Most landscaping companies carry liability insurance.

They may have General Liability Insurance for customer injuries and property damage, Commercial Auto Insurance for vehicle accidents, and Workers’ Compensation Insurance for employee injuries.

But what happens when a serious claim costs more than the limit on one of those policies?

A company truck pulling a trailer causes a multi-vehicle accident. A pedestrian suffers a severe injury at a job site. A fire or property-damage claim affects several homes. A landscaping company is sued following a catastrophic accident involving an employee or vehicle.

The underlying insurance policy may respond, but only up to its limit.

Once that limit is exhausted, the landscaping company may be responsible for the remaining amount.

That is where Commercial Umbrella or Excess Liability Insurance comes in.

In this article, we’ll explain how umbrella and excess liability coverage work, why landscaping companies may need higher liability limits, which policies may sit underneath an umbrella, common claim scenarios, and what business owners should review before purchasing additional protection.

Why Landscaping Companies May Need Higher Liability Limits

Landscaping work creates several types of liability exposure.

Crews work around:

• Homes
• Apartment complexes
• HOAs
• Commercial buildings
• Vehicles
• Pedestrians
• Utilities
• Schools
• Municipal properties
• Expensive landscaping and outdoor features

Employees also drive trucks, pull trailers, operate equipment, and travel between job sites throughout the day.

Most claims may fall comfortably within the limits of a standard policy. However, a severe claim can become much larger than expected.

The cost of a serious accident may include:

• Emergency medical treatment
• Surgery
• Long-term rehabilitation
• Lost income
• Permanent disability
• Property replacement
• Legal expenses
• Settlements
• Court judgments
• Multiple injured parties

A $1 million liability limit may sound substantial, but one serious vehicle accident or bodily injury claim can exceed it.

An umbrella or excess liability policy provides an additional layer of protection above certain underlying insurance policies.

What Is Commercial Umbrella Insurance?

Commercial Umbrella Insurance provides additional liability limits after the limit of an underlying policy has been exhausted by a covered claim.

For example, imagine a landscaping company carries:

• $1 million in Commercial Auto liability
• A $2 million Commercial Umbrella

A severe auto accident results in a covered $1.6 million liability claim.

The Commercial Auto policy may pay the first $1 million. The umbrella may then respond to the remaining $600,000, subject to its terms, exclusions, and limits.

Without the umbrella, the landscaping business could be responsible for the amount exceeding the auto policy’s limit.

What Is Excess Liability Insurance?

Umbrella and excess liability are often discussed together, but the terms do not always mean exactly the same thing.

An Excess Liability policy usually provides additional limits above a specific underlying policy and generally follows the terms of that policy.

A true Umbrella policy may provide broader excess protection over several underlying policies and, in some cases, may cover certain claims not covered by an underlying policy.

However, the word “umbrella” does not guarantee broader protection.

Policy wording varies significantly. Some policies marketed as umbrellas operate more like follow-form excess policies.

Landscaping companies should focus less on the policy’s name and more on:

• Which policies it covers
• Which operations are excluded
• When the additional limit applies
• Whether the umbrella follows the underlying coverage
• Whether it contains additional exclusions
• Whether defense costs reduce the limit

Which Policies Can an Umbrella Sit Over?

A Commercial Umbrella may provide additional limits over several underlying policies.

These commonly include:

• General Liability
• Commercial Auto Liability
• Employer’s Liability

Employer’s Liability is normally included as part of a Workers’ Compensation policy. It addresses certain employee-injury lawsuits that fall outside the ordinary workers’ compensation benefit system.

Depending on the insurer and policy, an umbrella might also be able to sit over other liability coverages.

However, business owners should never assume that every liability policy is included automatically.

Specialized policies may not be covered unless they are specifically scheduled and accepted by the umbrella carrier.

These may include:

• Pollution Liability
• Professional Liability
• Employment Practices Liability
• Cyber Liability
• Directors and Officers Liability
• Liquor Liability

If a landscaping company wants excess limits over one of these policies, that should be discussed before coverage is purchased.

How Does an Umbrella Policy Work?

An umbrella policy usually requires the landscaping company to maintain certain minimum limits on its underlying policies.

For example, the umbrella carrier may require:

• $1 million in General Liability
• $1 million in Commercial Auto Liability
• Specific Employer’s Liability limits

These are sometimes called required underlying limits.

If the business purchases lower limits than required, cancels an underlying policy, or allows coverage to lapse, the umbrella may not simply drop down and replace the missing coverage.

The business could be responsible for the gap between the actual underlying limit and the limit that should have been maintained.

That is why the underlying policies and umbrella policy need to be managed as one coordinated program.

Common Umbrella Claim Scenarios for Landscapers

Multi-Vehicle Accident

A landscaping truck pulling a loaded trailer causes a highway accident involving several vehicles.

Multiple people are injured, and several vehicles are damaged.

The total claim includes:

• Medical bills
• Lost wages
• Vehicle damage
• Legal expenses
• Claims from several injured parties

The Commercial Auto Liability limit is exhausted.

