Succession Planning

by Katie Petersen | Jan 3, 2023 | Business Strategy | 0 comments

Succession Planning

Written by Kevin Martlage

The great Mark Twain once wrote, “Plan for the future because that is where you are going to spend the rest of your life.” This quote embodies what I feel is a key point when you think about the importance of succession planning. Without properly planning for the future from a personnel standpoint you may still be successful, but can you sustain that success when unforeseen, or even planned, circumstances or opportunities arise?

My personal definition of succession planning has been developed over 25+ years of leadership roles in both the for-profit and non-profit setting. While I have worked with some very specific succession planning processes like the one we used at FedEx Office, I have also had to develop my own when the organization I worked for did not have anything specifically outlined. Regardless of the process used or my thoughts behind succession planning, there is one key aspect that makes it one of the most important things you will do as a business owner. That one aspect is sustainability.

Throughout my career leading 100’s of employees and volunteers both domestically and internationally, I have created a process for succession planning that is based on the intentional development of my team as they continue to advance the strategic direction of the organization. Specifically, that definition is:

“Succession planning is an intentional leadership development process that ensures

Strategic, operational sustainability and growth for any organization or team.”

So that is my definition of succession planning, but why is succession planning important and something you should consider? If I completed an informal survey of the tree care industry regarding issues impacting the sustainability of each company, I can almost guarantee that employee retention and development would be in the top 3. Additionally, I would argue that other things keeping Tree Care company owners up at night, besides revenue and finances, is what happens if someone calls in sick, decides to leave my company for another job, or that tenured employee decides to finally retire? Who are we going to promote as we introduce our new service offering, or who’s taking over for me when I decide to retire? All valid questions that typically are not addressed until one of those things happens. All those reasons listed are why succession planning is important and should be carefully considered when running your business.

If you do succession planning research online, you will find numerous definitions and approaches to the process. However, you will quickly notice themes to succession planning, regardless of your approach, that must be in place. Those themes include:

A formal process to evaluate your team
Understanding the critical positions necessary to sustain operations
The ability to identify key skills necessary for each of those position
Intentional commitment to aligning individual skills with your strategic direction
A process to intentionally and transparently develop your team to ensure critical positions and skills are maintained should someone leave or get promoted
An intentional commitment to excellence and to the process

To start the development of your organizational succession plan, I would recommend you begin with the creation of an organizational chart for your company. If you already have one, great. If you do not have one, you can easily create one using Power Point or simply draw it out on a white board or piece of paper. This visualization will help you in seeing your organization from a holistic viewpoint and will allow you to facilitate the next part of the discussion.

Next, I recommend you identify a few key aspects of each position you have outlined. To help facilitate this part of the conversation, a best practice is to bring in a third-party consultant or trusted advisor to help ensure confidentiality, transparency, and consistency in the conversation. This will also allow you as the business owner to remain impartial and critical as you discuss the following for each position:

Length of time in position
Top 3 skills
Potential position vacancy in the next 6-12 months
Ability and desire or that person to be promoted to the next level

Those last 2 questions may be difficult for you, or your leadership team, to answer and will involve some level of confidentiality and intentional conversations as you assess your team regarding those areas. However, they are critical pieces of the overall process for you to consider as you continue to create your success plan. When evaluating those last 2 areas, I recommend considering the following criteria:

Position vacancy in the next 6-12 months

Is the employee on performance management or at risk of losing their job?
Are they well placed in their current position?
Will the position be vacated by the person being promoted internally?
Are they ready for and eligible for a promotion within the company?
Is there potential for them to leave the company for another position?

Ability, opportunity, and desire to be promoted to the next level

Do they want to be promoted?
Are they ready to be promoted to the next level?
Are they well placed in their current position?
Do you foresee them filling the next level position within your company?
Is there an opportunity for upward advancement within your company?

Once you have identified these areas for each member of your team, you will start to identify some gaps or opportunities for focus to ensure proper succession planning is in place. This process can take some time to go through, but it is critical as you continue to plan for the strategic sustainability of your team.

