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Insurance rates are based upon class experience. You are lumped in with all the other lawn services a company writes nationwide. If the company has adverse loss history on the lawn service class then the lawn rate is going to go up for everyone that company insures, even though the majority of lawn services never had a claim. Insurance is a pooling technique where everyone pays in and those few that have a claim are paid. The trick is that while companies can project the number of claims using probability theory (not as accurate as mortality tables life companies use) and other actuarial methods, no-one knows which particular business will suffer a loss. I know that my basic general liability rate is going to increase 24.5% next year (Erie Ins. Exchange). I will have to increase prices in order to maintain the same profit margin. I would guess that the majority of companies are going to increase general liability rates, if they haven't already. Just like in the lawn business, there are insurance companies that lowball price. May not last long and most that do either withdraw from insuring that type of business or go belly-up (yes, insurance companies go broke; 31 in '00, 24 in '01, 38 in '02). Make sure you deal with a company that carries at least an A financial rating from AM Best.
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