A Commercial Umbrella may provide additional coverage after the auto policy reaches its limit.

For many landscaping companies, commercial auto exposure is the strongest reason to purchase an umbrella.

Pedestrian Seriously Injured by Equipment or Debris

A mower throws an object that strikes a pedestrian and causes a severe injury.

The injured person requires surgery, misses work, and claims permanent impairment.

General Liability may respond first. If the claim exceeds the General Liability limit, the umbrella may provide additional protection.

Trailer Detaches and Causes Catastrophic Damage

A trailer detaches from a company truck and crosses into oncoming traffic.

The accident results in severe injuries and extensive property damage.

Because trailers can significantly increase the severity of a vehicle accident, landscaping companies that regularly tow equipment should carefully evaluate their liability limits.

Fire Spreads to Neighboring Property

A crew performs work that unintentionally contributes to a fire. The fire damages several structures or neighboring properties.

The resulting claim exceeds the company’s General Liability limit.

If the cause of loss is covered by both the underlying policy and the umbrella, the umbrella may provide additional limits.

Employee-Injury Lawsuit

An employee is seriously injured at work. The employee receives workers’ compensation benefits, but another lawsuit involving the employer arises from the incident.

Employer’s Liability may respond, depending on the allegations.

If that limit is exhausted, the umbrella may provide additional coverage if Employer’s Liability is a scheduled underlying policy.

Why Contract Requirements Matter

Larger clients commonly require landscaping contractors to carry specific liability limits.

These clients may include:

• HOAs
• Property management companies
• Apartment complexes
• Municipalities
• Schools
• General contractors
• Retail developments
• Office parks
• Healthcare facilities
• Industrial properties

A contract might require:

• $1 million in General Liability per occurrence
• $2 million in aggregate limits
• $1 million in Commercial Auto Liability
• $1 million, $2 million, or $5 million in Umbrella Liability
• Additional insured status
• Primary and noncontributory wording
• Waivers of subrogation
• Completed operations coverage

An umbrella can help a landscaping company qualify for larger contracts without increasing every underlying policy to the full required amount.

For example, a client may require $2 million in total auto liability. The landscaper might satisfy that requirement through a $1 million Commercial Auto policy and a $1 million umbrella, assuming the contract and umbrella terms allow it.

The contract should be reviewed before bidding or signing.

Umbrella Limits and Policy Aggregates

Most umbrellas have both a per-occurrence limit and an aggregate limit.

The occurrence limit is the maximum the policy may pay for one covered event.

The aggregate is generally the maximum the policy may pay for certain covered claims during the policy period.

For example, a $2 million umbrella may not necessarily provide $2 million for every claim without limitation throughout the year.

Multiple significant claims can reduce or exhaust the aggregate.

Landscaping businesses with larger fleets, numerous crews, or high-value contracts may need more than a basic umbrella limit.

What an Umbrella Policy Does Not Cover

An umbrella is not a policy that covers every business risk.

It generally provides additional limits over covered liability claims. It does not automatically fill every exclusion or coverage gap.

Common areas that may not be covered include:

Damage to Your Own Property

An umbrella does not generally pay to repair or replace the landscaping company’s:

• Trucks
• Trailers
• Buildings
• Tools
• Mowers
• Equipment

Those exposures require Commercial Auto physical damage, Commercial Property, or Inland Marine coverage.

Intentional Acts

Intentional injury, deliberate property damage, fraud, and other intentional misconduct are generally excluded.

Faulty Workmanship

An umbrella usually does not pay the cost to correct the company’s own defective work.

If faulty work causes covered damage to other property, the resulting damage may be treated differently, depending on the underlying and umbrella policies.

Professional Errors

Claims involving landscape design, consulting, drainage recommendations, or other professional services may require Professional Liability Insurance.

A standard umbrella may not sit over that coverage.

Pollution Claims

Pollution exclusions are common.

A landscaping company should not assume its umbrella provides additional limits over Pollution Liability unless the pollution policy is specifically accepted and scheduled.

Employment Practices Claims

Claims involving discrimination, harassment, retaliation, or wrongful termination normally require Employment Practices Liability Insurance.

A standard Commercial Umbrella often does not provide excess limits over EPLI.

Cyber Claims

Data breaches, phishing losses, ransomware, and privacy claims generally require Cyber Insurance.

They are not normally covered by a standard commercial umbrella.

How Much Umbrella Coverage Does a Landscaper Need?

There is no single correct limit for every landscaping company.

Common Commercial Umbrella limits include:

• $1 million
• $2 million
• $5 million
• Higher limits for larger operations

The appropriate amount depends on the company’s exposure.

Factors to consider include:

• Number of vehicles
• Number of drivers
• Use of trailers
• Vehicle size and weight
• Number of employees
• Annual revenue
• Type of landscaping work
• Commercial versus residential clients
• Contract requirements
• Work near pedestrians or occupied properties
• Subcontractor use
• Prior claims
• Business assets
• Ability to absorb a large uninsured loss

A small owner-operated lawn service may have different needs than a contractor operating multiple crews and vehicles across large commercial properties.

