Rancho Mesa's Alyssa Burley and Vice President of the Landscape Group Drew Garcia talk about installation floater gaps in coverage.

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Director/Host: Alyssa Burley

Guest: Drew Garcia

Producer/Editor: Megan Lockhart

Music: "Home" by JHS Pedals, “News Room News” by Spence

© Copyright 2023. Rancho Mesa Insurance Services, Inc. All rights reserved.

transcript

[Introduction Music]

Alyssa Burley: Hi! This is Alyssa Burley with Rancho Mesa’s Media Communications and Client Services Department. Thank you for listening to today’s top Rancho Mesa news brought to you by our safety and risk management network, StudioOne™. Welcome back, everyone. My guest is Drew Garcia, Vice President of the Landscape Group with Rancho Mesa. Today, we're going to talk about installation, floater gaps in coverage. Drew, thank you for joining me.

Drew Garcia: Alyssa, thanks for having me.

AB: Now, landscape contractors have varying levels of exposure when it comes to installation projects. How can virtually all share the same common coverage gaps for trees, plants, shrubs and lawns?

DG: Yes. So, landscape companies, there's a number of different installations that they do. And depending on the type of business that they have, whether they're just primarily a construction company that's maybe doing heavier installs or a maintenance company doing softer installs like landscape enhancement, where they're just doing minor plantings of, you know, trees and little plants and shrubs. They all have the same exposure. So, an installation floater is a coverage within an inland marine policy, and it's going to pick up coverage for product that the landscaper temporarily has possession of that they're going to install into the jobsite.

AB: Okay.

DG: So, some examples of that would be drainage, irrigation, maybe landscape lighting, but primarily plant materials. So, we're talking about plants, trees, shrubs and then maybe sod if they're putting in a lawn or something. And what is confusing to many landscape contractors, and I don't think they really realize it, is that basically all installation floater policies exclude coverage for plants, shrubs, trees and lawn. Which is contradicting to why they're buying the insurance, because that's primarily what they're trying to cover. And it's a common exclusion because most carriers use the same policy form when they're putting that coverage in place. And you just have to read the details of the policy to realize, oh, my goodness, that's not providing the coverage that I need, which is why, obviously it's a big deal. And we're talking about it.

AB: Yeah. So, where would an installation floater be applicable?

DG: You got to think of the times where the contractors temporarily going to have possession so, you could have some exposure at your yard if you're storing some material at your yard waiting to go out to the job, or if you're transporting material to a job site to be installed, if there's some disruption or an accident and the product goes flying out of the truck.

AB: And we've seen that on the freeway.

DG: We’ve seen that on the freeway, that's an issue. Stored temporarily at the job site I think is the most glaring one. That's what a lot of people think about when they are concerned about theft or some type of damage, either by fire or something like that, that burns up the material that's on the job site that they were going to install. Or even, you know, in the course of installation, if something gets damaged while they're trying to put a big tree in the ground and now the client no longer wants to accept the product because it's been damaged, there's some exposure there for landscape companies. So, a number of different areas, that's why it's kind of floating throughout the operations.

AB: Okay, well, that makes sense. What should a landscape contractor consider when looking at their installation floater limit?

DG: Again, going back to kind of the specifics of the operations. Construction companies, it's going to be a heavier exposure. It's going to be more of a cost because primarily what they're doing on the maintenance side, if they're just doing an enhancement, it’s probably going to be lighter. But they really just want to ballpark their average job. So, that's going to consider material cost and then labor cost. And that's basically how you're going to come up with the ability to set the limit for the policy. And then that number is not set in stone, but it kind of- you want it to catch basically all of your common install exposure. And then if you have a big project that comes up that's higher than what you normally do, you can always call your insurance agent and bump it up for the job.

AB: And that's easy enough to do?

DG: Yeah. Email, phone call and we can, you know, reach out to the underwriter and adjust the limits for that specific job if that's what they need to do and then bring it back down to that floating limit once the job's complete. So, that's an easy way to set that up. And then you'd want to know from the insurance agent if the policy's written on a blanket coverage basis or a schedule location. We like to use blanket because it's going to provide coverage for all installation products throughout the course of the policy, no matter really where the location is located, the location specific ones, a little bit too specific for us. And we know that our customers are doing a number of install jobs throughout the year. So, we used a blanket version.

AB: Yeah. So, what do you recommend the landscape contractors do to ensure that they don't have a gap in their coverage?

DG: A lot of what we're doing right now at our pre renewals, we're talking about the impact on material cost with, you know, inflation and with the backlog of surplus on shortages on material. So, the increase in material is just up and up and up.

AB: Yeah.

DG: And if we're leaving that limit the same year over year over year, we're missing to pick up inflation in the cost of that material that's increased. So, paying attention to your cost and making sure that you're allocating the right number to the insurance each year, wage inflation is impacting labor cost. So, you need to make sure that you're accounting for that and reevaluating that exposure each year. So, that's what we're talking about, our pre renewals or making sure that limits set adequately.

AB: Okay. And Drew, if listeners have questions about their installation floater or any of their policies, what's the best way to get in touch with you?

DG: Reach out to me via email. My email is drewgarcia@ranchomesa.com

AB: Now, do you want to do some quick questions?

DG: Yeah.

AB: All right. So, hiking or snowboarding?

DG: Hiking, hiking for me for sure. Snowboarding, just because we're talking about I've got to drive to like Big Bear would be the closest spot. And I don't feel like getting in the car and driving that far. So hiking.

AB: Okay, so football or hockey?

DG: Wow. Okay.

AB: ‘Cause I can't say baseball.

DG: Right. Yeah, exactly. You know, that one's going to go. I would say, I actually I've only been to I've been to one professional hockey game and I really enjoyed it. It was when I was in Arizona and I went to an NHL game and didn't know what to expect. But I really did like the pace of play and it was cold in the arena and I thought that that was kind of cool. And I have been to a few Charger games when they were here. A little sour on the Chargers now, so I'll say hockey from San Diego. I'll say hockey.

AB: All right. So, this might be an easy one. Sunny days or rainy days?

DG: Oh, my goodness. Sunny days. Yeah. And we've had four rainy days here, I think, in a row. And I am feeling it. So, I am all about the sun. I need that vitamin D.

AB: All right. Pants or shorts.

DG: Weekend or where are we at? You know, I would. I'm probably normally in pants. Yeah, only pants.

AB: Okay, that’s all I have.

DG: Oh, well, all right. Very cool. Nice. Yeah. Good stuff.

[Outro Music]

AB: All right. Well, thank you so much for joining me in StudioOne™.

DG: Thanks for having me.

AB: This is Alyssa Burley with Rancho Mesa. Thanks for tuning in to our latest episode produced by StudioOne™. For more information, visit us at ranchomesa.com and subscribe to our weekly newsletter.