Ep. 509 Four Areas of Focus for Landscape Contractors During a Hard Insurance Market
Rancho Mesa's Alyssa Burley and Vice President of the Landscape and Tree Care Group, Drew Garcia, explains the current hard market and highlights four key areas landscape contractors should focus on during this time.
Show Notes: https: Subscribe to Rancho Mesa's Newsletter
Director/Host: Alyssa Burley
Guest: Drew Garcia
Producer/Editor: Megan Lockhart
Music: "Home" by JHS Pedals, “Breaking News Intro” by nem0production
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Transcript
Alyssa Burley: You’re listening to Rancho Mesa’s StudioOne™ podcast, where each week we break down complex insurance and safety topics to help your business thrive.
I’m your host, Alyssa Burley, and today I’m joined by Drew Garcia, Vice President of the Landscape and Tree Care Group with Rancho Mesa. And, we’re going to talk about the four areas the landscape contractors should focus on in a hard insurance market.
Drew, welcome to the show.
Drew Garcia: Alyssa thanks for having me.
AB: So first, let’s talk about the state of the commercial insurance marketplace. Will you explain to our listeners, what are you seeing in the current market?
DG: Yeah, so lots of moving targets here and, you know, depending on where you’re at in the country can change some things a little bit, but in general it’s what we would call a hard market for general liability, auto and umbrella for landscape contracting, whether it's maintenance or construction. Workers' compensation is somewhat bottoming out. We think we're kind of at the bottom of a soft market there. And I don't think there's any indication that all of a sudden, you know, this is going to get super difficult on work comp and rates are going to start to press up. But we do feel like there's starting to be some scrutiny on that line. So we believe we've kind of hit the bottom on work comp.
When you are looking at renewals and underwriting consideration, well, I like to talk about it in terms of two buckets because what can be frustrating to landscape businesses, especially on the general liability, the auto and the umbrella, those difficult lines, is they had no claims, but they're looking at increases of 10, 12, 13, 15%. And that doesn't make sense because they don't have any claims, why is the carrier taking an increase? There's kind of two buckets here for underwriting. You've got market conditions where the market is pressing rates up, so not your own individual loss experience. And then on the flip side, you do have the claims that you've created or the accidents that you've been involved in that could create underwriting consideration for policy renewals. And it's difficult for people to understand because you're like, man, if I have no claims, how can I not consolidate or keep this cost down, but it's really the market pressing those lines up.
So where there can be issue is when you've had activity yourself as a business against a hard market, that can really create some volatility in the renewal and some unpredictability, which is pretty unsettling for everybody, but that's really what we're seeing. And those are kind of the two ways to look at the insurance market for landscape businesses right now.
AB: Okay, so with you being somebody who works with a lot of landscape contractors. What are the four things that they should focus on during a hard market so that they maybe feel like they have some sort of control?
DG: Well, here's where we try to step in in our business with Rancho Mesa and we want our client to know that we know what those things are and we can help you with them. But for those that are listening that don't currently work with us, that are interested and some tips and tricks to help through the renewal; there's nothing that we can wave the magic wand or your rates are down or you're not seeing any change. You're definitely probably going to see some change.
But it would start for us with the renewal process and you want to get ahead of that early. Early would mean probably in that 90 to 120 days before policies expire, that would be the time to start updating information and talking to your agent about the coming renewal, coming up with the strategy, kind of learning maybe what's going on in the market at a higher level for that exact time because things can change quickly. So getting that process started early, which might not make sense to people because maybe historically, if there hasn't been a lot of volatility in rates, you know, you can kind of just take for granted the insurance process and things renew when they renew and you just don't really, you're not too involved, but I would say get involved in that 90 to 120 window would be ideal.