As you identify those opportunity areas, the next step would be to plan how you will address and fill those gaps to ensure sustainability. This can be done through strategic hiring of new employees, creating employee development action plans, and having critical conversations with the team. For suggestions on how to develop these follow up pieces of your plan, I would recommend you reference the following Arborisk Articles I have previously written:

“Outlining a Career Path for Your Team” – January 2022
“Building Trust with Intentional and Transparent Communication” – May 2022
“Reaching New Heights by Planting a Tree” – September 2022

Creating a succession plan and critically assessing your team and company will help to ensure operational sustainability. This will also strategically prepare you for any upcoming scheduled service disruptions regarding personnel, as well as be flexible and prepared for the unforeseen. The items outlined in this article are provided to help you understand the importance of this process, but I would encourage you to also reach out to the Arborisk Team if you would be interested in discussing succession planning further.

The Arborisk Thrive program provides helpful information regarding effective hiring, recruiting, on-boarding, leadership development, and succession planning. Please check out the Risk Management Packages located on the Arborisk Insurance website to learn more.

If you want your company’s leaders (managers, crew leads, etc.) to grow professional and truly become extraordinary, check out ArboRisk’s Thrive Leadership Development Package! Our experts will work with your leaders one-on-one to build their leadership skills, thereby increasing team loyalty, efficiency, and profitability.

Working with a Recruiting Firm

by Katie Petersen | Jan 2, 2023 | Employee Management | 0 comments

Working with a REcruiting Firm

Written by Eric Petersen, CIC

I recently used a recruiting firm to hire our latest team member and let me tell you, I was overwhelmed by the ease of the process and the quality of the candidates that we received. I was so impressed that I felt that I should write this weekly tip about working with a recruiting firm to encourage tree care companies to look in this direction for their next hire.

Historically, I had been closed off to the idea of using a recruiting firm to find new employees as I figured the recruiting firm would have a hefty price tag for finding top talent for me. However, like many tree service owners, as my business has grown so have my responsibilities and the time that I can spend on any one area of the business has shrunk as I’m pulled in so many directions. I’m sure most of you can relate to the feeling of not having enough time to commit to finding great people for your company, but knowing that it should be a priority of yours. This feeling ultimately led me to contact a recruiting firm to inquire about candidates for a new position that we had just created. I still was skeptical but thought I should give it a chance.

Immediately, and I mean immediately, after getting off the phone with the recruiter, I had 12 resumes of very qualified potential employees. They were 12 individuals of varying backgrounds and experience, probably all very capable of doing the job that I didn’t have to go find. All I had to do was tell the recruiter which ones I wanted to interview and they facilitated the conversation. Now, the rush of emotion that came over me was totally different. In a matter of minutes, I was feeling so confident that we were going to find someone to fit our agency that I realized the power that this form of hiring has.

We ended up doing an initial interview with 5 of the 12, a second interview with 3 of them and a third interview and personality profile assessment with the final 2. The outcome was hiring a fantastic new team member (Hey Liz!) in a matter of weeks as opposed to the process taking months if I had to do it alone. Not to mention the fact that I can almost guarantee our paths would not have crossed if it were not for the recruiting firm.

Though I’ve only had one experience with working with a recruiter, I did learn a few tips that I want to share with you.

1. Understand the Value of Your Time – The time that it took for me to hire through the recruiting firm was a fraction of the time that it would have taken me and my team to post the job posting, filter through resumes, set up initial interviews, etc. All of that time that I would have spent on those activities was focused back into our business, where it allowed me to make a bigger positive impact for my team than the fee we had to pay the recruiting firm. In our situation, we paid 25% of her first year salary as the fee for the recruiting firm bringing her to us. At first, that seems like a lot of money, but considering how easy it was and how I could focus on what I needed to for the business, this cost was well worth it.

2. Know What You Want – Because recruiting firms have so many candidates to send your way, knowing exactly what you are looking for in an employee is a must before working with a firm. We created a job posting with required experience included so the recruiting firm knew what not to send our way, which is such a tremendous help when trying to hire, I can’t even explain how much that fact helps. We also had internally discussed the role and how this new person was going to integrate with our team. This allowed us to quickly work through the interview to narrow our focus.

