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Risk & Liability Issues Affecting Greenhouse Growers, Nurseries & Garden Centers

Risk & Liability Issues Affecting Greenhouse Growers, Nurseries & Garden Centers

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Today’s Agenda

• Intro to NIP Group • Industry Overview • Specific Challenges faced by Greenhouse

Growers, Nurseries, and Garden Centers • Benefits of Specialized Coverage • Overview of the GrowPro Program • Things to Look For, when preparing a submission • Summary • Q&A

About NIP

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About NIP Group

• A “top 100” business insurance and risk management intermediary

• Provide a wide range of brokerage, underwriting, and risk management services

• Entrepreneurial, innovative, and responsive

• Deep knowledge of key markets

• 20+ years of providing agents with exceptional coverage, competitive commissions, and fast, efficient service

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About NIP Programs

• Develop and manage customized business insurance for industries with specialized insurance and risk management needs Custom-tailored coverage for select markets Unique underwriting, loss control, and claims service

models, valued by both clients and insurers Underwritten by major insurers such as Travelers,

Chartis, Argo, AmTrust Market-specific expertise Stability through all market cycles

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Programs

• FuneralPro™ – for Funeral Directors

• GlassPro® – for Glass Dealers and Installers

• GrowPro® – for Greenhouses, Garden Centers and Nurseries

• HVACPro® – for AC, Refrigeration, Heating or HVAC Contractors

• LandPro®/TreePro™ – for Landscapers and Tree Services Providers

• MaintenancePro® – for Cleaning and Maintenance Services

• MedEdge® – Affinity program for Physician Assistants and Optometrists

• PetPro™ – for Pet Care Professionals

• PlumbingPro® – for Commercial Plumbing Contractors

• PowerPro® – for Electrical Contractors

• SignagePro® – for Sign, Display and Awning Companies

• SitePro® – for Excavation, Site Prep and Paving Contractors

• WorkPro – Workers’ Compensation

Industry Overview

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Industry Overview

Major Segments • Greenhouse Growers • Nurseries • Garden Centers

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Industry Overview

Compelling Market Opportunity • Large, highly-varied and fragmented market

Attractive niches across three distinct segments • Target Market represents more than $1.3 billion in premiums • Target market represents nearly 50,000 businesses nationally

Premium ranges by sub segment between $25,000 and $45,000. • Large market size enables a selective underwriter to quickly build a

large program ($25M +)

Profitable Class Underwriting Profile • Profitable nationwide underwriting results for class of business • Known and controllable underwriting exposures with attractive niches • Property and GL-Driven class of business

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Industry Overview

Industry Overview • Green Industry represents nearly 250,000 businesses with > $150 Billion of annual receipts • Employs 1.2 million and generates > $3.6 billion in insurance premiums annually. 1, 2

Market Size • Target accounts primarily in grower and seller (AKA producers and retailers) segments, commonly

referred to as Independent Garden Centers, Greenhouses and Nurseries. • We target accounts of all sizes, from neighborhood garden centers to multi-million industrial

greenhouse operations • Represents more than 50,000 businesses nationally that generate > $1.3 billion in premiums.

Key States • Top Ten States: California, Florida, Texas, Oregon, New York, Illinois, Michigan, Pennsylvania,

New Jersey, and Ohio. • We write in all states, except FL (property) and parts of MA (auto)

Outlook • This industry continues to be one of the fastest-growing sectors in the nation’s economy with

growth rate exceeding the GDP 1 Source: Economic Impacts of the Green Industry – USDA 2005 2 Source: ISO Data

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Segment Relationships

Independent Garden Centers

The Independent Garden Center runs from the local “mom & pop” operation to larger, regional centers, with a primary focus on Retail.

Nurseries Nurseries are places where plants are propagated and grown to usable size. They are usually independent commercial growers, with or without greenhouses. They typically have a mix of retail and wholesale.

Greenhouses

Greenhouses focus on the large-scale production of floricultural products, and represent a significant premium. They are generally wholesale operations with unique property exposures (greenhouses, related equipment) that are often not properly addressed by non-agriculture insurance programs

Landscapers & Tree Services

Many Nursery business also provide Landscape services. We can accommodate incidental exposures.

Hybrids create opportunities for our program because the traditional underwriting approaches of most national and regional carriers are not designed to accommodate the unique exposures of these multi-faceted operations.

