When it comes time to get a tree removed or trimmed, most people research a few companies before deciding on hiring a specific company for their project. To minimize financial risk, one key decision factor should be making certain that a tree removal company is properly insured.
Tree service work is a very hazardous profession to workers in the industry—it usually is classified as one of the most dangerous careers, and according to Dr. John Ball, “Compared to all industries, tree workers have at least 15 times the fatality rate (Bureau of Labor Statistics 2020a) and three times the nonfatal rate (BLS 2018).”
If proper precautions are taken, a lot of the risk can be avoided. However, as a property owner, you one of the biggest precautions you can take is to make sure that a company has the right insurance.
There’s a number of different types of insurance it takes for a company to be fully insured. The three big ones you should insist on before hiring a contractor include General Liability Insurance, Commercial Auto Insurance, and Worker’s Compensation Insurance. Here’s a brief overview of what those cover:
General Liability Insurance: This covers several different risks, primarily including property damage, such as in the event a contractor dropped a tree on your house or a neighbor’s house while they were doing the work, and General Liability Insurance also covers injuries to non-employees if, for instance, a contractor dropped a tree limb on a jogger or runner who was passing by on the road. However, in the tree industry, General Liability insurance does not typically cover any employee injuries than an employee might suffer while working. In the tree industry, the normal standard is an insurance policy with coverage of up to 1 million dollars of coverage per occurrence. We carry coverage of up to 2 million per occurrence.
Commercial Auto Insurance: This covers damages related to vehicles and trailers, such as if a tree company backed into your house or garage. At least 1 million of coverage is often recommended, and we carry 1 million of commercial auto insurance coverage.
Worker’s Compensation Insurance: This is a very important insurance coverage that unethical companies often avoid, as it is very costly coverage to obtain. By law, any company in NY State with employees is required to have this coverage on all employees. Without this coverage in place, an injured employee will not be able to easily afford healthcare to pay for treating his injuries. While there are some safety nets in NY State, such as the uninsured worker’s fund, such methods of recovery for the worker are often time-consuming and difficult. A company that has employees, yet does not have this coverage is breaking the law. They often resort to paying their employees under-the-table or misclassifying them as subcontractors. We carry worker’s compensation insurance on all employees.
These three main insurances are all expensive. Yet without these coverages, you will be left with an unprofessional company and possibly even some costly property damage. Because uninsured companies often don’t pay payroll taxes on their employees, as they are typically paying their works under-the-table, you will often be dealing with unprofessional workers on your property, some of whom may be working under-the-table for other nefarious reasons, such as avoiding paying child support, or if they have committed crimes and have active criminal warrants for their arrest, they may be trying to work under-the table to avoid being detected by law enforcement.
Here’s 4 pitfalls to watch out for when checking for insurance coverage:
Having the wrong type of insurance coverage: Insurance coverage for a lawn-mowing company or handyman might have height limitations that doesn’t cover most tree work operations, such as a 10′ height limitation. If a company with an insurance policy with a height limit does tree work above that height limitation, and there is an insurance claim, the insurance may refuse to pay anything. If the company is a small company and there is a lot of damage, in all likelihood, they won’t have the funds to repair your house, so you or your homeowner’s insurance may be left footing the bill. Our insurance doesn’t have a height limitation.
Having General Liability Insurance, but no Worker’s Comp Insurance: A lot of these companies advertise themselves as “Insured” or even, deceptively use the term “Fully Insured”, yet many of them have no Worker’s Comp Insurance. They may even present you a certificate of insurance, but without Worker’s Comp listed on the certificate, General Liability Insurance alone usually won’t cover a worker injured doing tree work. If they have employees (even family members that work for them) and yet don’t have Worker’s Comp, they are breaking the law. If worker a gets injured on your property (perhaps even from something minor like tripping on a loose board on your front step, which you might have forgotten to mention), there’s the remote possibility they might then sue you. While these cases might resolve in favor of the homeowner in many cases, it isn’t worth the hassle or the risk of dealing with a company without insurance on their workers. We have worker’s compensation coverage on all employees.
Presenting a certificate of insurance, but the certificate is expired or forged: The company may look like it has all the proper insurance, and may even email you a certificate of insurance. Yet, the company may have had the insurance, and canceled the policy to save money or for other reasons. It’s also not unheard of for companies to use photo-editing software and forge a certificate of insurance, to make it appear they had coverage, when in reality no coverage existed in the first place. To avoid these pitfalls, look up the insurance agency listed on the insurance policy. Then type in the insurance agency’s name on the internet, and call up the agency to validate that all the listed coverages do indeed exist, and that the insurance does not have any height limitation on tree service work.
Here’s a summary of what you can do to protect yourself: in the estimate, ask if the company has General Liability, Commercial Auto Insurance, and Worker’s Comp insurance. If they do say they have those insurance coverages, ask if they can email you certificates of insurance for each of those (if a company purchases all insurance through the same agency, if may be on one insurance certificate; otherwise, there may be multiple). Once they have emailed you those certificates, look up the agent (s) information on the internet, and call them to validate that the coverage still is current and that the General Liability Insurance has no height limitation.
The cheapest company isn’t always the best—–while a cheap quote can be enticing, it can mean that a company is cutting corners on critical areas, such as proper insurance coverage. If you are looking for a fully insured tree service and landscaping company, contact Paul’s Landscaping of NY, LLC today.
