As a landscaper or nursery owner, you rely on commercial vehicles, like pickup trucks, box trucks and utility trailers, to get your employees and materials to the job site. Unfortunately, your unique business exposes you to automotive liability risks that can lead to financial losses. If your employee injures a client or damages their property while operating a business vehicle, they could hold you liable for any repairs or medical bills arising from the incident.
According to the 2023 Commercial Auto Insurance Market Outlook (gallagherperks.com/2023CommAutoInsMO) compiled by Gallagher Franchise Solutions, the costs associated with these liability risks have been steadily trending upward. Amid a surge in costly lawsuit and settlement trends in the trucking industry, social inflation is giving rise to nuclear verdicts in the commercial auto insurance space. An analysis by the Insurance Information Institute and Casualty Actuarial Society attributes a $20 billion increase in commercial claim costs throughout the last decade to nuclear verdicts and social inflation concerns.
As a small business owner, carrying the proper commercial auto insurance can safeguard the longevity of your business and its finances against increasingly costly lawsuits. Before you secure a commercial auto policy for your business, take into account the following considerations:
Do I Need Commercial Auto Insurance?
Yes. To operate a company vehicle for business — even if it’s just for errands or carrying tools — you need commercial auto insurance. A commercial auto insurance policy will cover any injuries or damages your employees may cause to others and their property while doing business. These policies can also include coverage for vehicles you borrow or rent and employees who use their vehicles while on the job. Michigan’s car insurance laws do require all drivers to carry a 20/40/10 no-fault insurance policy — that’s at least $20,000 in liability coverage per person, $40,000 per accident for bodily injuries and $10,000 in property damage coverage — in addition to personal injury and property protection coverages. Carrying a separate policy for your business risks, however, will ensure you’re adequately protected.
Making a Driver Safety Program
Whether your crew is taking the utility trailer around the corner or to a far-off job site, knowing your vehicles are operated safely and responsibly is essential.
Driver safety isn’t something to overlook. Driver shortages have unfortunately forced many business owners to lower their driver applicant standards, leading to more drivers with fewer years of experience on the road. These inexperienced drivers are more likely to get into accidents, increasing commercial auto claims. Avoid becoming part of this trend by examining candidates’ motor vehicle records before making an employment offer.
Additionally, early estimates from the National Highway Traffic Safety Administration show 9,330 people died in traffic trashes in the first three months of 2023. It’s essential to ensure your drivers are well-trained and responsive.
Improve driver safety by developing a driver safety policy that contains:
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Basic vehicle operation guidelines – Set standards for drivers so they know how to behave professionally while on the road. These guidelines can include driving defensively, always wearing a seatbelt and respecting posted traffic signs. Regularly retrain drivers on these guidelines and safe driving techniques to ensure their safety remains top-of-mind.
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Insurance requirements – If your employees use their vehicles for company business, you might want to require they carry additional liability coverage. Consult a trusted insurance professional to ensure they have the right coverage for your business needs.
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Rules against distracted driving – Distracted driving leads to accidents and fatalities. Ensure your employees know using cell phones and electronic devices on the road is illegal and will not be excused. While Michigan’s hands-free driving law has exceptions if a hands-free program or device is used, make sure your employees know if you enact a more stringent policy.
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Accident investigation procedures – Some accidents aren’t preventable. Establish and train supervisors and drivers on post-accident procedures so they respond promptly to injuries or damages. Some employers even supply drivers with an accident claim kit containing a pen and insurance claim paperwork to make the process easier.
Gallagher, a global leader in insurance, risk management and consulting services, offers a sample Driver Safety Policy for small businesses to view as an example. Find it online at gallagherperks.com/2023SampleDriverPolicy.
Vehicles are a necessity for landscapers and nursery owners. Following these tips and carrying proper insurance can help ensure your employees remain safe and your company avoids unnecessary litigation. Contact MNLA’s insurance expert, Ashley Thomas, for a free risk analysis to ensure you’re fully protected. Learn more about available coverage at gallagheraffinity.com/MNLA or contact Ashley Thomas of Gallagher Affinity at 918.764.1619 or ashley_thomas@ajg.com for a coverage review.
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 to be provided by Gallagher Affinity Insurance Services, Inc. (License No. 100310679 | CA License No. 0783129).
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