How to Prepare Your Greenhouse Business for Possible Interruptions
February 17, 2024 
Business interruption is the last thing you want to happen to your greenhouse operation. Yet, as you know, greenhouses are exposed to a unique set of risks that could disrupt services.
Just look across the greenhouse and garden center industry. Few sectors are more reliant on climate-controlled property, equipment, and technology to deliver products. Yet even as owners prepare, the unexpected can still happen.
That’s the crux of business interruptions. Even if you think you’re prepared, there are some factors out of your control. Plus, the characteristics of your operation alone can influence your exposures, such as:
- Using glass, polycarbonate, plastic, or fiberglass coverings
- Producing potted plants, vegetables, fruits, or specialty cuts
- Selling plugs or finished products
Business interruption can occur in many forms and impact your reputation, customer retention, cash flow, and future. With proper planning — and well-rounded, customized insurance coverage — you can navigate disruptions and help ensure your greenhouse business continues to thrive.
Top Risks That Can Lead to Greenhouse Business Interruptions
- Storm damage: Heavy snow, extreme temperatures, lightning, wind, and hail can inflict damage to greenhouses, inventory, equipment, and vehicles.
- Property damage: Risks that can cause damage to your greenhouse include fire, theft, vandalism, structural issues, and accidents.
- Equipment breakdown: From boilers, generators and irrigation equipment to coolers and environmental control computers — a malfunction of any of these could lead to lost time.
- Cyberattacks: Data breaches and phishing scams can immobilize your network and make your personal data — and that of your customers and vendors — vulnerable.
- Supply chain disruptions: These delays can impact building projects, equipment replacement, order fulfillment, and supplies replenishment.
Steps You Can Take Now to Prepare for Shutdowns
Many of the risks listed above have their own set of mitigation tactics to reduce your exposure and aid in recovery. Both myself and Zach Bruce at Hortica have previously provided resources geared toward greenhouse operators on cybersecurity and severe weather prep. Your insurance provider can provide additional guidance and resources to help mitigate these risks.
You can also take additional steps to help keep your downtime to a minimum:
- Develop a communication plan to stay connected with your customers, suppliers, and employees. Provide employees with information on when, if, and how to report to work after a disaster.
- Keep an ongoing, detailed inventory of your operations, including crops, supplies, equipment, and vehicles so you can review it if you experience damage during a storm.
- Have extra greenhouse materials on hand to make temporary repairs once it’s safe to do so.
- Develop relationships with more than one company in case your primary contractor isn’t available or is unable to help you.
- Keep your insurer’s contact information readily available. Be prepared to report what damage has taken place to your crops, equipment, or facility.
Develop a Business Continuity Plan
About 25% of businesses don’t reopen after disasters according to the Federal Emergency Management Agency (FEMA). Oftentimes, the longer recovery takes, the more likely a business may permanently shut its doors.
A business continuity plan is a detailed strategy to help your business recover quickly after an unexpected shutdown. If you haven’t developed a plan already — or updated yours recently — take time to do so.
When creating the plan, include representatives from all aspects of your operations. When the plan is complete:
- Share the plan throughout your operation through a general meeting or smaller, supervisor-led meetings. Inform all new employees as part of the onboarding process.
- Use employee bulletins, email newsletters, or company publications to keep your employees informed of plan availability and updates.
- Revisit the plan on an annual basis and make any necessary adjustments.
- Update your plan as your operations change.
Review Your Business Interruption Coverage
One of the points I always stress is that you need to know what’s included in your insurance policy and that you have the right coverages to help protect your greenhouse.
Coverage options such as commercial property can help cover losses to buildings and greenhouses, crops, inventory, and damaged equipment. General liability can protect you from claims brought against you by others that claim bodily injury or damage to their property.
Along with the standard coverages noted above, business interruption coverage can help you:
- Recover lost business income
- Cover ordinary expenses, including payroll
- Pay rent or lease payments
- Assist in covering additional operation expenses
- Offer assistance if you must temporarily move your business to a different location.
Business interruption insurance can be part of a standard business policy or can be purchased as an endorsement or add-on to a property insurance policy/package. It covers losses for a covered event written in your policy, such as a fire.
A Closer Look at Business Interruption Insurance
In a nutshell, business interruption provides coverage for net income and can include extra expense coverage for additional expenses that may be incurred as a result of a covered claim (e.g., moving crops to a different location or leasing space to continue business operations).
Business Interruption coverage ends when the damaged property is rebuilt and put into use for its intended purpose, or the limit of coverage has been reached.
However, an extended period of indemnity can be included to cover lost profits after the damaged property is rebuilt. For growers, a great example of when this would be needed is when you may have missed a growing cycle before your property is rebuilt.
Have a Conversation and Prep Your Business
Every greenhouse business is different. An effective business continuity strategy should account for your business’s specific risks, operations, and insurance needs.
Talk with your team, local experts, and agent to ensure you’re adequately protected from the unexpected. A few annual conversations can give you peace of mind that your business, and team, is prepared.
If you have any questions related to business interruption insurance or other coverage options for greenhouses, please contact me. I’m here to help.
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