State of the Marketplace | Insurance and the Tree Care IndustryMay 19, 2021
Written by Brad Brezina, Client Advisor
The tree care industry saw tremendous growth last year and shows no signs of slowing down just yet. The “work from home” transition brought with it renewed excitement for home and yard improvements. Interviews with tree service companies are frequently revealing a 20-40 percent revenue increase from 2019 to present. Owners and operators are experiencing a growing backlog ranging from one week to, in some cases, a month or more.
But the rising demand isn’t limited to tree maintenance. Last year’s storm season proved to be one of the worst in recent history and already in 2021, we’ve seen tornadoes and flooding early in the storm season. The Southeast is known for its beautiful trees and those trees bring real risk.
More than ever, this increase in demand and fast paced industry movement highlights the importance of a carefully managed insurance program and the dangers of putting it on the back burner.
We recently interviewed several workers compensation providers in the tree care industry and they anticipate slow, regionally specific rises in costs.
Climbing for tree maintenance is high risk and one of the most frequent injury claims — from soft tissue damage to catastrophic and even fatal accidents. Chain saw use also impacts both the frequency and severity of claims. The inherent quick pace of the business and lack of safety equipment or proper training is the main driver of the severity of these situations.
The advancement in safety technologies, however, continues to positively affect these risk exposures. Remote grapple saw cranes and the mobile lifts are steadily reducing climber use and limiting height exposure for employees. We hope to see more use and risk mitigation from these types of innovative equipment.
To keep your team safe, owners must:
- Require and enforce the appropriate PPE gear, including hard hats, gear, lace up boots, tight fitting clothing, reflective gear, eye protection, and ear protection
- Implement, at all times, a drop zone for each tree removal
- Train (and train again) on proper safe-handling of equipment (including chippers and saws) and proper techniques for getting in and out of equipment
The auto insurance market continues to be one of the toughest for insurers today. Large legal payouts drive vehicle rates. Pressures of timely work and backlogs are causing companies to work longer hours and cut corners when on-boarding new hires quickly to complete projects.
Cell phone use while driving and unqualified drivers lead the list of causes for ongoing claims we have seen over the last year. There is an increase in both the frequency of claims and also the severity of claims filed.
To protect your team, owners should:
- Enforce proper driver training and adherence to safe driving practices
- Prioritize safety over speed when traveling between job sites
- Maintain your vehicles – Maintenance matters, especially with large trucks. Document and manage vehicle maintenance logs
General liability claim activity remains consistent, so we do not anticipate an industry-wide increase in premiums due to claim severity. Negligent rigging and cutting lead the causes for liability claims. An ongoing concern and point of interest for insurers is the use and management of the crane as it relates to residential customers – the placement of the crane and the expertise of the operator and climber.
Best practices for general liability include:
- Create a written staging plan for each job and ensure relevant training is completed by the job’s team
- Implement a written contract with your customer outlining each party’s responsibility
- Train employees on proper placement of equipment and corridor utilization for removing debris
The future for the tree care industry in 2021 is strong. We foresee record sales and a continued focus on growth and equipment acquisition. The upcoming hurricane season is expected to be very active on the East Coast – preparation and risk management is key. We encourage you to mitigate your exposures where you can and prepare for those you can’t by investing in your employees, equipment, and safety protocols.