How Do I Know If A Tree Company Is Properly Insured?

When hiring a tree care company, ensuring they are properly insured is as crucial as assessing their expertise and experience. The right insurance coverage not only protects the company and its employees but also safeguards you, the client, from potential liabilities and financial losses. In this article, we'll explore the different types of insurance relevant to the tree care industry, the importance of bonding for certain jobs, and how you can protect yourself by verifying a company's insurance coverage.

Types of Insurance in the Tree Care Industry

Tree care is often categorized as a high-risk industry by insurance providers due to the inherent dangers associated with the work, such as climbing heights, using heavy machinery, and dealing with falling debris. As a result, tree care companies typically require specialized insurance coverage that goes beyond what is offered to general landscaping businesses.

The specific categorizations of the operations that tree companies conduct can vary among insurance providers, but they will commonly be labeled as “Tree Pruning, Tree Trimming, Stump Grinding, Tree Dusting/Spraying/Fumigating" on the company’s policy. A tree care-specific policy is specially designed to cover the unique risks of tree care operations, including:

• General Liability Insurance: This covers third-party claims for bodily injury and property damage resulting from tree care activities.

• Workers' Compensation Insurance: This provides benefits to employees who are injured or become ill as a direct result of their work in tree care.

• Professional Liability Insurance: Also known as errors and omissions insurance, this covers claims related to advice or services provided, such as tree assessments or consultations.

• Commercial Auto Insurance: This covers vehicles used in tree care operations, including damage and liability for accidents. This is necessary if there are accidents on your property 

• Inland Marine Insurance: This covers equipment and tools used in tree care, protecting them from theft, damage, or loss.
  
  

Policies may also include umbrellas that expand coverage limits and endorsements for more nuanced circumstances as required but the policy types listed above are the most common ones that you will see on a company's Certificate of Insurance (or COI for short). Insurance providers assess the specific services offered by a tree care company, the equipment used, and the level of risk involved in their operations to determine the appropriate coverage and premiums. Diligent tree care companies work with insurance agents or brokers who understand the industry and can tailor coverage to meet their specific needs depending on what services a tree care company offers lest they (and more importantly their clients!) find that they have insufficient coverage when it is needed the most.

The Bare Necessities

General Liability Insurance is a fundamental coverage that every tree care company should possess. It protects against third-party claims for bodily injury, property damage, and personal injury that can occur during tree care operations. For instance, if a tree limb falls and damages your property while a company is performing pruning services, General Liability Insurance would cover the repair costs if the contractor is unable or unwilling to fix the damage themselves. 

Workers' Compensation Insurance is an often overlooked coverage for tree care companies. This insurance provides benefits to employees who are injured as a direct result of their job. Tree care is a high-risk industry, and accidents can happen despite the best safety measures. Workers' Compensation ensures that employees receive medical care and compensation for lost wages without the need for litigation. and while there may not be a requirement for this type of insurance for smaller companies,  having this insurance regardless of a company's size shows a commitment to the wellbeing of a its employees. Like General Liability, this policy should be considered a minimum requirement when considering companies that are not solo operators.

The Role of Bonding

Bonding is often associated with large, government, or subcontracted jobs. It provides a financial guarantee that the tree care company will fulfill its contractual obligations. Bonds are typically acquired on an as needed basis for public projects or large-scale private contracts to protect the interests of the client. Bonding is rarely, if ever, required or necessary for single-dwelling residential tree work in Virginia, especially if the company does not require payment up front.

The Difference Between Tree Care and Landscaping Insurance

It's important to understand that tree care insurance is distinct from the insurance most landscaping companies carry. Tree care involves specialized operations such as climbing, pruning, and removing trees over certain heights (generally around 15 feet), which carry higher risks than general landscaping work. Consequently, tree care-specific insurance is more expensive due to the increased liability and risk of injury. A landscaping company that occasionally offers tree services might not have the appropriate coverage for tree care operations, exposing clients to potential risks.

A Cautionary Tale: The Importance of Proper Insurance

Take a theoretical example of a homeowner who hired a local jack-of-all-trades company for a significant tree removal. The contractor assured the homeowner that they were insured, but in reality, they only had a policy that covered basic landscaping. During the removal process, the tree was improperly felled, causing catastrophic damage to the client's home. Unfortunately, the contractor's insurance did not cover the damage because the policy was not specific to tree care operations or did not cover trees over a certain height.

As a result, the homeowner had to bear the interim repair costs, and the family was drastically displaced, requiring an entirely different living arrangement while the home was repaired. To make matters worse, a lengthy legal battle with the contractor ensued, ultimately ending in their bankruptcy and a homeowner who was left responsible for the repairs.

While this may be an extreme case, it serves as a stark reminder of the importance of verifying a company's insurance coverage. The company in question had a reputable track record with years of service and stellar reviews, but this incident shows that even seasoned professionals can make mistakes. It underscores the critical need to ensure that the tree service you hire has the proper insurance coverage to protect you from unforeseen disasters.

Protecting Yourself: Verifying Insurance Coverage

To protect yourself, always request certificates of insurance from the tree care company you're considering. These certificates should detail the types of coverage, the policy limits, the date of policy expiration, information about who provides each type of policy, and contact information for the agent of record. Don’t hesitate to call the insurance provider to verify the validity of the coverage. 

A reputable company should have no issue providing this information and ensuring that their policies are up to date. If there is ever any question about the authenticity of a certificate, search for the contact information of the company that provides the insurance and call them directly instead of using the phone number on the certificate.

Crown Down Tree Service LLC: Fully Insured for Your Peace of Mind

At Crown Down Tree Service LLC, we understand the importance of proper insurance coverage. We carry all relevant insurance related to the services we provide, including General Liability that allows us to work at height and Workers' Compensation to protect our employees from the perils of tree work. Our commitment to safety and professionalism extends to ensuring that our clients are fully protected from any unforeseen incidents.