Specialized Business Insurance & Risk Management Blog

Breakdown of the Horticulture Industry

Horticulture IndustryWe published a post back in August that focused on the Segments of the Horticulture Industry. In this iteration of the breakdown of the horticulture industry, we’d like to take the focus a bit further and give a more in depth look of what kinds of activities theses segments are involved in.

There are four segments of the horticulture industry: Nurseries, Greenhouses, Independent Garden Centers, and Hybrids of the previous three. Though most may view growers as one big industry, there are fundamental differences in the activities each of the different businesses.

Wholesale Greenhouse Growers
Wholesale greenhouse growers grow ornamental flowers, plants, shrubs and certain kinds of trees, in controlled environments. Typically, a grower will have property values that are much higher than those of a nursery grower. They also have specialized structures and other equipment, including the greenhouse itself, as well as other necessary equipment, such as water, boilers, lighting, temperature control, alarms, and security.

Larger growers also supply plants to big box stores or other venues, on a consignment basis. Of course, this creates significant exposure for their stock at these non-covered locations, as well as potential loss of income, due to interruptions in business at the non-covered location.

Wholesale Nursery Growers
Wholesale Nursery Growers generally grow plants and trees in open fields instead of under a greenhouse structure. Most of these operations are located on the west coast and southern US, where the climate tends to stay warmer year-round.

Retail Garden Centers
Retail Garden Centers are the major customer of the Greenhouse Grower and the Wholesale Nursery Grower. They typically sell related products, including seed, fertilizer, and small garden tools, in addition to flowers, plants and trees and often have greenhouse structures to house the plants that are out for sale. Also, they may have a Landscaping division, which creates a unique and different exposure, from that of the typical greenhouse or nursery operation.

Hybrid Operations
Hybrid operations are a business that are an overlap of any of the three, and in turn, have much higher exposures due to the multiple operations.

Understanding the activities of each of the segments of the horticulture industry assists greatly in being able to write coverage that will best keep the business safe. Building an insurance program from the ground up with the specific needs of not only the industry as a whole, but the segments that make it up, is how to best avoid gaps in coverage that leave an insured vulnerable.

For more information, visit GrowPro.

The Risks of Shipping for Horticulturists

Shipping RisksTennessee Attorney General Bob Cooper has sued the owners of two companies for allegedly using false advertising to sell nursery goods.

“The state is seeking a permanent injunction against the defendants to stop these alleged unfair and deceptive practices and to provide customer refunds and other relief,” Cooper said.

According to the petition, the pair displayed photographs of healthy, viable plants. The plants shipped out by the companies arrive to customers in a dormant state, however, and some even arrived dead.

The petition also alleges that the pair failed to deliver ordered goods within promised time frames, failed to deliver complete orders and did not refund orders made by consumers who were unhappy with the products.


This story represents a risk to nurseries and garden centers that ship plants as part of their business model. Sending products to customers’ houses represents a risk for any company that does it, but there’s a greater risk for businesses shipping plants.

The difference for horticultural businesses is that the products they are sending are more likely to be damaged because they can’t be boxed while they’re in transit. Also, should they get lost in transit and arrive later than expected, the plant could have gone too long under rough conditions with no hydration and be wilted or dead on arrival.

In the story above, two companies, Autumn Ridge Nursery and Summerstone Nursery, are being sued for false advertisement because the pictures of the plants showed them being healthy and vibrant and they arrived wilted/damaged or dead.

It is highly common practice for any company to use nice looking, sharp, touched-up pictures as displays for their products in magazines or online. The simple fact of the matter is that a company who is selling flowers or trees isn’t going to post pictures of wilted flowers or dead trees on their website or magazine. The mistake made by the nurseries is that they refused refunds for plants that arrived damaged or dead.

Denying refunds for orders that were filled out wrong, shipped wrong, and arrived late is bound to catch up with any company. The nursery industry has to look out for themselves in this department more-so than others due to the nature of the products they are shipping; because rough transit travel and items getting lost and delivered late have a very detrimental impact on their products.

Keeping this heightened risk in mind and biting the bullet when necessary and resending an order could save horticulture businesses from being the target of a lawsuit for false advertisement.

For more information, visit GrowPro.

The Segments of the Horticulture Industry

HorticultureThe horticulture industry has varying segments, each of which has their own unique risks. Breaking down and identifying the industry makes the process of coverage and writing insurance policies a lot more efficient and effective.

The team at GrowPro, an insurance program designed for the green industry and their specific needs, has identified the unique segments of the industry in order to ease the process of writing effective coverage.

The industry breaks out into four segments, which include:

These are places where plants are propagated and grown to a usable size. They’re usually independent commercial operations, with or without greenhouses; and they typically have a mix of retail and wholesale customers.

These focus on large-scale production of floricultural products. They are typically wholesale operations, and have unique exposures, including the actual greenhouse and related equipment. They are often not adequately addressed through standard agricultural insurance programs.

Independent Garden Centers
Independent Garden Centers can be anything from a small, “mom and pop” operation to larger regional centers. Their primary focus is Retail.

Hybrids are operations that overlap, combining characteristics of more than one type of operation. These represent a unique risk, as multiple activities mean more exposure. The best example of a hybrid would be a nursery that also offers landscaping services.

These four segments represent the breakdown of the horticulture industry. They each have unique risks so it is important not to just throw a blanket small business insurance policy over them as coverage gaps are very likely to happen. Programs for the horticulture industry need to be designed around the unique risks that each segment runs into during daily operations.

For more information, visit GrowPro.

Climate Change: The Effect On Plants

Climate ChangeA great challenge to those who make their living by growing and selling plants is beginning to rear its ugly head. The catalyst of this challenge is climate change.

In a decade-long study conducted by Northern Arizona State University, it was determined that initially, climate change helps the plants grow rapidly, but then proceeds to stunt the plants growth and causes them to deteriorate quickly.


“We were really surprised by the pattern, where the initial boost in growth just went away,” said Zhuoting Wu, NAU doctoral graduate in biology. “As the ecosystems adjust, the responses changed.”

Science Daily – http://www.sciencedaily.com/

The initial reaction from the plants was very positive, but that ultimately led to their deteriorating over time.

“Faster nitrogen turnover stimulated nitrogen losses, likely reducing the effect of warming on plant growth,” Hungate said. “More generally, changes in species, changes in element cycles — these really make a difference. It’s classic systems ecology: the initial responses elicit knock-on effects which here came back to bite the plants.”

Science Daily – http://www.sciencedaily.com/

What does this translate to for the horticulture industry?

It would seem that a majority of plant growing is going to have to be moved indoors to a climate controlled environment as the warmer environment is encouraging more rapid growth of invasive species that smother cash crops and unhealthy plants that bloom quickly and deteriorate more rapidly than normal.

It is also believed that as the climate continues to change, that winters will become milder with a lot more precipitation and summers will become warmer and drier with extended droughts. Many horticulturists will have to have irrigation systems that collect water during the winter for spaced out dispersion in the summer months.

It is important to have irrigation systems collect water as water use during droughts could become limited by law.

A unique challenge lies in front of all horticulturists with the onset of climate change and we will need to adapt in order to remain profitable.

For more information visit GrowPro.