Workers’ Compensation Insurance for Landscapers and Landscape Contractors

As a landscaper, having proper insurance coverage is crucial to protecting your business. Workers’ compensation insurance specifically helps cover costs if an employee is injured on the job. Without adequate coverage, a single employee injury could devastate your company’s finances.

This comprehensive guide will explain everything landscapers need to know about securing the right workers’ compensation policy. We’ll cover key topics in depth like:

• What Is Workers’ Compensation Insurance?
• Why Landscapers Need Workers’ Comp
• What Does Workers’ Comp Insurance Cover?
• Exclusions to Be Aware Of
• How Much Does Workers’ Comp Cost for Landscapers?
• Strategies to Reduce Your Workers’ Comp Premiums
• How To Get Tailored Workers’ Comp Coverage

Read on for a detailed overview of how workers’ compensation insurance works and why landscapers need appropriate protection.

What is Workers’ Compensation Insurance?

Workers’ compensation insurance provides medical, rehabilitation, and wage replacement benefits to employees who sustain injuries or illnesses arising out of the course of their work.

As a landscaper, your employees may be injured on the job in a variety of ways – back injuries from lifting, bending and digging; lacerations from trimming tools and debris; heat exhaustion, and more.

Workers’ compensation coverage pays for their medical treatment and compensates for a portion of lost wages while injured.

This insurance is mandatory for nearly all employers in the US. Even in states where it is optional, it is critically important. Without workers’ compensation, injured employees could sue your business directly to recover costs. This could absorb hundreds of thousands in legal fees and settlements.

Workers’ compensation laws are determined on a state-by-state basis but have some common elements:

• No-fault coverage – Benefits must be paid regardless of who was at fault for an injury.
• Exclusive remedy – Prevents separate lawsuits against the employer. Workers’ comp is the exclusive remedy.
• Mandatory coverage – Nearly every state requires coverage with few exceptions. Failing to carry this insurance leads to significant fines.
• Employer-financed – Employers foot the bill for all premiums. Employees are not required to contribute.

As the employer, it is your responsibility to purchase adequate workers’ compensation for all your staff and maintain compliance with your state’s guidelines. Failing to do so poses tremendous financial risks to your landscaping business.

Why Do Landscapers Need Workers’ Comp Insurance?

Due to the physical nature of landscaping work, employee injuries are common. Situations requiring workers’ compensation benefits could include:

• Back sprains, hernias, and other muscular injuries from lifting, carrying heavy loads.
• Lacerations or amputations from lawnmowers, chainsaws, pruners, or other cutting tools.
• Respiratory issues like allergic reactions, asthma attacks, or breathing obstructions triggered by irritants.
• Fractures, sprains, or concussions from slip, trip, and fall accidents on landscaping sites which may be uneven, wet, muddy or cluttered with tools and debris.
• Heat strokes, sunburns, dehydration, and other heat-related illnesses due to extensive outdoor work in hot, sunny conditions.
• Insect bites and stings that trigger allergic reactions, which can be severe or even fatal in the case of bees.

Even with robust safety precautions, landscaping projects carry inherent risks on a daily basis. The financial costs of these employee injuries can easily climb into the tens or hundreds of thousands of dollars when medical bills and lost wages add up.

Having proper workers’ compensation insurance coverage is the only way to cover these costs without financial disaster. It helps keep your business afloat if an on-the-job accident occurs by paying for the injury. This insurance is just as crucial as general liability coverage for landscapers to have ironclad protection.

Moreover, nearly every state requires landscapers to carry workers’ compensation insurance on their employees. Even in monopolistic states where coverage must be purchased through a state-run fund, landscapers must still carry this insurance. These states include North Dakota, Ohio, Washington, and Wyoming.

All states require workers’ compensation except Texas and Oklahoma. In Texas, workers’ comp insurance is optional for landscapers. However, ~90% still choose to purchase this coverage to limit liability. If not carried, employees can sue the landscaper directly for injuries. In Oklahoma, workers’ comp is optional for very small employers with 1 or 2 employees, which may apply to some self-employed landscapers or tiny firms. Firms with more than 2 employees must carry comp insurance in Oklahoma.

The vast majority of landscapers are required to carry workers’ compensation insurance on their staff in nearly every state. Only a small subset of solo self-employed landscapers or micro firms may potentially not be required in Texas and Oklahoma depending on size. However, even in these two states coverage is still highly recommended to avoid lawsuits. Every other state mandates workers’ comp.

