What insurance...and how much?

[Josh A.]

I have the worst luck when searching the forums. Maybe it is lack of skill, but I seem to never be able to find what I am looking for.

I am contemplating starting a small tree service company as a secondary income. I am not an arborist, but I have a degree in horticulture, worked with trees and wood for years, and thanks to my CAD, have more than enough equipment to start. I am not naive enough to try to do an arborist's work, simply looking to cut large wood that few others will cut. The trees that I "fall" would not be in residential areas. I would like to keep it simple, and being a second income I would be more inclined to turn down any job beyond my skill level.

I just would like to know the basic insurance (liability) needs of a business like this. Any other tips would be greatly appreciated.
Thanks

 

[jefflovstrom]

I am contemplating starting a small tree service company as a secondary income. I am not an arborist, but I have a degree in horticulture, worked with trees and wood for years, and thanks to my CAD, have more than enough equipment to start. I am not naive enough to try to do an arborist's work, simply looking to cut large wood that few others will cut. The trees that I "fall" would not be in residential areas. I would like to keep it simple, and being a second income I would be more inclined to turn down any job beyond my skill level.

I'm confused. Tree service or tree removal service.
Jeff

 

[TreeClimber57]

I am contemplating starting a small tree service company as a secondary income.

Ok.. from below sounds like you are doing only removals, correct?

simply looking to cut large wood that few others will cut. The trees that I "fall" would not be in residential areas.

Ok, so not in residential area, so where would this be? Is this forestry work?

I just would like to know the basic insurance (liability) needs of a business like this. Any other tips would be greatly appreciated.

Would be climbing any trees, or are they only straight cut and drop? Because you say above "wood that few others will cut."

Frankly, tough to say. Not residential.. is anything around at all.. any buildings, electrical wires, roadways..

I have no idea at this point.

If on municipal or gov't property, they would likely have a minimum requirement. Ours is $5m for most municipalities, but some are now asking for $10m.

 

[Josh A.]

Sorry guys, I did not intend to be that ambiguous. Nor did I understand how many possible avenues there would be. I will try to clarify; " trees others won't cut" I mean large trees that are already down. Mostly the trunks that are too large diameter for homeowners, and possibly some tree companies. Or, are not cost effective for an entire company to remove. (one tree) I am not looking for govt or maniciple work. I realize "residential" is a broad brush, and there are always variables, but that is the best I could describe. No climbing. Little falling. Mostly laborious tasks, little skill.

I am just looking for a little extra income, with trying to guard against a lawsuit. I realize I know nothing about this subject, and I dont want to sound as though I do.

 

[TreeClimber57]

" trees others won't cut" I mean large trees that are already down. Mostly the trunks that are too large diameter for homeowners, and possibly some tree companies.

Ok well lets see where this goes.. So big trees.. are you limbing, chipping or just the big wood.

How are you moving the big wood once cut.. ? Is there any chance of liability in the moving part? Vehicles, skid steers, cranes.. whatever?

am not looking for govt or maniciple work.

Ok, so around here that would mean you likely need less than $5m.. most companies who don`t do gov`t or municipal work around here have $3m.. which is same as most landscapers and mowing companies. (I think)

No climbing.

Ok.. that cuts down some risk.

Little falling.

Oh.. oh.. what is little falling.. as in a small number.. or little trees (and if little trees then how large). Falling one tree - especially if large one - means you have some risk here.. maybe.

Mostly laborious tasks, little skill.

Not sure I agree with little skill.. start a saw and you need some skill and head on shoulders.

But, I am not a lawyer.. so take it for what it is worth. But most tree guys around here if not doing municipal or gov`t work have $3m in liability. BUT ensure the policy has all the coverage, clauses, etc that you need. A good broker can help you there. If you are falling one tree.. then would suggest you get the proper coverage. Having said that.. there is risk in the other aspects of what you are discussing.. but falling is likely the biggest one.

 

[CUCV]

I started out 16+ years ago with 300K, went to 500K, then 1M and now 2M. Still a part time gig. There are many insurance companies out there. You may want to say that Landscaping is in your list of services, it may help get you a better rate. Try Natilus or NGM.

 

[Josh A.]

Thanks for the advice treeclimber. That is the type of info I was looking for

Little falling... Few trees not small.

Good advice about proper coverage. I have seen too many skimp (on any type of ins) and found themselve either not being able to replace what they had, or worse.

 

[TreeClimber57]

Thanks for the advice treeclimber. That is the type of info I was looking for

Little falling... Few trees not small.

Good advice about proper coverage. I have seen too many skimp (on any type of ins) and found themselve either not being able to replace what they had, or worse.

Check with your broker. For us the first few hundred thousand is the most expensive.. going from $3m to $5m was maybe a couple of hundred a year... and if I recall going from $5m to $10m was something like $73 per year.
Why.. it is all about risk. The chances of us ever needing anything over $3m is very small.. and anything over $5m is almost not likely to happen (from a risk perspective)..

Also.. hopefully you never damange anything.. we have over the years (as I suspect every tree service company has). But so far has always been small, and we have always paid out the damage ourselves and never made an insurance claim. We had a truck back into a car this past summer..but paid for it cash.