However, even a small company can cause a large accident.

Umbrella coverage should be evaluated based on potential claim severity, not only company size.

How Umbrella Premiums Are Calculated

Insurance carriers may consider:

• Underlying General Liability premium
• Commercial Auto premium
• Number and type of vehicles
• Driver records
• Payroll
• Revenue
• Employee count
• Claims history
• Type of work
• Trailer and equipment exposure
• Requested umbrella limit
• Subcontractor exposure
• Geographic territory
• Contract requirements
• Whether specialized policies are included

Commercial Auto exposure frequently has a major effect on umbrella pricing for landscaping businesses.

A company with several trucks, trailers, and employee drivers may pay more than a company with limited road exposure.

Follow-Form Coverage and Additional Exclusions

Many excess policies are described as “follow-form.”

This generally means the excess policy follows certain terms of the underlying policy.

However, follow-form does not necessarily mean the policies are identical.

The excess or umbrella policy may contain its own:

• Definitions
• Exclusions
• Conditions
• Notice requirements
• Coverage territory
• Limits
• Reporting requirements

An underlying policy may cover a claim while the umbrella excludes it.

That is why both policies need to be reviewed.

The most important question is not simply, “Do we have an umbrella?”

It is, “Will the umbrella respond over the policies and operations that create our largest risks?”

Additional Insureds and the Umbrella

Landscaping contracts frequently require clients to be added as additional insureds.

Business owners sometimes assume that additional insured status automatically extends through every layer of coverage.

That may not always be true.

The landscaper should verify:

• Whether additional insured status applies on the underlying policy
• Whether the umbrella follows that status
• Whether a separate umbrella endorsement is required
• Whether completed operations are included
• Whether the contract requires primary and noncontributory coverage
• Whether the requested wording is available

Certificates of insurance should reflect actual coverage rather than simply repeating contract requirements.

How Landscapers Can Reduce Severe Liability Claims

Umbrella insurance provides additional financial protection, but preventing catastrophic claims is still the goal.

Strengthen Driver Controls

Because vehicle accidents can create the largest claims, landscapers should:

• Review Motor Vehicle Records
• Approve drivers before use
• Prohibit texting and handheld phone use
• Train employees on trailers
• Use backing procedures and spotters
• Maintain vehicles and trailers
• Document accidents promptly
• Consider telematics and dash cameras

Protect the Public at Job Sites

Crews should:

• Keep tools away from walkways
• Use cones or signs when appropriate
• Stop work when pedestrians enter dangerous areas
• Inspect for rocks and debris before mowing
• Maintain distance from vehicles and windows
• Control access around active equipment
• Report property damage immediately

Use Written Contracts

Written agreements should clearly define:

• Scope of work
• Responsibilities
• Insurance requirements
• Indemnification provisions
• Subcontractor requirements
• Damage-reporting procedures
• Additional insured obligations

Contract provisions should be reviewed by an attorney.

Manage Subcontractors

Subcontractors can create severe liability exposure.

Landscapers should collect and review:

• General Liability certificates
• Commercial Auto certificates
• Workers’ Compensation certificates
• Umbrella certificates when required
• Pollution coverage when applicable
• Written subcontractor agreements
• Additional insured endorsements

Do not assume a subcontractor’s umbrella automatically protects the landscaping company.

Report Incidents Early

Potentially serious incidents should be reported promptly to the appropriate carriers.

Late reporting can make investigation and defense more difficult.

The business should notify both the underlying insurer and umbrella carrier when a claim could reasonably exceed the underlying policy limit.

Where Umbrella Coverage Fits in the Insurance Program

A landscaping insurance program may include:

• General Liability
• Commercial Auto
• Workers’ Compensation
• Inland Marine
• Commercial Property
• Pollution Liability
• Professional Liability
• Cyber Insurance
• Employment Practices Liability
• Commercial Umbrella or Excess Liability

The umbrella sits above selected liability policies. It does not replace them.

The strongest insurance programs are coordinated so that:

• Required underlying limits are maintained
• All major operations are disclosed
• Specialized exposures are addressed separately
• Contract requirements are reviewed
• The umbrella covers the intended underlying policies
• Limits match the company’s potential claim severity

Add Another Layer of Protection

At Craddock Insurance Services, we help landscaping companies and green industry contractors across Georgia evaluate not only whether they have insurance, but whether their limits are strong enough for the risks they face.

If you are:

• Operating trucks and trailers
• Adding employees or crews
• Pursuing larger commercial contracts
• Working for HOAs or property managers
• Required to carry higher liability limits
• Concerned that a major claim could exceed your current policy
• Unsure which policies your umbrella actually covers

It may be time for an umbrella and excess liability review.

One serious accident can exceed the limits of an otherwise well-designed insurance policy.

Contact Craddock Insurance Services to make sure your underlying policies and excess limits work together before a catastrophic claim puts your business and assets at risk.