Within the tree care industry there will be some roles that you need to hire for that will work well with a recruiting firm and others that may be difficult. Discuss that with the recruiter so they understand your entire business and staffing needs. You may have heard people talk about only using recruiters for management positions and that is because those positions can be more difficult to hire for and have a larger risk (both positive and negative) to your business due to their responsibilities.

3. Have Hiring Process Ready – Over the years of working with tree care companies on our Thrive’s Hiring & Recruiting Package as well as hiring employees myself, I’ve learned that having success in hiring starts with having a well defined hiring process. One that is repeatable and consistent from interview to interview, position to position. The consistency is the only way to adequately compare candidates to each other and give everyone a fair shake. Before engaging a recruiting firm, make sure you know how you want your hiring process to go. Will there be multiple interviews with multiple people on your team? Will you have any background check (driving record) or skills test needed? Think about all of the steps that you will want to have the candidates go through so you can tell the recruiter from the start.

4. Give it a Try – My last tip is to actually just give it a try. Don’t stay closed off to this potential avenue of new employees for your team. There are many different recruiting firms that specialize in the green industry that will have some common experience to help in the tree care space. I also have heard of tree care companies looking at recruiting firms that specialize in trucking, because we all know that an arborist is actually a trucker first, then an arborist.

If you are struggling with finding new employees for your company, reach out to an ArboRisk team member today to discuss our Hiring & Recruiting Thrive Package.

Properly Insuring Rented Equipment

by Katie Petersen | Dec 12, 2022 | Business Strategy | 0 comments

Properly Insuring Rented Equipment

Written by Tom Dunn

Just as employees are the valuable life blood of a successful tree care company, the equipment that is used to complete the production work is also a critical piece of the puzzle and insuring it properly is of utmost importance. Your equipment is typically covered under an Inland Marine/Contractor’s Equipment insurance policy, which is a pretty straight forward insurance policy until you start renting or borrowing equipment to or from others. We’re going to go over some of the coverage concerns that you need to be aware of when you rent or borrow to or from others.

Renting/Borrowing Equipment From Others

There will certainly come a time due to unforeseen events like equipment breakdown or theft or just not owning the right piece of equipment to complete a specific job requires that you lease, rent or borrow a piece of equipment to meet your tree care business needs. Your Commercial General Liability will pay for injuries or damage you cause while using a rented piece of equipment, however, the actual rented equipment itself likely will not be covered. Most insurance policies exclude property that is temporarily in your possession.

So how do you insure the physical damage to the piece of rented equipment? If you are renting from an established equipment rental business, they may offer equipment rental insurance. We often recommend tree care companies to take the rental insurance if it is available depending on the cost and terms of the coverage.

If you do not choose to purchase the rental agency’s coverage, or they don’t offer it, then you need to look to your current Inland Marine/Contractor’s Equipment policy for coverage. There may be a small amount of coverage (usually only $25,000) for this automatically built into the policy. Check with your insurance agent to learn what your policy covers automatically for rented equipment. If the piece of equipment is under that automatic coverage limit, then you should be just fine.

When the value of the rented equipment is more than the automatic coverage limit, then you will need to add coverage for the rented equipment directly on the policy. For a short term rental, this is done with selecting a limit of coverage that is equal to the value of the piece of equipment. For a long term rental, you may be able to add the exact details of the machine onto your policy. Depending on how your insurance coverage is set up, there may be a reporting condition that requires you to report the total amount of expenditures for contractor’s equipment that is leased or borrowed from others within 30 days from the end of your policy. This could create an adjustment to the overall premium.

Another word of caution. If you are renting a piece of equipment and are required to sign a rental agreement make sure you read and understand your obligations. The contract may say that you are responsible to replace the piece of equipment with a brand new, similar make and model. The majority of rented equipment insurance policies only provide coverage on an Actual Cash Value (ACV) basis, which means they don’t pay for the replacement cost, but rather the value of the machine in today’s world. There can be a significant difference in these two amounts and therefore could create a number of associated out of pocket costs.