The second piece would be policy structure. So we've had success with our customers where we're combining multiple lines to try to create some economies of scale within the market. And normally with
insurance, you're looking at the package lines that we would call general liability, auto and umbrella. Separate of that, we have work comp and there's places for specialty carriers to write just that business. But in terms of having a hard market on the GL, Auto, and Umbrella, sometimes you can leverage the work comp to create more economies of scale and better buying power within this current market. So that would be a suggestion.
And then from the incident and accident standpoint, these are going to be my next two points, I would say pre-injury, pre-accident, you know, we got to dial in safety programs, ongoing training, and not just for our employee safety so you want to focus on minimizing, you know, injuries for your employees, obviously. But you also got premise liability if you're a maintenance company. You've got liability where you're maintaining facilities for people that could create trip/slip hazards for third parties and your employees need to be trained on how to identify those and properly communicate and document that information to your customer so that you're providing that level of security for your customer and also for the general public and minimizing your exposure.
And then on the other, the last item would be auto. So just like you're training your employees to minimize work related injury, we need to train our drivers so that we're minimizing opportunity for them to get into accidents. And kind of industry standard is run motor vehicle reports annually at your insurance renewal and then kind of deal with issues if they're up at that point. But really where businesses should be focusing is continuous driver monitoring. So they're looking at MVRs throughout the year and also continuous driver training. I would try to avoid check the box when they were hired and we ran them through a series of trainings which is a good start, but we got to be ongoing with that and then also managing to things that we're seeing. So if you've got Telematics or GPS or dash cams and those things are telling you that somebody's got some behaviors that could lead to incidents, we got to take that information and train to it. So making sure that you're proactively training your employees. And then let's just say now you've had the accident or the injury. Just that reporting protocol, strict reporting protocol across all types of incidents that can occur. And then detailed accident reports.
The businesses that we see that have success in getting the right information to the insurance carrier quickly and they're detailed with it. Not to say that the outcomes are always better, but you know normally no one's following up multiple times for other information because everything's there from the from they get go and the insurance carriers there to kind of take the hand off and go with it versus you know fumble around a little bit with needing to get more information to get something going. So I would dial in the, a strict reporting protocol and also a very detailed accident investigation, all of things that Rancho Mesa has that we can provide to our clients. But that kind of gives you the sense of pre- and post-injury or accident, things to really focus on to hopefully help prepare you for a better insurance renewal.
AB: Yeah, along those same lines, for pre-injury or pre-accident, we have a lot of trainings that are available in SafetyOne. And then, like you mentioned, we have those accident investigation forms. They're really easy to fill out. They're on the mobile app. Anyone can complete it using a QR code. So there's a lot of tools that are available to our clients if they're willing to use them.
DG: Absolutely. You can kind of liken that to New Year's resolutions. I've been guilty of it too, where I I want to make a big change, and what big change normally means, you know, big impact. So I'm going to look things up. I'm going to hire different people for different, you know, resources that I feel like I need to really attack some goal that I'm all in on all of a sudden, when really there's a lot of resources and opportunity that it's readily available to you. You just got to reach out and ask. And I know that we have the team here that has heard all the different questions in terms of people trying to figure out what it is that they need. And I agree with you, yeah, using resources that are already available to you to help you manage this is super important and we're here for them for that.
AB: Yeah, and oftentimes it may sound or feel overwhelming, but we can show you, “Hey, just try this one thing and see how it works and then we can build on that.”
And like you mentioned, we do have a really good team that's here. You're here, your whole team is available if people have questions. So Drew, if listeners do have questions about their commercial insurance and maybe the marketplace that we're dealing with right now, what's the best way to get in touch with you?
DG: They can email me at drewgarcia@ranchomesa.com and I'll be happy to circle back with them.
AB: All right, well, Drew, thanks for joining me in StudioOne™.
DG: Thanks for having me.
AB: Thanks for tuning in to our latest episode produced by StudioOne™. If you enjoyed what you heard, please share this episode and subscribe. For more insights like this, visit us at RanchoMesa.com and subscribe to our weekly newsletter.