Uncovering the insurance required for Arboricultural contractors

As we enter the final quarter of 2008, most professional arboricultural contractors will be looking to re-new their insurance policies. Public/Employer’s Liability, Machinery and Professional Indemnity insurances are all on the menu along with vehicle and Personal Injury cover. Together their cost constitutes a substantial capital outlay each year and for a product we hope we never have to use!
Insurance is however a necessary aspect of professional trading in a high risk industry and, should the proverbial ever ‘hit the fan’, cheap at the price.  Contractors all expect and have the time to prepare for the weighty quotes but the issue that really needs to be addressed is again value for money. Are all insurance policies the same and do our customers realise the different levels of cover that tree climbing companies must have?

To my knowledge nearly all of the common names in insurance will provide cover for commercial vehicles, but the choice is significantly limited when Public Liability and Employer’s liability for working at height are requested. If we add to this the risk of using a chainsaw at height then most Personal Injury insurers also politely decline.
Quinn Direct and Trust Insurance are the only companies providing Commercial Liability policies for arboriculture in Ireland and Combined Insurance will cover for injury and sickness. With such a limited field, particularly for the commercial insurance, you would expect to find very similar cover, but this is not the case. Trust specialise in insurance for arboriculture and forestry whereas Quinn offer a much more diverse portfolio including Commercial Insurance for the Landscaping sector. They both offer similar quantities of cover for professional arboriculture but the differences lie within the restrictions and some of the additional features of each policy. A standard commercial policy will usually indemnify to a maximum of €6.5million but policies can be requested up to €13.5 million.

Trust Insurance offers a Commercial policy which has been tailored for arboricultural contractors and requires the contractor to produce relevant certification. The policy has no height restriction, no depth restrictions and covers work adjacent to highways. It also covers work on railways, power lines and airports, including spraying. Additional benefits which are also winning business for Trust are the provision of rehabilitation treatments for injured employees, Products Liability (products supplied such as fencing) and Professional Indemnity. In my opinion the most important and probably the most overlooked aspect of this specialist policy is the fact that the tree being worked on is also covered. Should the wrong tree be taken down or damaged in some way, the policy will cover this. All other Commercial policies exclude the item being worked upon.
Quinn Insurance are happy to match if not improve on some of the premiums quoted by Trust but policies do come with a height restriction of 30m maximum and may exclude many of the practices that Trust have tailored into their policy. Quinn were reluctant to provide me with information on the restrictions in their policy but assured me that they are meeting their targets for this industrial sector and continue to provide the very best service for their customers.

Making sure that your company’s insurance is adequate is not only of prime importance to us but should also be insisted on by our clients. Again, not all policies are the same and not all contractors actually possess an Insurance policy! As I have discussed in previous articles, the largest problem facing the professional arboricultural industry is the number of rogue traders or part time ‘professionals’ whom continue to de-value the specialist nature of the high risk services we provide. Lower quotes from un-insured and unskilled tree-cutters should be a thing of the past but more often than not, customers are willing to take the chance or simply assume that if a contractor has an insurance policy it will cover the task they are performing. Think again! If a policy has a height restriction of 10m for instance, work carried out on a tree which stands at over 10m in height will not be covered. To add to this, if the work is being carried out without the adequate qualifications or personal protective equipment there is already virtually no hope of securing a claim. Accidents do happen and peace of mind for our customers is part of the value we offer.
Many years ago I witnessed tree-surgery companies trading on landscaping insurance policies with as little as 5m restrictions just to be able to wave a document in front of a conscientious customer. In reality this was partly due to the contractor’s willingness to take a chance but also the exorbitant prices being quoted for insurance. Post September 11th quotations for insurance went through the roof. At one point the Arboricultural Association in the UK had to step in to negotiate with insurance companies and under-writers just to enable the industry to continue trading. Nowadays this is not the case. It is impossible to give a guide-line amount that contractors are paying because all policies are different but it could be suggested that insurance costs now are perhaps half or a third of the cost of those quoted in 2002, if you could actually get a quote back then!

So the last 6-7 years has seen a steady decline in the cost of insurance but the bad news is that it is not set to last for much longer. Premiums are cyclical. Again it is impossible to be specific about the timing of the next price hike, but certainly over the next 18 months the current broadening of the industry could be halted somewhat by a potential doubling of insurance costs. Geoff Parrish from Trust Insurance assured me that they have already put in place a number of measures to reduce the impact on the premiums of their loyal customers. Hopefully the other insurers will follow their lead in securing the future but also in maintaining communication with the industry and with regard to only insuring qualified individuals. This approach can only benefit the professional contractor and weed out those whom ultimately only serve to raise the cost of insurance for everyone.
If you are thinking about engaging a professional contractor or renewing your policies for 2009 the same thing applies- check the small print. However the good news is that if you do, you get what you pay for.