What Does Workers’ Comp Insurance Cover for Landscapers?

Workers’ compensation insurance policies are designed to accomplish two things if an employee is hurt while working:

1. Pay the employee’s medical bills and directly related expenses. This includes hospital fees, physical therapy, doctor visits, prescription medications, medical equipment, home health care, and any other medical costs stemming from the work injury. There are no caps or limits on the amount of medical coverage provided.
2. Reimburse a portion of the employee’s lost wages while they recover. The specifics on wage reimbursement percentages and duration limits depend on individual state laws. Most states cover around 2/3 of the employee’s average wages up to state maximums.

Additional benefits covered may include:

• Death benefits for surviving dependents if an employee passes away due to a workplace injury or illness. Most states provide both burial costs and wage replacement.
• Vocational rehabilitation to help injured employees transition back to work or train for a new occupation if they cannot continue landscaping work due to permanent disability.
• Mileage reimbursement for trips to doctor appointments and medical facilities.

Workers’ compensation is intended to cover all reasonable and directly related medical, rehabilitative, and wage replacement costs to help the injured employee fully recover and get back to work if possible.

It’s important to understand workers’ compensation insurance only applies to injuries occurring within the scope of employment. Key exclusions to be aware of include:

• Injuries occurring outside of work hours or off company premises. There must be a clear connection to work duties.
• Pre-existing health conditions that are aggravated or exacerbated by work activities. The injury itself must arise out of employment.
• Intentionally self-inflicted injuries such as suicide attempts and self-harm activities.
• Injuries occurring when an employee violates policy such as fighting, committing crimes, or intoxication at work.
• Ordinary diseases of life like colds, flu, allergies etc. that are not caused solely by work duties.
• Gradual hearing loss or repetitive motion injuries that occur slowly over time. These may be disputed by insurers.

Any gray areas or disputes will be evaluated on a case-by-case basis. But in general, workers’ compensation insurance covers only identifiable injuries resulting from the employee’s job duties. Other key coverages like health insurance help fill gaps that workers’ comp does not address.

What Does Workers’ Comp Insurance Cost for Landscapers?

Workers’ compensation insurance costs vary greatly by state since each state governs the specifics of coverage required within its borders. Rates are also driven by the classification or risk-level of the landscaper’s employees. Landscapers are generally classified under code 0042, which is a moderately high risk occupation class.

Landscapers can expect to pay between $1.25 – $8+ per $100 of payroll towards workers’ compensation premiums. That said, in places like California, New Jersey, and New York where benefits are robust and medical costs are high, base rates and premiums tend to be above average. Meanwhile, states like Texas, Arkansas, and Kentucky have lower rates thanks to fewer mandates and regulations. But even within states, landscapers’ premiums reflect individual risk factors.

How Class Codes Impact Landscaper Workers’ Comp Premiums

The National Council on Compensation Insurance (NCCI) manages classification codes used by insurers to categorize occupational hazards and injury likelihood when rating workers’ compensation policies. The NCCI assigns codes to various industries and jobs reflecting historical loss data on injury frequency and severity.

Common NCCI class codes for landscaping include:

• 0042 – Landscape Gardening
• 9102 – Lawn Care

Insurers rely on these NCCI class codes to determine baseline rates used to calculate landscaping premiums, paired with variables like payroll and past claims. Accurately selecting codes encompassing your work activities without overpaying for irrelevant higher risk activities is key for optimizing workers’ comp costs.

For example, Code 0042 for landscape gardening carries a meaningfully higher base rate assumption than Code 9102 for lawn care and both are much greater than back office clerical staff. Matching employee duties to the proper classifications prevents inflated premium expenses exceeding your actual risk levels.

Now let’s examine another major variable that can greatly impact premiums – your past loss history.

The Experience Modifier Multiplies Premiums Based on Claims

A major variable influencing workers’ comp premiums is called the experience modifier. Often abbreviated as EMR, it compares your past claims to averages for similar firms. EMR is calculated as a number typically between 0.75 – 1.25, with 1.00 representing industry baseline claims levels.

EMR multiplies other premium components like base rates and payroll estimates. For instance, an EMR of 0.90 would reduce a $100,000 premium by 10% to $90,000. However, a 1.15 EMR inflates that premium by 15% to $115,000. Small EMR differences significantly impact costs.

Controlling EMR over time by preventing injuries and effectively managing claims is a primary cost reduction approach for conscientious landscapers.

