As a tree service company grows, its insurance program usually becomes more complicated.
A small residential tree company with a few trucks has a very different risk profile than an established tree contractor operating bucket trucks, chip trucks, cranes, pickups, trailers and specialized equipment with multiple crews on the road every day.
Unfortunately, the insurance program does not always grow with the business.
We see this when reviewing tree service insurance programs. The company may have added vehicles, employees, equipment and larger commercial contracts over the years, but the insurance program is still structured similarly to when the business was much smaller.
That can create both coverage gaps and unnecessary cost.
Commercial Auto Insurance for Tree Service Companies
Commercial auto insurance is becoming one of the most important parts of a tree company’s insurance program.
Tree contractors can operate a diverse fleet including bucket trucks, chip trucks, grapple trucks, pickups, dump trucks, cranes and trailers.
The larger the fleet becomes, the greater the opportunity for a serious auto liability claim.
A rear end accident involving a heavy commercial vehicle can create significant bodily injury exposure. The same is true for an intersection accident, lane change accident or collision involving a pedestrian or cyclist.
This is why we spend a lot of time reviewing commercial auto insurance for tree service companies.
The number of vehicles matters, but so do the drivers.
Motor vehicle records, driver selection, vehicle use, radius of operation, accident history and driver management can all impact what insurance carriers are willing to offer.
For larger tree service fleets, commercial auto insurance should not be treated as an afterthought.
Does the Umbrella Policy Cover the Commercial Auto?
This is one of the first things we look at when reviewing insurance for a tree company.
Many business owners know they have a $1 million commercial auto liability limit and an umbrella or excess liability policy.
That does not automatically mean the umbrella sits over the commercial auto.
We have reviewed insurance programs where the umbrella provides additional limits over general liability but not commercial auto.
For a tree service company operating a fleet of heavy vehicles, that can be a significant gap.
Think about the potential severity.
A tree limb damaging a customer’s house could certainly create an expensive general liability claim. But a serious accident involving a bucket truck, chip truck or other heavy commercial vehicle can create catastrophic bodily injury claims involving multiple people.
For a growing tree company, we want to know exactly where the umbrella or excess liability coverage applies.
General Liability Insurance for Tree Service Companies
General liability insurance protects a tree service company from many of the third party liability exposures associated with its operations.
Tree removal, tree trimming, pruning, land clearing and other arborist operations can result in property damage or bodily injury.
A falling limb can damage a structure. Equipment can damage underground property. Work near neighboring properties can result in disputes or claims.
But not every general liability policy for a tree service company is the same.
The exclusions matter.
Tree companies performing residential work, HOA work, condominium work, commercial projects, land clearing or utility related work should make sure their general liability policy actually contemplates those operations.
The cheapest tree service insurance quote is not necessarily the best insurance program.
Workers Compensation Insurance for Tree Service and Arborist Operations
Workers compensation insurance is a major part of the overall insurance cost for many treecompanies.
Tree work has obvious workers compensation exposure.
Employees work at height, operate chainsaws and chippers, handle heavy equipment and perform physically demanding work in changing environments.
Insurance carriers reviewing workers compensation insurance for tree service companies will usually pay close attention to loss history and safety practices.
They may also look at employee experience, training, use of personal protective equipment, climbing procedures, equipment maintenance, claim reporting and return to work practices.
For larger tree companies, a written return to work program can become particularly valuable.
An injured employee may not be able to climb or perform tree removal, but that does not always mean there is no productive work available.
Light duty and return to work programs can help keep employees engaged while also helping control workers compensation claim costs.
Tree Equipment and Inland Marine Insurance
Tree companies can have an enormous amount of money invested in equipment.
Chippers, stump grinders, skid steers, mini skid steers, loaders, excavators, mulchers, aerial lifts and other specialized equipment can add up quickly.
That equipment also moves between jobsites.
Inland marine insurance and contractors equipment coverage can help protect equipment that may not be adequately addressed by a traditional property policy.
The equipment schedule should be reviewed regularly as the company buys, sells and replaces machinery.
A growing tree company can easily accumulate hundreds of thousands or even millions of dollars of mobile equipment over time.
Arborist Professional Liability
Another coverage worth discussing is arborist professional liability insurance.
Not every tree company needs the same professional liability coverage.
However, companies providing arborist reports, tree risk assessments, consulting services or professional recommendations may have an exposure that goes beyond simply performing physical tree work.
If a certified arborist provides a professional opinion regarding the condition or safety of a tree and that recommendation is later alleged to have been incorrect, the resulting claim may be different from a traditional tree trimming or removal claim.
For companies performing these services, arborist professional liability or errors and omissions insurance should at least be part of the coverage discussion.
Utility Line Clearance and Commercial Tree Contractors
Utility line clearance contractors face another level of insurance complexity.
Tree companies performing vegetation management, right of way clearing or utility line clearance work may have larger fleets, more employees, broader geographic operations and more demanding contractual insurance requirements.
Insurance for utility line clearance contractors can involve general liability, commercial auto, workers compensation, umbrella or excess liability, equipment insurance and contractual risk transfer.
The insurance market for these operations can also be more limited than the market for a traditional residential tree service.
That makes the quality of the submission and the company’s loss history especially important.
When Tree Companies Outgrow a Standard Insurance Program
There is no magic number of trucks or employees where a tree service company suddenly needs a different insurance strategy.
But as the company grows, the conversation should change.
A tree contractor with 20, 30 or 40 vehicles should not necessarily approach insurance the same way as a company with three trucks.
At that size, commercial auto losses, workers compensation claims, umbrella limits, equipment values and safety practices can have a significant impact on the company’s total insurance cost.
Larger tree service companies with strong loss history may eventually have enough premium to evaluate loss sensitive insurance programs, higher deductibles, group captives or other alternative risk structures.
The objective should not simply be finding the lowest insurance quote each year.
It should be creating an insurance program that can remain competitive as the company grows.
At Deerfield Risk Advisors, we work with tree service companies, arborists, utility line clearance contractors and larger tree care fleets across the country. We review general liability, workers compensation, commercial auto, umbrella and excess liability, equipment coverage and professional liability together rather than looking at each policy in isolation.
For a growing tree company, that bigger picture becomes increasingly important.
Learn more about our insurance and risk management approach for tree service, arborist and utility line clearance contractors.