 

[jefflovstrom]

Well, that was fun. Dude, if you cannot figure this out, you should not go into this biz.
Jeff

 

[Josh A.]

Thanks for the insight Jeff! It sure is nice to see people hanging around here to offer good, sound advice to people who are looking for help on how to do things right. Because, and I am sure you'll agree, everyone has to start somewhere. Right Dude?

Now, if I was hanging out and posting in the commercial forum and posting elementary questions, and wasting peoples time...that would be a different story. But luckily, I am in the Arborist 101 forum...for beginners.

 

[mic687]

Check out West Bend Mutual liability insurance 1 mil single occurance 2mil aggregate for about 700.00 a year in Mi

 

[Scrat]

Thanks for the insight Jeff! It sure is nice to see people hanging around here to offer good, sound advice to people who are looking for help on how to do things right. Because, and I am sure you'll agree, everyone has to start somewhere. Right Dude?

Now, if I was hanging out and posting in the commercial forum and posting elementary questions, and wasting peoples time...that would be a different story. But luckily, I am in the Arborist 101 forum...for beginners.

Nice response!

 

[Steve-Maine]

What Insurance

You want to make sure you policy states exactly the type of work you do. Yes ago we were covered for tree work and landscaping. We dug up a power cable with a back=hoe, luckly no power and were told that we weren't covered as we didn't have excation coverage,. Its stranged as we were bonded on the job by the same insurance company. They paided after paying an extra premiun, next year changed to another company. Never trusted insurance companies since then. good Luck

 

[TreeClimber57]

You want to make sure you policy states exactly the type of work you do. Yes ago we were covered for tree work and landscaping. We dug up a power cable with a back=hoe, luckly no power and were told that we weren't covered as we didn't have excation coverage,. Its stranged as we were bonded on the job by the same insurance company. They paided after paying an extra premiun, next year changed to another company. Never trusted insurance companies since then. good Luck

Which is why you need to find a good broker. Insurance companies are pretty much mostly the same, trying to make lots of money at your expense. But a good broker can protect you, but you need to tell them what you are doing. They will ensure it is in your policy, and will fight on your behalf to protect you. It does work, but don't rely on the insurance company.. but the broker. And if you need anything, always go through the broker.

 

[ddhlakebound]

Sorry guys, I did not intend to be that ambiguous. Nor did I understand how many possible avenues there would be. I will try to clarify; " trees others won't cut" I mean large trees that are already down. Mostly the trunks that are too large diameter for homeowners, and possibly some tree companies. Or, are not cost effective for an entire company to remove. (one tree) I am not looking for govt or maniciple work. I realize "residential" is a broad brush, and there are always variables, but that is the best I could describe. No climbing. Little falling. Mostly laborious tasks, little skill.

I am just looking for a little extra income, with trying to guard against a lawsuit. I realize I know nothing about this subject, and I dont want to sound as though I do.

If you're not planning on climbing, or falling, or doing any work which presents you with liability, there's a few things you'll figure out quickly.

Having the insurance won't matter much, because there will be little/no work for you to even bid on. Most of the "laborious, little skill tasks" you're describing get taken care of by family, friends, or wood scroungers, for free, or just lay there until they rot.

I'm not telling you not to try to make some side money, but you need a better understanding of the game you want to jump in before you buy an insurance policy you don't need.

 

[littlenick]

Check out West Bend Mutual liability insurance 1 mil single occurance 2mil aggregate for about 700.00 a year in Mi

Thats the company i have, i have 500k single occurance, 1mil aggregate and i pay $453 a year.

 

[Josh A.]

Thanks for the advice guys. I now have a list of points to consider- no doubt the tip of the iceberg. At least I am pointed in the right direction now!

 

[TreeClimber57]

Thats the company i have, i have 500k single occurance, 1mil aggregate and i pay $453 a year.

Another thing to consider is what is the deductable?

Not that you may need it, but have you ever asked how much it costs to go up in insurance? To go from $500K to $1M is likely fairly small..

Our jump from $3M to $5M was maybe $100.. (I think slightly less) and from $5M to $10M even less.

Just wondering..

 

[littlenick]

Another thing to consider is what is the deductable?

Not that you may need it, but have you ever asked how much it costs to go up in insurance? To go from $500K to $1M is likely fairly small..

Our jump from $3M to $5M was maybe $100.. (I think slightly less) and from $5M to $10M even less.

Just wondering..

I think its $500, id have to double check, im going to bump it up in the spring.

 

[TreeClimber57]

I think its $500, id have to double check, im going to bump it up in the spring.

Ok. I have found you can usually get a whole lot better deal if:
a) you get a good broker who you trust and has your best interest in mind
b) you get a reasonably high deductable, what you can afford and feel comfortable with - after all insurance is for the really big claims.. and you should pay the small stuff yourself
c) get the broker to look for a company package - if they have them - mine included a package taylored for tree services - but had dozens of clauses and features all bundled together -- and at better price than if he built same thing from scratch
d) get more insurance vs less.. allows you to bid on larger jobs, municipal jobs, whatever and have no worries.. and if you have above 3 items in place likely not a huge cost either.