Payroll Estimates Drive Premium Costs

Insurers also rely heavily on your estimated total annual payroll or employee compensation to calculate workers’ comp policy premiums. Rating rules apply pre-determined rates per $100 of payroll for your risk class exposures.

For example, you may have a code 0042 rate of $25 per $100 of payroll. Insurers multiply this rate by your payroll estimate to derive premium costs.

Payroll generally encompasses anticipated 12-month employee compensation including wages, bonuses and benefits. Estimates often use prior year payroll as a baseline, sometimes adding a growth percentage. Regional pay differences influence amounts as well.

Properly categorizing payroll across multiple risk classes for field staff vs administrative employees ensures accurate premium tiering. Don’t overpay higher rates for work not performed. Let’s look at how these variables combine to determine actual premium costs.

Workers Compensation Premium Formula

Workers’ compensation premiums derive directly from this core formula:

Premium = (Payroll / 100) x Base Rate x EMR

• Payroll is total estimated annual compensation
• Base Rate comes from NCCI class codes
• EMR is the loss history modifier

Higher values input for payroll, base rates and EMR raise overall premium expenses. However, diligent landscapers can manage these variables through workplace safety programs, payroll controls, and effective claims management. Now let’s compare relative workers’ comp costs across different states.

Why Landscaping Has Significantly Higher Workers’ Comp Premiums

The nature of landscaping exposes workers to a number of accident and injury risks every day. Key exposures leading to frequent insurance claims in this sector include:

• Lifting strains from moving heavy loads repeatedly like soil, tools, mowers
• Operating injury hazards with sharp blades, moving parts that can cut or entangle hands/fingers
• Exposure to toxic or corrosive chemicals leading to rashes, burns or poisoning
• Respiration issues like asthma onset from organic matter, fumes, allergies
• Motor vehicle crashes traveling between client properties
• Slips, falls and impact injuries on uneven terrain, unstable surfaces

The greater likelihood for both minor and serious employee injuries means landscaping endures far more frequent workers’ compensation claims than administrative sectors. This directly results in significantly higher base premium rates levied on landscaping payrolls by insurers.

For example, a typical base rate across states for clerical work may be around $2 per $100 of payroll. But for landscaping, the base rate often exceeds $20 per $100 of payroll – 10 times higher!

Greater risk of injuries and compensation payouts mean far higher premium multipliers get applied to landscaping payrolls. Robust safety protocols are absolutely critical for landscape companies to control risks and expenses. Now let’s review how class codes, loss history, payroll and inherent risks drive up landscapers’ workers’ comp costs.

Landscaper Workers Compensation Premium Calculator

To estimate your potential workers’ compensation premium costs based on your landscaping business’ unique parameters, use our interactive Landscaper Premium Calculator:

By inputting key variables like your estimated annual payroll, employee class codes, your current or projected EMR, and growth estimates, the calculator will generate an indicative premium range you can expect based on typical rating formulas and industry benchmarks.

This allows landscapers to model different payroll, EMR, and classification scenarios to understand how policy variables and risk management impact potential premium costs. Comparing the calculator’s rate estimates against actual quotes from insurance carriers can help you negotiate the optimal workers’ comp policy rate for your business.

Keep in mind projections are estimates only, and you should validate all policy details with insurance providers before purchasing coverage. But using the Landscaper Premium Calculator gives you a powerful starting point to forecast and control workers’ comp costs based on your firm’s risk profile.

Comparing Workers’ Comp Rates for Landscapers by State

Workers’ compensation premium factors often have major differences across states. Understanding and anticipating geographic variables allows appropriate insurance budgeting.

Below we’ve compiled indicative cost ranges by state for both landscaping employees and per $100,000 in payroll, based on typical premium rates for a blend of Code 0042 and Code 9102 across the US:

Table 1 – Typical Workers’ Comp Cost per Landscaper Employee

Table 2 – Typical Landscaper Workers’ Comp Cost per $100K Payroll

What Can Landscapers Do To Reduce Workers’ Comp Costs?