NIP’s GrowPro®

An Overview

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Greenhouse Growers

Wholesale Greenhouse Growers

• A Wholesale Greenhouse Grower grows ornamental flowers, plants, shrubs, and trees in controlled environments.

• The grower typically has much higher property values than the nursery grower, along with specialized equipment inside of the greenhouse structure.

• Large growers typically supply plants to big box stores, or on a consignment basis, with significant exposure for stock at non-covered locations.

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Nursery Growers

Wholesale Nursery Growers

• A Wholesale Nursery Grower generally grows plants and trees in open fields.

• We offer limits of up to $250,000 for stock in the open, on a Special Form basis, including wind and hail damage.

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Retail Garden Centers

Retail Garden Centers

• Retail Garden Center are the major customer of the Greenhouse and Wholesale Nursery Grower.

• In addition to flowers , trees and plants, they typically sell fertilizers, seeds, supplies, and small garden tools.

• Garden Centers often have greenhouse structures to house plants held for sale.

• They often have a landscaping division, which presents a unique and different exposure from the typical greenhouse or nursery operation.

NIP’s GrowPro®

An Overview

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The Solution

The Complete Coverage Solution • Commercial General Liability

• Property

• Contractors’ Equipment

• Crime

• Business Auto

• Umbrella

• Workers’ Comp (via WorkPro)

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Program Highlights

GrowPro Coverage • Coverage for buildings,

greenhouses and stock for losses including fire, collapse, windstorms, hail, failure of utility services, and boiler or equipment breakdowns.

• Coverage limits can be tailored to seasonal fluctuations of crop and inventory

• Market value coverage on losses of greenhouse crops and stock held for sale

• Replacement cost coverage on production equipment that’s permanently installed.

• Coverage for business inventory in transit including spoilage coverage for refrigerated inventory while in transit due to refrigeration breakdown

• Coverage for losses of business income for covered perils that interrupt a crop cycle or prevents a new growing cycle during the period of restoration.

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Program Highlights

GrowPro Coverage • Coverage for outdoor plant

inventory held for retail sale up to $250,000, including damage from wind and hail.

• Pesticide/Herbicide Applicators Liability coverage for operations involving off-site application of chemicals.

• Flexible coverage can be tailored for hybrid operations : • Wholesale greenhouse growers that

also have retail garden centers • Wholesale Nurseries that have

landscaping divisions • Garden Centers that have their own

greenhouse or nursery growing facilities

• All lines of coverage, including Property/Liability, Business Auto, Workers Comp, Umbrella, and Nursery Crop coverage

• Assistance with proper valuation of greenhouses. • GrowPro considers the value of equipment

within the greenhouse structure – such as boilers, generators, cooling equipment and watering systems – in establishing the replacement cost of the greenhouse.

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Program Highlights

GrowPro Coverage • Equipment Breakdown –

Coverage for sudden and accidental breakdowns, including power line surges, overloads, short circuits, motor burnout. • Costs associated with losses to building

equipment such as costs to repair or replace equipment damaged by breakdown

• Costs or expenses to limit business income loss or speed of business restoration.

• Spoilage – Coverage for damage to perishable stock for losses due to temperature change. Covered perils include power failures and mechanical breakdowns. • Option to increase limit up to $250,000 • Back-up power systems and temperature

controls required

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Program Highlights

GrowPro Coverage Enhancements • Seasonal Fluctuations of Crop

or Inventory – can be tailored to accommodate higher stock values during “peak” seasons

• Business Income/Crop Income covers losses for covered perils that interrupt crop cycle and/or prevents new growing cycle during restoration period.

• Limited Pollution Liability – Provides coverage for cleanup and removal of pollutants resulting from the insured’s application of pesticides and herbicides. • Coverage applies to both on- and off-site

operations

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Program Highlights

Holes in Coverage • Business Income/

Damage to Dependent Locations • Damage to dependent locations, i.e.

“big box stores” may result in significant loss of sales income

• Does current BI insurance coverage include dependent locations?

• Equipment Breakdown/ Spoilage • Damage to equipment that maintains

controlled growing environments can result in significant losses…

• Are your clients covered for such damages and the potential damage it may cause to their stock?

• Greenhouses • Are they covered at all? • Replacement cost?

• Stock in Open • Many carriers have sub limits for wind and hail

damage, if they cover it at all.

