontractor’s insurance limits are completely exhausted by the claim, the GC and owner’s policies will respond in accordance with the contract requirements.
Additional Insured
An additional insured is a party other than the primary insured covered on the primary insured’s insurance policy. Project owners frequently request that they be named as an “additional insured” on a general contractor’s General Liability policy. Furthermore, general contractors often require subcontractors to name the GC as an additional insured on the subcontractor’s general liability, auto, and umbrella policies. Additional insured status must be made by endorsement.
When the additional insured status is properly obtained, the additional insured becomes the beneficiary of a number of important rights. An additional insured, for example, has the right to file a claim directly with the primary named insured’s insurance company. This right includes the right to legal defense against third-party claims, coverage for damage caused, or both.
Waiver of Subrogation
Many construction contracts and subcontracts include a “waiver of subrogation” provision in the “insurance requirements” section of the contract. This type of provision is included to prevent an insurance company from suing another party involved in the project who may have caused the loss. Whenever a contract requires you to waive subrogation rights, check with your insurance broker and attorney before signing the agreement.
Your contractor’s tools and equipment are instrumental to your livelihood. If they get stolen or damaged, you won’t be able to continue on a job until they are replaced or repaired. Without the right type of coverage, this can be costly. You can’t afford the out-of-pocket expenses, downtime, loss of revenue, and potential damage to your reputation.
Your tools and equipment are vulnerable to loss as they are moved from one job site to the next. You might think your Commercial Property coverage will respond and pay for damaged or stolen tools and equipment. But this isn’t the case. Your Property insurance will cover only tools and equipment in the building listed on your policy. It does not cover these valuable items while in transit, at a temporary location, or at the job site.
You Need Coverage That Goes with You
A Contractor’s Tool & Equipment policy protects your tools and equipment on your property, job sites, temporary locations, or in transit. This is critical because most tool damage occurs on the job site, and most thefts arise during transportation.
Coverage applies to tools and equipment listed on the policy. This includes hand tools, such as saws, wrenches, and hammers; power tools, such as drills, nail guns, and jigsaws; and heavy equipment, such as excavators and backhoes. It will pay to replace stolen tools and equipment and for repair or replacement if they are damaged by a disaster like a fire, vandalism, or a work accident.
Talk to your agent about whether coverage is written on an actual cost value (ACV) or replacement cost basis. ACV replaces lost property at its original value, which may be much less than required when purchasing the same item and brand after a loss. Replacement cost reimburses you for the amount needed to replace your old item with one that’s the same or similar when new.
A Contractor’s Tool & Equipment policy helps get what you need to keep you and your crew on job sites after a loss.
Create a Business Plan
First and foremost, it’s time to build the blueprint of your newfound business. This means coming up with a catchy name for your brand that doesn’t already exist, estimating your startup and ongoing costs, determining the exact services your contractor business will provide (full-service offerings vs. a specialized scope of work), acquiring any necessary business and state licenses, laying out the structure of your team and nailing down who your key audience is—to start. While this part of the process sounds time consuming, be as thorough as possible. Remember, your company is only as strong as its foundation!
Types Of Insurance Coverage for Contractors
It’s no secret that running a construction site has its risks. Between the potentially dangerous terrain to the heavy machinery, equipment, and tools, there are countless opportunities for your employees to get hurt on the job. That’s why proper coverage is crucial. Not sure where to start?
Here are the essential coverages for contractors:
While insurance coverage is there to protect you when you need it, be sure to develop a thorough safety plan to prevent accidents in the first place. Brief all staff members, including new employees, on the rules and regulations, and ensure they know what to do in case a work-related incident occurs.
Tips on How to Market Your Small Business
Now that your construction company is up and running, it’s time to promote your business both online and offline. While marketing may not be in your wheelhouse of expertise, here are a few simple ways to advertise your small business:
As a contractor, there are many hazards at both your business location and on job sites. Risk is an inherent part of the construction industry. General Liability insurance is designed to respond to the various exposures you face. Here’s a rundown of how this insurance policy protects your business.
A CGL policy covering third party claims. It is neither first party coverage nor a surety bond. "First party" coverage is for losses suffered directly by the insured. "Third party" coverage is for losses suffered by other persons for which the insured may be legally responsible. In the usual first party policy, the insurer promises to pay money to the insured upon the happening of an event, the risk of which has been insured against. In the typical third-party liability policy, the carrier assumes a contractual duty to pay judgments the insured becomes legally obligated to pay as damages because of bodily injury or property damage caused by the insured. However, an insurance policy is a contract and governed by those principals. The insuring agreement sets out the covered perils, assumed risks and nature of coverage that the insurance company is providing to its insured in exchange for the premiums paid. Thus, the terms and conditions of the policy will dictate whether coverage exits and the nature of any potential benefits.
However, an insurance policy is a contract and is governed by those principles under the contract. The insuring agreement sets out the covered perils, assumed risks, and nature of coverage that the insurance company provides to the insured in exchange for premiums paid. Therefore, the terms and conditions of the policy will dictate whether coverage exists and the nature of any potential benefits.
At Your Business Location
You may own or lease a building where prospects and clients meet with you to discuss projects and where you may receive supplies and materials if someone (other than you or your employees) gets hurt while at your office, a General Liability policy will cover the costs associated with a claim if you are found responsible. This could include medical payments and, if you are sued for negligence, the cost to defend a lawsuit and any settlement or jury award up to the policy limit.
On a Job Site
Now let’s say you are doing a home renovation and you leave your toolbox in the middle of the kitchen floor while going out to your vehicle to get something. Your client’s son runs into the kitchen, trips over the toolbox, lands face forward, and suffers a severe head injury. General Liability insurance will step in to pay for medical expenses. It will also cover you if the family sues you. Again, coverage is designed for third-party claims, not for you or your employees on the job.
To land a project, contractors are typically asked to provide proof of Liability insurance.
Products and Completed Operations
It’s important that you make sure you have Products and Completed Operations Liability as part of your General Liability insurance. This will cover your construction business if your finished work causes bodily injury or property damage. (It does not cover financial loss due to negligence – that’s what Professional Liability insurance is for.)
General Liability insurance also covers your operation for copyright infringement and defamation (libel and slander).
A General Liability policy protects your assets in the event of third-party bodily injury and property damage liability claims. Generally speaking, policies come with limits of $1 million per occurrence and $2 million in aggregate. An Excess Liability policy is available to provide supplemental limits beyond what’s available with General Liability insurance. Pollution Liability insurance is also available to cover the costs for cleanup, bodily injury, property damage, and legal defense costs associated with a qualifying environmental incident.
With the right program, you can continue to expand your business confidently.