When you’re running a landscaping or lawn care business, one of the most crucial questions you can ask yourself is: do I need workers’ compensation insurance?
Frankly, with workers’ comp, there’s little to no gray area. By most states’ statutory law, you’re required to have it if you have employees.
Hiring people without workers’ compensation insurance can bring on all sorts of legal problems – including severe fines and penalties, or even jail time.
Apart from that, there are lots of practical benefits to having workers’ comp.
It protects your employees if they get sick or injured working for you. It covers their medical fees and lost wages. And it saves you the considerable expense of having to pay for them yourself.
Workers’ comp guidelines for landscaping and lawn care firms
Something we get asked a lot is: what are the workers’ comp guidelines for my landscaping or lawn care company? Do I still need workers’ comp if I’m the sole proprietor of my business?
Well, first, you should familiarize yourself with your own state’s laws and regulations. Then consider how you run your business and what insurance you might need.
If you work solely on your own and for yourself then, by law, you might not need workers’ compensation insurance. Although you might want to protect yourself with other types of landscaping or lawn care insurance, like general liability or tools and equipment coverage.
However, you’ll very likely need workers’ comp if you employ anyone other than yourself, including:
- Employees (full-time and part-time)
- Temporary workers
- Self-employed and payroll employees
- Volunteers and interns.
Why do landscaping and lawn care companies need workers’ compensation insurance?
Apart from it being a state law requirement, you mean?
If you’re running a busy landscaping or lawn care firm, then you’ve probably got a few projects lined up where you’ll need more than a single pair of hands to get the job done.
That means hiring people to work under your supervision…possibly also using your equipment. Which makes you responsible for their safety and welfare.
Take this scenario:
One of your employees complains of a strange ringing in their ears after they’ve spent a good chunk of the afternoon drilling into some concrete. Later, they go to hospital and find out they have tinnitus. The consultant gives them a hearing aid and recommends they take some time off work.
In this case, the employee could claim the ear guards you supplied them with weren’t fit for purpose and demand compensation. At the very least, they may want reimbursement for their medical treatment and lost wages.
What’s more, if your employee takes you to court and sues you, you can bet your bottom dollar you’ll be left facing some pretty hefty legal bills.
But if you’ve protected your landscaping firm with workers’ compensation insurance, claims like this don’t have to break the bank.
So long as your worker’s injury’s covered, your insurance pays out for any court costs and legal fees…as well as medical expenses or compensation owed to your employee.
Do I need workers’ compensation insurance to hire subcontractors?
Before we tackle this, let’s look at some of the key differences between contractors and sub-contractors (for a more detailed guide by us, see here).
If you’re the owner of a landscaping or lawn care firm, then chances are you’re a contractor.
That means your client hires you to complete a project for them (often after signing a contract setting out the terms of the arrangement). You’re not on their payroll and you’re still free to take on projects for other clients.
As a contractor, you might also hire a subcontractor to help you out, especially if specialist skills are needed to finish a particular landscaping or lawn care job.
Subcontractors can operate as individuals or as a company. Either way, they report to you and not your client. You supervise their work and pay them once they’ve completed it.
Does working with subcontractors affect my workers’ comp?
Landscaping and lawn care contractors aren’t usually required to carry workers’ compensation insurance for any subcontractors they work with. They might work under your supervision and use your equipment but they’re not generally considered to be your employees.
However, you should double-check the rules with your own state’s Department of Labor. The legal definition for what an ‘employee’ is can vary and the penalties for getting it wrong are severe.
Also, some states might require you to carry workers’ comp even if your subcontractors already have their own policy. So, it’s always best to check.
How else is workers’ compensation insurance good for landscapers?
Don’t forget, your workers’ comp policy is there to protect you too.
Because you’re off their payroll, your client’s not obliged cover your medical expenses if you hurt yourself on their property. They might even insist you show them a certificate of insurance before you start working for them, to cover their own back.
The same applies if you’re a landscaping or lawn care subcontractor. To protect themselves, the contractor who hired you might insist on you having your own workers’ comp policy.
Remember, workers’ compensation covers you for the exact same things as it would your own employees. It means that if you get sick or injured and have to fork out for medical treatment or cancel a load of projects, your income won’t suffer.
Risk management tips for landscaping and lawn care companies
Lastly, even though workers’ compensation insurance is crucial when hiring new employees, you should also have certain safety procedures set up to protect them. Plus reduce your chances of encountering a claim in the first place.
For example:
- Supplying your employees with the right safety gear (especially when working around trees or using pesticides)
- Training new recruits on how to use your equipment
- Regularly maintaining your tools and equipment and checking it for safety
- Making sure any subcontractors you work with sign a contract and show proof of carrying their own workers’ comp insurance.
Need workers’ compensation insurance for your landscaping or lawn mowing business?
We can help you out. Read our workers’ comp insurance page for starters, then follow up with a quote. Or simply call us at 978.344.4215.
Image used under license from iStock.
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