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Insurance and licensing for a new business

Having the right insurance types is the most important paperwork I have done as a small business owner. With this taken care of I can focus on the fun part – landscaping.

When my brother Erik and I took over our father’s landscape business, we were excited to keep the family business going. We had a built-in client base, some equipment and years of expertise. What we did not have was our paperwork in order. My dad was great at many things – but not paperwork and insurance.

Registering the business

The first thing we had to do was to figure out what was best for us when registering our business. There are a lot of options out there and with each one comes advantages and disadvantages with taxes and insurances. We looked at S-Corp and LLC partnerships for our business, and we discussed both options with our CPA and a licensed agent from Progressive Commercial Insurance. With our landscape company and dual ownership, an S-Corporation ended up being the right fit for us. Since everyone’s situation is different, I would suggest researching online (the website is a great resource) which is best for your company. We found that this decision was one of the most important you can make and would impact your end-of-year taxes and insurance.

Getting the right insurance

Now that E. Lambton Landscaping, Inc. was created it was time to get all the right insurance types lined up. This may seem unnecessary now if you are just starting out, but it won’t be when you accidently shoot a rock through a sliding glass door (this has happened, and thankfully with our insurance it was covered, because it was extremely expensive to replace).

To set up the right insurance types, make an appointment with your insurance company. We called Progressive Insurance and set up a meeting to find out what we needed to be in line with the laws of our state and to make sure we were covered in case of an accident.

The first step was to get general liability insurance. This is important as it covers your company from accidents like shooting a rock through a window to dropping a tree on a fence. The amount you pay depends on your location, number of employees and the risk factor of the type of work you do. Once all these variables were calculated, we were in business with our general liability insurance.

Next was to set up a workers compensation policy. Since landscaping can, at times, be a dangerous profession, this is an important policy to get. Most states require a workers comp policy to be in business. This will cover you and your employees from work-related injuries by providing medical treatment and payment from lost time at work or disability due to injury. It will also protect me, as an owner, from being sued by one of my employees.

The last step is commercial auto insurance, to cover our trucks, cars and trailers. Since these are the biggest investments you can make in your business, it is important to get the right coverage. Then, if a vehicle goes down, it won’t bring your business to a standstill.

When I took over my dad’s landscaping company, I was excited to be able to carry on the business he started. I did not realize how much work it was going to be and how much I was going to have to pay each month in overhead costs. It may seem like a lot until you need it. Having the right insurance types is the most important paperwork I have done as a small business owner. My company, its vehicles and our employees are all covered in case of an accident. With this taken care of I can focus on the fun part – landscaping.

This information is provided for informational purposes, may not be applicable to all situations, and is not intended to provided legal, tax, or financial advice. For specific advice about your unique circumstances, you may wish to consult a qualified professional.