How Much Insurance Should a Tree Service Have?
Trees are valuable additions to any yard, but they can also become very dangerous if they fall over. Accidents involving large trees can cause severe injury or death to individuals on the ground, not to mention the major damage that broken branches and uprooted trunks can do to buildings and other structures. Therefore, it’s important that tree services have adequate insurance coverage in case they are held liable for damage done by their work. This article will discuss the best types of insurance to carry as a tree service company, as well as what all of this insurance covers and how much it costs.
So How Much Insurance Should a Tree Service Have
A tree service with a decent amount of insurance will have enough coverage to cover lawsuits for property damage, health care expenses, death, and personal injury. For example, a tree service should carry Property and Casualty and Workers Compensation coverage for its most important locations and most valuable assets. As far as the amount of coverage, you should have $1 million in liability limits for each location, along with $1 million in workers’ compensation limits, with $5 million in coverage for each location. If your company owns any vehicles, you can either buy separate auto liability insurance or simply add auto coverage to your work insurance policy. In essence, the amount of coverage is whatever you think you will need it for.
1) General Liability
This coverage pays for any bodily injuries to anyone on the job site. This includes employees who get hurt on the job, subcontractors, customers of the tree service, and even visitors of the job site. If it’s a very large tree being removed from a yard, then it’s possible that anyone walking by could be injured. For that reason, you should purchase General Liability coverage that includes $500,000 to $1 million in liability limits for each location.
2) Automobile Liability
Auto Liability coverage is the minimum requirement for auto insurance in most states, but it will also come in handy for any vehicles that are used on the job. If these vehicles are used on the job site but are not insured, then you will be personally responsible for any damages or injuries that they cause. This would be very expensive to pay out of pocket, so it’s important that you purchase this insurance before you start driving that vehicle to work.
3) Worker's Compensation
Worker’s Compensation pays for any injuries suffered by the employees of a tree service company. This includes individuals both on and off the job site, and it is usually a state-mandated requirement. While Worker’s Compensation does not cover a company for accidents on private property, it does cover any employees that are contracted to work at another location. For example, a tree service will be legally required to carry Worker’s Compensation for individuals contracted to do work at a private residence. This would also include any employees that are working with a customer on the job site, such as a tree trimmer who is using a chainsaw. Workers Compensation has no dollar limit, which means that it will pay no matter how close to death the worker is after suffering the injury.
CHOOSE A TREE SERVICE WITH THE RIGHT INSURANCE
In total, a tree service should have $500,000 to $1 million of insurance coverage to cover any lawsuits for property accidents, personal injury, and death. While this amount of coverage is certainly much higher than the standards set by the insurance companies, we suggest that tree service companies always carry more coverage than that. You want to be able to pay for any and all damages and injuries that your business will cause to both people and their property.