The Challenge of Properly Insuring a Landscape Architect
As a landscape architect, you have unique insurance needs. On one end, you create designs and conceptual drawings that will later guide a general contractor through a build-out. It is crucial to start with insurance that protects you in the event of a design-related lawsuit, whether the design is actually flawed or whether the lawsuit is frivolous.
This design insurance is not enough however, because you also regularly enter clients’ homes, and (depending on the scope of your operation) perhaps do some gardening, or even run a full design/build operation. These features of your business require insurance that protects you in the event of property damage or accidental client injury. The necessity for these two different types of insurance (the design side and the property damage/injury side) is what makes landscape architect insurance so complicated, and reveals why it is so crucial to work with an experienced broker.
One additional detail to consider, which makes these types of policies even more interesting: What is the relationship you have with the general contractors, tradespeople, and gardeners who build and install your designs? Does the general contractor hire you directly, or are you hired by the homeowner? Do the gardeners who install the plants work for you as sub-contractors, or are they hired by the homeowner? Or do you install the plants yourself?
These questions are critical, because they help determine which coverages need to be included and which are unnecessary. For example, if you hire on a sub-contractor to install the plants, we would need to make sure that work done “on your behalf” is not excluded from the policy. If, however, you never hire any sub-contractors, and you leave the hiring of tradespeople to the general contractor and the homeowner, then we can leave extra coverages for sub-contractors out of your policy, which will likely make it cheaper.
The real point is this: tailor your insurance contract to match your actual operation, so that you get all the coverages that you need, and none of the ones you don’t. Bottom line: you want any legitimate claim you file to be paid by the carrier. The best way to achieve that outcome is to craft a policy that takes all facets of your business into account.
Building a Complete Policy
In order to fully protect a landscape architect, the insurance policy will likely need to contain all of the following:
- Errors and Omissions Insurance
- This is essentially lawsuit insurance. If you are ever roped into a lawsuit, whether it’s frivolous or valid, in most cases E&O insurance will pay for court attendance costs, lawyers fees, as well as damages you are ordered to pay. This insurance is designed to covers costs that arise from honest mistakes and litigious clients.
- Example A: You complete a design for a homeowner in Los Angeles, who then hires a general contractor to build the garden according to your design. However, during construction the G.C. accidentally breaks a water pipe and floods the house. The homeowner sues both the G.C. and you, claiming that your design was partially to blame for the accident. Though your design was fine and you were not to blame for the accident, you still must hire an attorney, travel to L.A., and appear in court to clear your name. Your errors and omissions insurance covers the legal fees and travel/hotel costs for the duration of the lawsuit, even though the lawsuit was frivolous.
- Example B: An error in one of your designs is not detected until the garden’s construction has already begun, causing delays and thousands of dollars in extra construction costs. Your client is forced to pay these costs to the G.C. in order to complete the job, so the client later sues you for the extra costs, claiming it was your mistake that caused the mishap. Your E&O insurance pays for your legal fees, court costs, and the settlement you reach with the disgruntled client.
- General Liability Insurance
- While E&O covers your “professional” work (designs, drawings, etc), a general liability policy pays in the event that you physically injure someone or damage property. This is worksite insurance, and more often than not a general contractor will require you to carry general liability insurance before you are even allowed on a job site. The larger the project, the more common this requirement will be.
- Example A: You are visiting a job site where a large backyard is under construction, and while walking with the homeowner you both slip down a muddy hill and fall 8 feet into a trench. The client breaks her leg, and claims that you are liable for the injury. Your general liability policy pays for the legal fees and whatever damages or settlement you reach with the injured client.
- Example B: If you run any sort of design/build operation, or even offer gardening services, a general liability policy is crucial for any random accident that could lead to bodily injury or property damage. A child grabs your gardening shears, a tool accidentally breaks a window, a misplaced dig severs a pipe, etc etc. A standard G.L. policy would cover any of these claims up to a $1 million! Without that policy, you pay out of pocket. So for any business owner who finds him/herself in a clients home, a G.L. policy is critical.
- Anything else?
- If you have employees, you need workers comp. If you have a work vehicle, you need commercial auto. If you hire subcontractors, you need a broker who will show you how to check their insurance, so you know that if they make a mistake it won’t cost you your business. If you are a sub-contractor yourself, you need a broker who can make sure your policy satisfies the typical insurance requirements most general contractors ask for (additional insured endorsement, waiver of subrogation, etc). Whatever your operation looks like, there is a policy out there that will cover you fully.
The first step is always a conversation with an experienced broker. If you need insurance and want to make sure you get a policy that is tailored to fit your operation perfectly, please reach out. If you have any questions we haven’t answered yet, we are happy to chat.
If you are an established landscape architect and you’d like to learn more about what your current policy language actually means, reach out for a free review of your insurance contract. Even if you aren’t our client, we want to help you understand your current coverage, and make sure that you are getting what you really need out of your insurance policy.
