As a business owner for a tree service company, no doubt you understand all too well the dangers involved in tree trimming and other hazards that tree workers and arborists face.
Falling branches, overhead electrical lines, the use of dangerous tools and equipment, and inadequate safety standards in the tree care industry all contribute to a hazardous workplace environment for you and your employees.
One of the more common tree service injuries is through chainsaws, where more than 20,000 workers get hurt each year. Moreover, an average of 80 tree service workers dies each year on the job.
These facts underscore the need to have workers’ compensation insurance in place to protect your workers and manage your financial risks. If an employee of yours is hurt on the job, you and your tree business could be held legally liable for their injuries or death.
Either of those scenarios has the potential to place your business at risk. It’s in your best interest and your employees to carry workers’ comp to mitigate those risks.
More About What Workers’ Comp is and Why You Should Have It
Most states require employers to carry workers’ comp when they have employees working for them. The intent of worker’s compensation laws is for businesses to have a way to pay for medical expenses and wages if a worker is hurt on the job or has an illness related to their employment. Should one of your tree service workers die while working for you, workers’ comp also provides coverage for that.
Worker’s compensation may protect you from lawsuits and help manage your financial risks if a worker gets hurt. Some workers’ comp policies also have safety programs and manage care programs that can minimize how long an injured worker is out of work.
Requirements and rules vary from state to state, but it’s important to note that workers’ comp doesn’t just protect your employees. It protects you, the employer. Aside from your business itself, your most important business asset is your employees.
Depending on which state you’re in, most businesses can obtain a worker’s comp policy through an insurance agent. But some states, such as Ohio, North Dakota, Wyoming, and Washington, mandate that businesses get worker’s compensation coverage through their state. Texas is the only state that allows employers to opt-out of workers’ comp obligations.
What does Workers’ Comp pay for?
Workers’ comp will pay for any job-related illness or injury that any of your arborists or tree trimming workers receive. Workman’s compensation benefits will cover:
- Missed wages
- Medical costs
- Any ongoing care
- Funeral expenses
To clarify, workers’ comp won’t pay for injuries or illnesses your employee receives away from the job. It may not pay benefits to employees who are overtly reckless or perhaps perform their work while intoxicated.
Sometimes, even in the best of circumstances, accidents happen, particularly in the tree service industry. While safety is paramount in the tree trimming business, there are times when an employee can still get hurt or sick while working for you.
Workers’ comp ensures that injured workers will receive the medical treatment they need while also offering them a way to continue receiving a salary.
It also protects you and your business. Suppose you didn’t carry workers’ comp insurance. And, an employee falls 40 feet from the air while trimming branches, breaking their neck and back in the process. A single major incident like that could render substantial financial harm to your business should you be held liable for medical expenses, loss of wages, or funeral costs.
There’s also evidence that workman’s comp insurance helps workers recover and get back to work more quickly after an illness or injury. This means more productivity for your business while saving you the headache of training and hiring new workers.
In the end, workers’ compensation insurance is a wise investment for your business. Without adequate coverage, any losses suffered by an employee could potentially come out of your own pocket and cost thousands or even hundreds of thousands of dollars or more.
What to Look for in a Workers’ Comp Policy
One of the top considerations when looking for a workers’ comp policy is to ensure that the policy is specifically tailored for tree service businesses.
Workman’s comp for your industry will cover injuries and illnesses received by your arborists or other tree care workers, be it from a fall from a bucket truck, a slip or fall, electrocution, chainsaw injuries, or death that could result from tree stump grinding or tree limbs being removed and more.
You’ll want to carefully consider the policy’s terms, limitations, and deductibles while weighing them against the premium costs and fees. You want to choose the best value considering what you’re paying for.
As a responsible business owner, you’ll also want to make sure the policy aligns well with your state’s requirements.
It’s also wise to consider any exclusions or conditions the policy outlines in the coverage. For example, if you cross the state line to do a work project, will the policy cover your workers? Or, if your employee is injured because of their own negligence, will he still be able to recover lost wages or receive medical help on your workman’s comp policy?