As a substantial fixed cost, controlling workers’ compensation premiums is important for landscapers. The most impactful way landscapers can reduce their workers’ compensation costs is to focus on safety. Preventing workplace injuries before they happen saves significant money. Maintaining thorough safety protocols and a clean loss run history over time can lower your premiums. Some cost reduction strategies include:

• 1 Prevent Claims. By enforcing robust safety protocols such as proper lifting techniques, hazardous materials handling, tool operation, and regular training, you can prevent workplace incidents. This is the #1 way to lower premiums over time because it’s reflected in your Experience Modification calculation (or X Mod). This calculation represents the likelihood your business will have a claim (based on historical claims) and has a direct impact on your premium.
• Providing the right protective gear like back braces, gloves, goggles, hard hats, and hearing protection to mitigate risks. Conduct regular site evaluations to identify potential hazards.
• Training workers to identify spiders, snakes, bees, ticks and plants like poison ivy that are safety or health risks. Have emergency protocols in place for bites and stings.
• Applying sunscreen, providing shade breaks and mandating hydration to prevent heat illnesses which spike premiums. Monitor weather forecasts daily.
• Joining regional landscaping associations to access potential group workers’ comp plans. Association plans offered to all members often have discounted premiums.
• Promptly reporting all claims. Late claims can lead to fines from the state and much higher future premiums. Report injuries ASAP even if you are unsure a claim will be filed.
• Partnering with a specialist broker to customize your policy and find potential savings. They can ensure proper classification codes are applied and find applicable discounts.

Understanding Class Codes and Payroll Split for Landscapers

For landscapers, properly classifying employees and managing payroll records is vital to controlling workers’ compensation costs. Landscaping staff generally fall under two main class codes – 0042 for general landscaping duties and 9102 for lawn maintenance.

Being classified under the wrong codes can significantly inflate premiums. For example, a clerical worker wrongly classified as a landscaper under code 0042 could increase costs unnecessarily. Partnering with a specialist familiar with landscaping class codes helps avoid overpaying premiums.

In addition, for employees doing multiple jobs, properly splitting payroll between classifications is permitted in most states. This “labor interchange” must be recorded accurately per hour/day to allow for payroll division. Vague or inaccurate job descriptions can lead to misclassification.

However, clerical staff payroll cannot be divided. There are four standard exception codes including clerical, sales, drafting, and executive duties where splitting is prohibited. Understanding these nuances is key to optimizing workers’ comp costs.

With landscapers, both payroll size and proper classification directly impact premiums. Keeping detailed payroll records, correctly applying codes, and working with experienced agents saves money on workers’ compensation insurance. Mistakes can lead to substantial unexpected costs.

How Can Landscapers Get Tailored Workers’ Comp Insurance?

The workers’ compensation system can be complex to navigate with strict state and federal regulations. Mistakes in classification codes, Experience Mod calculations, and reporting claims can be very costly.

When seeking coverage, partnering with insurance specialists focused on the landscaping trades is highly recommended. Avoid a one-size-fits-all policy from an insurance carrier’s website or call center. Some key benefits of using landscaping trade specialists include:

• Access to top regional and national insurers familiar with landscaping risks who actively write these policies for landscapers. Captive landscaping insurance agents only work with select carriers.
• Compliance expertise to steer you clear of violations and help manage claims appropriately. Confidently handle audits. Mistakes lead to fines.
• Potential access to landscaping trade association plans not available to the general public. Group plans through NALP, PLANET, ALCA etc. can offer discounted rates.
• Policy customization based on your unique mix of employees. Classifying payroll correctly optimizes your rate.
• Bundle discounts when pairing workers’ comp with general liability and other coverages. This lowers insurance overhead.
• Risk management guidance like job site assessments, OSHA advice, and safety program creation. Lower risks lead to lower premiums.
• Claims assistance including investigation, directing medical care, coordinating return to work and settlement. Leave the paperwork to the experts.

The right insurance partner takes the burden of handling complex workers’ compensation requirements off your shoulders. This allows you to focus on landscaping rather than insurance administration. Avoid roadblocks to smooth operation.

Get Landscapers Workers Compensation Quotes from ContractorNerd

Do you need to get workers compensation insurance for your landscaping business? Getting quotes can be a headache, but ContractorNerd makes it easy.

Our online quote tool allows you to get customized workers comp quotes for your landscaping company in minutes. Simply provide details about your business like payroll, employee classifications, and past loss history. Our system will instantly compare quotes from top insurance carriers.

The quotes we provide come with no obligation so you can evaluate multiple options. Once you select a policy, our licensed experts handle the application and setup process to get your business insured quickly.

With ContractorNerd you can:

– Get side-by-side quotes from leading workers comp carriers

– Customize your policy limits and terms

– Add optional coverages like employer’s liability

– Bundle with other business insurance policies

– Speak to a landscaping insurance specialist for advice

Don’t waste time shopping for insurance on your own. Let ContractorNerd make getting workers comp easy! Get obligation-free quotes now to protect your employees and stay compliant with state laws.