Understanding Insurance Options for Tree Care Vehicles with Permanently Mounted Equipment

Author, Rory Anderson, Account Executive, Rancho Mesa Insurance Services, Inc.

The vehicles that tree care companies are using today have become more specialized and mechanized than ever. These specialized vehicles contribute to the overall productivity, profitability, and safety of the tree care industry.

Many vehicles in a tree care company’s fleet have permanently mounted equipment. The crane is a great example. Both the knuckleboom and straight boom crane are permanently mounted onto the cab and chassis. Obviously, the value of the vehicle significantly increases the moment the crane is mounted.

When placing insurance coverage for this unit, it is important to understand the options. The liability coverage for specialty vehicles will always be insured on the commercial auto policy. However, when insuring the physical damage to your unit, you may have a couple different options.

The commercial auto policy will value the physical damage on actual cash value, which is a depreciated value. Actual cash value equals the replacement cost minus depreciation. In the event of a physical damage claim, the commercial auto insurance carrier will factor in depreciation when determining the amount to pay out for the claim. If you have an older crane, this may be an acceptable way to provide coverage. Just be certain that your insurance broker and carrier have the total value, including the crane, for the vehicle.

You can also split the physical damage coverage between commercial auto and inland marine. Often times, you can get replacement cost valuation on the inland marine policy, which is a more robust valuation. Replacement cost is the cost of a new one today, without factoring in depreciation. You can cover the physical damage of the vehicle (cab and chassis) on the commercial auto policy, but then you can cover the crane itself on the inland marine policy and get the replacement cost valuation. This strategy might make more sense if you are insuring a new, and expensive, crane. In the event of a total loss, the difference between actual cash value and replacement cost can be staggering.

Properly insuring your assets is a fundamental aspect of your risk management program. It is crucial for protecting your company’s financial stability. It is also important to work with your insurance broker to understand how your current insurance company will handle this.

If you have any questions, please reach out to me at (619) 486-6437 or randerson@ranchomesa.com.

Surviving the Blaze: Developing Asset Relocation Plans in Wildfire-Prone Regions

Author, Rory Anderson, Account Executive, Rancho Mesa Insurance Services, Inc.

As a tree care company operating in wildfire-prone areas, the safety of your crew, equipment, and vehicles is paramount. Wildfires can be unpredictable and devastating, posing a significant threat to your valuable assets. To mitigate risk of potential losses, it is important to have an effective asset relocation plan in place. This plan ensures that in the event of a wildfire, your vehicles and equipment have a safe place, reducing the risk of damage or total loss. This safe relocation address should be in an urban area, surrounded by buildings – not rural vegetation. It can be a mall parking lot or any urban lot. Let’s explore the reasons why having an asset relocation plan is crucial for tree care companies.

Reduce Insurance Costs

Insurance is a critical aspect of risk management for tree care companies. While insurance can help cover losses from wildfires, having a well-executed asset relocation plan can potentially lead to reduced insurance premiums. Insurance carriers may view your proactive approach to asset protection as a lower risk, leading to more favorable terms and lower premiums. This can result in cost savings for your business.

Protect Your Investments

Tree care contractors often invest in specialized equipment and vehicles, which are essential for their operations. A wildfire can damage these valuable assets, leading to significant financial losses. An asset relocation plan allows you to move your equipment and vehicles to a safer location to protect your investment.

Ensure Business Continuity

The aftermath of a wildfire can be chaotic. Having an asset relocation plan in place ensures that your equipment and vehicles are moved to a secure location well before a wildfire strikes, keeping your assets safe. This allows your business to continue operating after the disaster with minimal disruptions. Maintaining continuity is essential for your income and reputation.

An asset relocation plan is an important component of your risk management program as a tree care company, especially if you’re located in a rural area. If your business is located in California, Cal Fire has a valuable online resource called Fire Hazard Severity Zones Maps. This resource shows the areas in your county that are considered high fire hazard severity zones. It is recommended that you make your relocation address somewhere where the fire hazard severity is considered low or moderate.

Should you have further questions on this topic, reach out to me directly at randerson@ranchomesa.com or call me on my direct line at (310) 753-6804.

Improving Safety with Mechanization in the Tree Care Industry

Author, Rory Anderson, Account Executive, Rancho Mesa Insurance Services, Inc.

Mechanization refers to the process of introducing machinery, equipment, or automated systems to replace human labor. Today, the tree care industry is becoming more mechanized with many technological advancements that are greatly improving the productivity, profitability, and safety of the industry. Let’s focus on safety.

Tree care accidents can be unforgiving and can have major consequences. Here are some safety benefits that come with mechanization:

• Reduces manual labor: mechanization reduces the amount of physical labor required to perform tasks. Tree care tasks are physically exhausting. Specialized machinery reduces the strain on workers, minimizing the risk of fatigue-related accidents.

