Four Greenhouse Risk and Insurance Trends to Know in 2023
December 10, 2022 
Oregon Flowers; photo courtesy of Hortica
In the last year, businesses throughout the horticulture industry have experienced material cost increases, supply chain challenges, and workforce risks. In the year ahead, our team continues to monitor the business trends that could impact your risks and insurance coverages. Here’s a brief overview of what you need to know to help manage your costs and keep your business protected heading into 2023.
Trend: Shifting Workforce
The Great Resignation of 2021 continued into this past year, with quit rates reaching levels last seen in the 1970s. Even if this trend slows, its aftereffects could alter workplace risks in 2023. On average, 2.5% of workers — about 4 million — switched jobs each month from January to March 2022. This translates into an annual turnover of nearly 50 million workers — if it’s assumed no workers change jobs more than once a year according to Pew Research.
Recruitment and retention challenges aren’t new to the greenhouse industry, and neither are the effects it can have on your business. When someone leaves your team, you can lose years of knowledge, experience, and skills. Hiring and training — especially with new or temporary workers — takes time, attention, and resources. As businesses throughout the industry struggle with turnover, they may turn to newer, less experienced workers, which could introduce greater risk for injuries and accidents. Likewise, as some businesses struggle to hire, current employees may take on increased workloads and face additional risks associated with fatigue.
What it means for your risk and insurance
- Review your workers’ compensation coverage and confirm that it fits your team’s cost structure, state requirements, and potential medical needs.
- Check if your greenhouse has employment practices liability insurance (EPLI) and whether your coverage includes resources that can help you create a company handbook to address safety and organizational policies.
- Update your safety and training plans to reflect any new or upcoming changes to your team and operations.
- Integrate safety into your onboarding and training programs to reinforce your greenhouse’s commitment to a safe workplace. Reducing injuries can help you protect your workers, avoid interruptions, and manage costs.
Trend: Accident Costs and Litigation
Used and new auto costs remain high. Due to supply chain issues and employment challenges affecting the automotive industry, vehicle production and repair are taking longer and costing more. On top of this, litigation and plaintiff attorney involvement seem to be rising in accident cases involving businesses and their drivers. In tandem, these trends can drive up accident costs and lead to large settlements that threaten your greenhouse’s bottom line.
What it means for your risk and insurance
- Make sure you have enough insurance coverage for your driving, delivery, and shipping needs. Your insurance agent can help you understand the different coverages available (liability, collision, comprehensive, property, underinsured/uninsured) and identify gaps that may exist. As accident costs shift, an agent can help you obtain an accurate valuation of your vehicle and address your business’s liability risks.
- Maintain strong hiring standards and review your employees’ driving history.
- Conduct driver safety training and formalize safe driving policies that include a distracted driving policy for your employees.
- Outline, communicate, and reinforce your business’s driving standards and expectations.
Trend: Uncertain Economic Climate
As the year has progressed, many businesses have tried to gain clarity on the economic environment. The increased cost of goods and services means many consumers may not spend as much in the future — and they may be more judicious when they do. Unfortunately, the landscape is still difficult to predict, which can add extra challenges to sales and profit outlooks.
As you prepare for the year ahead, you may be reviewing areas where you can control costs — including your insurance. And while dropping or reducing your insurance coverage may seem like a fast way to manage expenses, it could add more financial risk rather than less.
What it means for your risk and insurance
- Assess whether your business’s buying habits have changed. For example, you may have pre-ordered supplies due to supply chain issues, which has now left you with a larger inventory than usual.
- Review your business assets to ensure that you’re accounting for everything your business relies on for profitability, including crops, employees, equipment, facilities, and logistics.
- Next, speak with your insurance agent about what you can do to manage your premiums before adjusting your policy. As an example, increasing your deductible could help lower your premium costs if you have strong safety practices in place. It’s a fine point in how you manage your business expenses—and one your insurer can help you navigate.
Trend: Growers Explore Environmental, Social and Governance (ESG) Programs
According to BusinessWire, the global commercial greenhouse market is estimated to be valued at $35.5 billion in 2022 and projected to reach $61.6 billion by 2027. That growth has caught the eye of socially conscious investors. An Environmental, Social and Governance (ESG) program aids investors in assessing how an organization manages risk, sustainability, and compliance, something that greenhouse growers are benefitting from.
As investors consider greenhouses and indoor farming as part of their investment portfolio, they want to ensure businesses operate responsibly. Sustainability is going to be the largest component in a greenhouse ESG program, but businesses will also have to prove they’re addressing other aspects including employee health, safety, and cybersecurity. The overall topic of ESG could serve as its own dedicated topic, but for now, here’s a quick overview of what it could mean for your business.
What it means for your risk and insurance
- If you’re looking to create an ESG program and gain investor attention, a thorough risk management plan, safe work environment, and adequate cybersecurity practices can complement the sustainability practices you may already have in place.
- Reach out to your insurer to make sure your coverage is up to date and compatible with the safety and cybersecurity standards set in your ESG program
- If you need to make improvements, your insurer can work with you to prioritize the steps you need to take to improve the health, safety, and compliance of your business.
Up Ahead
You work hard every day to turn your passion into a profitable business that your customers love. Don’t allow unexpected risks to undercut your efforts or catch you off-guard.
If the last few years have taught us anything, trends change, and our industry adapts. What was true for your greenhouse and business plans in 2022, may not be in 2023. The same applies to your risks and insurance policy. Give yourself peace of mind by making sure your greenhouse is financially protected.
The trends I’ve covered in this article are meant to give you a head start, but they shouldn’t replace the conversations you should be having with your insurance carrier or agent. Your insurer can help provide more targeted advice and help you navigate any updates to your policy. That said, please reach out if you have any questions — I’m happy to help. Best wishes in the year ahead!
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