Having a tree service company requires responsibility. You may be cutting branches, clearing large trees, or operating heavy equipment, and there are dangers that could lead to property damage, injury, or even lawsuits. This is where tree service insurance comes in. It aids in insuring your business, employees, and clients against any eventuality that may occur when you are working. But how much does tree service insurance cost? This blog will discuss what influences the cost of tree service insurance, the kind of coverage you require, and how you can obtain the most affordable premium.
Why is Tree Service Insurance Important?
Tree service is risky, not only to your workers but also to the surrounding property. Whether it is working with heavy equipment or working with heights, accidents may occur. Tree service insurance is meant to cover your business against an accident, injury, or damage.
Types of Tree Service Insurance
A tree service business does not have a single form of insurance, but rather, a number of policies that combine to give full coverage.
These are the most popular kinds of insurance you will require:
General Liability Insurance
One of the most significant types of insurance that a tree service company should have is general liability insurance. It saves your business against third party claims of injury or damage to property. An example is when a branch falls on a car of a customer or one of the customers is injured in the process of trimming the trees; this insurance will assist in covering the expenses.
Cost: General liability insurance may vary in price, but on average it may cost you between $500-$2,000 a year depending on the size of your business and the amount of coverage you want.
Workers’ Compensation Insurance
Tree service is a very risky job, and accidents can occur. Workers’ compensation insurance assists in covering the medical bills and lost income of the workers who are injured at the workplace. It also saves your business against possible lawsuits that might occur in case an employee is injured at work.
Cost: The costs of workers’ compensation are usually estimated as a percentage of your payroll. The range of workers’ compensation is between $2 to $6 per 100 dollars of payroll in tree service business.
Commercial Auto Insurance
If your tree service company has vehicles (trucks, trailers, or any other equipment) to carry tools or materials, you will require commercial auto insurance. This coverage safeguards your cars and any third-party property in case of an accident. It even includes the damage of your equipment during transportation.
Cost: Commercial auto insurance usually costs between $1,000 and $3,000 per year depending on how many vehicles are being covered, their value, and whether or not your employees have a good driving record.
Equipment Insurance
Tree service companies use costly equipment and machines, including chainsaws, chippers, and cranes. Equipment insurance assists in covering such tools in case they are damaged, lost, or stolen. The absence of equipment insurance can be a big blow to your business as the replacement of costly equipment may be expensive.
Cost: Equipment insurance will cost you approximately $500 to $1,500 annually, depending on the value of equipment you want to insure.
Professional Liability Insurance (Errors & Omissions)
Errors and omissions insurance (also referred to as professional liability insurance) covers your business in the event that a client sues you based on bad advice or services. In case of any accidental damage or injury that leads to loss of property or injury, this insurance will assist in paying legal fees and settlements.
Cost: Professional liability insurance ranges between $500 and $1,500 annually, depending on the size of your business and the type of coverage you choose.
Factors That Affect the Cost of Tree Service Insurance
A number of factors determine the amount you will pay for tree service insurance. These factors can assist you in estimating your premiums.
Size of Your Business
Bigger companies that have more workers, cars, and machinery tend to have higher premiums since there are more resources and people to cover. If you are a small tree service company that has a small number of employees, then your premiums will be lower.
Risk of Services Provided
The more complicated or hazardous the tree service, the higher the premiums. In a case where your company deals with large tree removals that involve the use of cranes, this will make the risk factor more, and hence, the insurance cost. The provision of less risky services, such as trimming of small trees or simple maintenance, will lead to reduced premiums.
Location
The insurance cost may be influenced by the location of your business. Your premiums might be more expensive if your business is in a region where there is a likely chance of a natural disaster like high winds, hurricanes, or heavy snowfall. Higher premiums can also be observed in urban areas that have a greater number of competitors.
Claims History
When calculating your premium, insurance companies look at the claims history of your company. Your rates may go up if your business is associated with accidents or claims. Conversely, a clean claims history may enable you to obtain lower premiums.
Coverage Limits and Deductibles
The larger the area that you require coverage, the more expensive your insurance will be. Likewise, when you choose low deductibles (the amount you pay before your insurance covers you), the premiums will be high. Always aim to strike a balance between low premiums and coverage that you require to secure your business.
How Much Does Tree Service Insurance Cost?
Insurance coverage on average may cost between $3,000 to $8,000 annually for a small-to-medium sized company.
This is a breakdown of estimated costs by the types of coverage:
- General Liability Insurance: $500 to $2,000 per year
- Workers’ Compensation Insurance: $2 to $6 per 100 dollars of payroll
- Commercial Auto Insurance: $1,000 to $3,000 per year
- Equipment Insurance: $500 to $1,500 per year
- Professional Liability Insurance: $500 to $1,500 per year