• Stock Away From a Covered Location • Many large greenhouse/nursery operations

provide stock to big box stores on consignment. Do current policies cover this exposure?

• Habitational Dwellings • Many carriers will not write habitational

dwellings on their commercial form, requiring a separate policy

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Other Considerations

Admitted vs. Non-Admitted Carriers • GrowPro is underwritten only by Admitted carriers with

“A” ratings by A.M. Best

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Submission Requirements

Need complete submission, to review all risks Package Completed ACORD application Completed GrowPro Supplemental Application 5 Years Currently-Valued Loss Runs Current MVRs (ability to quote subject to) Declinations Target Pricing

Worker’s Comp Description of Safety Initiatives, hiring practices, return-to-

work, and drug-testing programs Exp. Mod. Worksheet (if available)

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Supplemental Application

Importance of Providing Key Information Pay special attention to property section. Most GrowPro accounts have a

variety of building types, including greenhouse structures which will vary in construction type, roof covering and in value per square foot. • We can provide coverage, per location, on a blanket basis, but will require a

schedule of values for each building

Replacement cost of greenhouse structures can range from $5 to over $30 per sq ft. We will provide assistance in establishing adequate property limits. A basic diagram of the property layout is an excellent tool for everyone

involved and is appreciated by the insured. Take time to understand your client’s peak seasons, to provide proper stock

limits and business income limits.

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Supplemental Application

Property Section Types of crops grown? Typically

flowering plants, bedding plants, poinsettias, hanging baskets • We will not insure fruit or vegetable

growers or distributors. Number of growing cycles per

year? • How long to resume normal operations

following catastrophic loss? Maximum value of crop during

peak growing season? • To determine proper limits for crop, i.e.

spoilage from equipment breakdown Is there a backup generator

capable of supplying 100% of facility’s power requirements? • Mandatory.

• Is there a temperature control alarm

system to warn of changes in temperature within the greenhouse? • This is typical for greenhouse

growers. If not, why? • Does client or responsible party live

on or adjacent to the premises? • Quick response to control losses

• Does client utilize walk-in coolers for the storage of perishable stock? • If yes, what is maximum value of the

refrigerated stock? • Use standard spoilage form to insure

to maximum value of refrigerated stock.

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Supplemental Application

Property Section Is shade cloth/energy curtain at

least 2 feet from ignition sources? • Verify location of shade cloth, distance

from possible ignition sources • Highly flammable, can allow fire to

spread rapidly • Discuss measures grower has

considered to reduce risk – i.e. flame resistant cloth, fire breaks, fire

extinguishers, etc.

Are chemicals properly labeled, stored in locked room/cabinet? • Growers required to have chemicals

labeled and locked in properly ventilated storage room or cabinet.

• Do potting machines,

transplanting machines, and other hazardous greenhouse equipment have proper guards or shields in place? • Don’t forget Personal Protection for

employees (gloves, ear muffs, glasses)

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Greenhouses

Tempered Glass

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Greenhouses

Barrel-Vaulted Double Poly

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Greenhouses

Quonset-Style

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Greenhouses

Gutter Connected Gable with Polycarbonate Roof

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Why NIP?

• Over 20 years of green industry experience • Custom coverage designed to fill gaps left by

standard programs • Expert claims handling from a dedicated claims

director • Experienced underwriters who understand your

client’s business • Flexible payment plans

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NIP’s GrowPro® Program

Submission Requirements Package Completed ACORD application Completed GrowPro Supplemental

Application 5 Years Currently-Valued Loss Runs Current MVRs (ability to quote

subject to) Declinations Target Pricing

Worker’s Comp Description of Safety

Initiatives, hiring practices, return-to-work, and drug-testing programs Exp. Mod. Worksheet (if

available)

Summary

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Summary

GrowPro Provides • Outstanding coverage, tailored to specific needs of

Greenhouse Growers, Nurseries, and Garden Centers • Strength and reputation of “A” rated carriers1

• Backed by 20+ years of experience in providing specialized programs tailored to the unique needs of select classes of business

• Stability through all market cycles • NIP awarded “Best Practice Designation” by TargetMarkets

1 AM Best A Rated (Excellent) Carriers (Company Size XV)

Questions?

Thank You!

FOR MORE INFO:

Piyush Patel pipatel@@nipgroup.com

(800) 446-7647 x 461 - telephone (732) 732-791-1713- fax