You may also want to inquire about claims management programs, which many tree service insurance companies offer.
Evaluate the entire policy, what’s offered, and how it compares to other policies. This can help you decide which is the best workers’ comp policy for your tree care business.
Reducing Workers’ Comp Premiums
Because of the nature of the work in the tree service industry, premiums can run higher for workers’ compensation insurance than in other sectors. Tree trimming and removal, stump grinding, working near power lines, and other dangerous conditions in the tree care industry make it more likely that one of your workers will get hurt.
Like many other insurance premiums, one of the factors influencing your premium will be how safe your employees are and how often you have to file claims.
Here are some ways to manage your premiums and make the most of your workers’ comp coverage:
Implement workplace safety programs.
OSHA offers guidance on safety and health programs for tree service businesses as well as its own requirements on its website. By far, keeping your clients as safe as possible can go a long way in helping to reduce worker’s compensation premiums. This means issuing appropriate PPE (personal protective equipment), documenting safety policies, and adequately training your tree service workers. Tree trimming workers and arborists should have training on electrical hazards, first aid and CPR training, lockout and tagout training, workplace safety training, equipment training, and any other relevant training to help promote safety on the job.
Communicate about hazards that can affect employees.
If you have a situation when your employees will be exposed to harmful substances, it’s a good idea to brief them on it. Encouraging protective measures to prevent harmful effects is also necessary to avoid unpleasant outcomes. Some states also have OSHA requirements that must be adhered to, so it’s wise to be aware of those rules.
Meticulously document all adverse events impacting your tree service workers.
This means good recordkeeping of all occupational injuries and illnesses. OSHA requires this if you have more than ten arborists or tree service workers employed by you through the year. But, anytime you have an employee that becomes injured or sick or dies from an incident, document each case at every interval, i.e., when the event occurs when the employee is sent for evaluation, when they receive treatment, when they’re out of work, and perhaps just as importantly, when they return to work. Each year, when your premium is up for renewal, there’s a premium audit process that assesses your workplace’s history of claims and safety record. The more claims that are closed and documented as such, the better it’ll look for your business, perhaps earning a more favorable premium.
Become familiar with Workers’ Comp class codes.
Class codes are part of a system that workers’ comp insurance companies utilize to classify specific lines of work. This helps them to categorize the different types of work and rate them by their level of danger. It’s vital for you as a business owner to be very specific when going through the underwriting process for your employees’ workers’ comp insurance. This is because, for instance, an arborist whose duties are mostly in tree care rather than removal would likely have a lower premium rate than a worker who is operating a bucket truck and working near power lines. When a premium audit comes around, an insurance company will tally the workers in each class code and factor in the losses from each. If your business has losses above or below the tree industry’s average, it is likely to be reflected in your insurance premiums. Incorrect usage of class codes can result in higher premiums or even claim denials. It’s imperative to document them right.
Beware the ghost policy loophole.
Some business owners have been tempted to avoid paying workers’ comp through a loophole in the law known as the ghost policy. This type of policy was created to offer employers who have no employees proof of insurance. These businesses often pay their workers off the books to avoid workers’ comp premiums. This is like playing Russian Roulette with your business. The problem with this unwise decision is that it places employees at a considerable and unnecessary risk of not receiving adequate care in the event of a work-related injury or illness. The employee is likely to become more desperate and sue their employer to get the help they need. Any business owner who has workers and engages in a ghost policy stands the chance of losing their business altogether. First, from not complying with state law. Secondly, from a lawsuit arising that bankrupt them. The truth is that ghost policies offer no benefits whatsoever.
A comprehensive workers’ comp insurance policy is critical and necessary to preserve the integrity of your business’s financial wellbeing as well as to protect your employees.
A specialized, targeted policy for tree service workers and arborists helps reduce the risk for both you and your workers.
Safety is paramount in the tree trimming and stump grinding industry and can help keep your workers safe and workers’ comp premiums down.
Consult a knowledgeable tree service insurance professional to learn more about keeping your workers safe and protected through workers’ comp coverage while also offering a safety net for your tree care business.