Thursday, September 22, 2016

If a tree falls in the forest, will your insurance company hear it?

Not meant to be state the obvious, but homeowners should know the importance and requirement of carrying insurance. However, and more importantly, whenever work is being done on or around your home – windows, siding, driveway, roofing, remodeling or landscaping – it’s critical that those conducting the work carry their own insurance. Not checking this important box when hiring a contractor/service could expose you to great liability in the event of an accident.
Each year, billions of dollars in claims related to damage caused by fallen trees and tree limbs are paid by insurance companies. In response, some insurance companies have required that only qualified, licensed tree removal services perform removals for their clients. In some cases, it’s more expensive so homeowners choose to ‘go with a contractor.’ However, sub or general contractors without the proper know-how for this dangerous activity, increases liability exposure for homeowners who may think the ‘add on’ insurance charge isn’t worth it. Is it?
Tree work is rated as the fifth most dangerous profession in the United States. Safely removing trees from around buildings and homes require specific expertise. This may require the use of cranes, rigging, an electrical expert or any other specialist like an arborist. Not knowing the complexity required to properly remove a tree can be a recipe for disaster.
There are many general contractors that perform tree removal services – and many are not licensed. Depending on the state, local governments may have special licensing requirements and may impose fines if not followed. Similarly, municipalities have adopted tree ordinances which require a permit for tree removal services. In addition to the potential risks in the removal – most significantly, property or personal injury – penalties and/fines can far surpass the cost of having a compliant tree removal service in the first place.
Certain types of tree care services are not covered under standard General Liability insurance policies and create financial exposure for underinsured companies performing the work. Unless a contractor carries Errors & Omissions (E&O) insurance which is purposed for tree care work, they are putting themselves and their workers at great legal liability. Additionally, contractors don’t always know the proper way to document the potential for collateral damage when performing tree removal services – which is important to communicate with an insurance provider prior to any work being started.
Over time, insurance companies have become more prudent with auditing tree removal claims ensuring these claims are not a result of additional property damage caused by underinsured or unqualified professionals. In some cases, programs have been implemented to place dedicated/vetted tree removal services prior to a major weather event to help mitigate improper claims caused by uninsured contractors – helping their policyholders before they need it.
All this to say: Know what is covered by your current insurance policy and by all means, ask for the right credentials when hiring your next tree removal service.

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