• Improves efficiency and reduces exposure to hazards: Mechanized equipment reduces the time workers spend in potentially hazardous situations, working at heights or in proximity to heavy tree limbs. By executing tasks more quickly and accurately, it reduces the overall exposure to potential accidents and hazards.

• Reduces human error: even the most experienced arborists can make mistakes. Machines can mitigate human error by using automation. For instance, tree removal machines with automated cutting and lifting mechanisms can carry out tasks precisely as programmed.

• Promotes training: the use of mechanized equipment requires special training and certification. This contributes to a higher level of competency and safety awareness within your organization.

Mechanization is the future of the tree care industry. Of course, traditional methods must always be available. However, we can limit our human footprint and liability by investing in this new-age equipment. Fewer accidents increases productivity and profitability.

For questions please contact me at (619) 486-6437 or randerson@ranchomesa.com.

Pollution Liability for Tree Care Companies

Author, Rory Anderson, Account Executive, Rancho Mesa Insurance Services, Inc.

Most tree care companies use pesticides, herbicides, fungicides, and other chemicals as a part of their operations. Even if the company does not offer plant health care, many tree care professionals still use hydraulic fluids, gasoline, and other fluids to operate or maintain equipment and vehicles. The use of heavy equipment and chemicals, while operating exclusively outdoors, opens the company up to environmental exposure.

Pollution coverage is a standard exclusion on any general liability policy, but business owners can cover this exposure with a stand-alone contractor’s pollution liability (CPL) policy. CPL insurance is distinct in that it offers protection for contractors in the event their work, or any work done on their behalf, leads to a pollution or environment-related claim of bodily harm, property damage, cleanup and other remediation expenses. In today’s green and eco-minded society, filling this gap is more important than ever.

If the tree care company offers plant health care as a service, the herbicide/pesticide applicator coverage endorsement is an important part of your insurance program and can offer some coverage to replace damaged or dead plants/trees in the event an arborist mixes a bad batch or over sprays. However, the herbicide/pesticide applicator coverage endorsement may not pick up remediation efforts, or the business interruption losses that result from the clean-up. The best way to transfer your environmental exposure would, again, be putting a contractor’s pollution liability policy in place with at least a $1,000,000 limit.

Pollution liability insurance is an important part of the risk management strategy and can help protect tree care contractors from environmental liabilities by providing coverage for legal fees, cleanup costs, and other expenses associated with environmental pollution.

For a policy review or questions about which policies match your tree care company’s risks, please contact me at (619) 486-6437 or randerson@ranchomesa.com.

Mitigating Pollution Liability Exposure

Author, Sam Clayton, Vice President, Construction Group, Rancho Mesa Insurance Services, Inc.

No matter what trade, contractors face environmental risks from their operations. Contactors pollution liability (CPL) insurance has now become an integral part of a contractor’s insurance program. The industry is seeing contractual requirements for this coverage from a combination of owners, developers and general contractors for projects of all sizes.

While many contactors assume their commercial general liability (CGL) policy would cover a pollution claim; the unfortunate reality is that most CGL policies have pollution exclusions that leave contractors uninsured in the case of a pollution incident.

Pollution incidents are causing some type of contamination on a job site. And, contamination is the operative word in all pollution exclusions. With such a broad definition extending to so many types of construction, it is important to understand how a pollution incident can happen on the jobsite.

Pollution incidents can happen to contractors in many trades. Real-world examples include:

• An HVAC system is installed improperly, which over time, causes moisture and ultimately mold to spread throughout a residential building, causing bodily injury and property damage.

• A painting contractor does not properly ventilate a residential facility causing exposure to fumes which lead one or more residents to hospitalization.

• Dirt being excavated from one area of a job site to another is contaminated with arsenic and lead. The chemicals are then spread to a larger area which is later found by a soils expert.

• Construction equipment on a project site has hydraulic fuel lines cut by vandals, causing fuel to leak out and contaminate the soil.

• A contractor punctures an underground storage tank during excavation, causing the product to spill into the soil and groundwater.

In addition to implementing an effective plan to reduce the likelihood of pollution incidents on the jobsite, a best practices approach to protecting contractors from this type of exposure is to transfer the risk to a CPL policy.

Contractors pollution liability insurance provides coverage for third party bodily injury, property damage and pollution clean-up costs as a result of pollution conditions for which the contractor may be responsible.

A pollution incident can include the discharge of pollutants brought to the job site, a release of pre-existing pollutants at the site or other pollution conditions due to the performance of the contractor’s or a lower tier subcontractor’s operations. In addition to the potential loss of reputation, often overlooked expenses that can negatively impact a profit and loss statement are the costs incurred to defend a company involved in a pollution claim.

Contact me at (619) 937-0167 or sclayton@ranchomesa.com if you would like to discuss your pollution liability risk.