Equipment Rental contracts also usually have some form of indemnification/hold harmless language that has someone agreeing to hold another harmless for certain claims, losses and damages. While these are commonly used, there is no standard language used and some indemnification clauses will be more one sided than others.

Renting/Borrowing To Others

On the flip side, what if one of your valued employees asks if they can “borrow” a piece of equipment to do work at their own property? As soon as your equipment leaves your care, custody and control, your Inland Marine/Contractor’s Equipment policy will stop and there will be no coverage for the physical damage to that piece of equipment. Because there likely is not going to be a contract in place for this equipment with whoever you borrow to, you will not be reimbursed if the equipment is damaged or stolen.

Your liability exposure from the borrowed piece of equipment would likely be covered under your General Liability policy, however as a business owner, you are increasing the exposure unnecessarily not to mention also increasing the wear and tear on the equipment. Unless you are going to have the employee sign a contract and provide rented equipment coverage for the damage to the equipment, our recommendation is to avoid this situation and don’t rent/borrow your equipment to anyone.

To conclude, here are three takeaways for insurance concerns and rented equipment:

Before you need to rent equipment, make sure you understand obligations of any rental contract.
Talk to your agent to see if you are adequately covered under your contractor’s equipment policy.
Avoid the practice of letting employees borrow company equipment for their personal use.

If you have any other insurance related questions, please connect with an ArboRisk team member today. We have many resources that can help you with this, in addition to our Thrive Risk Management Program, which can provide one-on-one help to take your business to new heights.

Pollution Liability

by Katie Petersen | Dec 9, 2022 | Business Strategy | 0 comments

Pollution Liability

Written by Mick Kelly

No matter your exact operations, every tree care company has an exposure to pollution liability. From transporting PHC chemicals to running chainsaws and equipment at the jobsite to performing maintenance on their vehicles in their shop, tree care companies need to understand what the potential for a pollution event happening to them is and how to properly protect themselves from a costly remediation. Fortunately, there are insurance policies that you can purchase to transfer the risk of the remediation cost to, however, the world of pollution insurance can be a bit confusing.

In this article we’ll talk about the most common liability exposures that tree care companies face and which insurance coverage/policy you can buy for it.

What is Pollution Liability Insurance?

Pollution Liability Insurance is coverage that protects a business against liability (or alleged liability) from damages or injury caused by pollutants they work with or produce. The coverage protects against claims for contamination of soil, water or property along with bodily injury, illness or death. Gas and airborne pollutants are also covered. Pollution liability insurance is also known as environmental liability insurance or contractors’ pollution liability.

Pollution liability used to be included in general liability policies but started to be excluded in the 1980’s due to the size of the claims being made in regard to asbestos. Nowadays, Pollution Liability Insurance policies are standalone policies and are usually set up on a claims made basis.

What is a pollutant?

A pollutant can be any substance that is discharged or ends up somewhere it shouldn’t be. While toxic substances or poisonous liquids are the first thing that come to mind, everything from water, cheese, milk, lead or carbon monoxide can be considered a pollutant if introduced to the wrong environment.

I have herbicide/pesticide applicator coverage. Why do I need a separate policy?

Many tree care companies are growing their Plant Health Care side of their businesses and will often have Herbicide/Pesticide applicator coverage. While some companies will include limited pollution coverage in with their herbicide/pesticide applicator coverage, most policies will not react to a pollution event.

The herbicide/pesticide applicator will cover instances where there was a mistake in the application such as a lawn being burnt due to a bad mix or overspray killing some trees or shrubs that weren’t supposed to be sprayed.

In the event that the tank carrying the herbicide leaked onto soil or into a water source, a pollution policy is what is needed to cover remediation of the soil/water and to pay for any loss of income your client may suffer due to not being able to use their land. If the pollutant was deemed to have caused bodily injury, the pollution policy will also cover the damages and any judgment handed down.

What does a pollution liability policy cover?

Legal defenses – The policy will provide a specialized lawyer who can help determine if there is a case against you. If there is a case, legal costs, fees, defense costs and settlements/judgements are covered.

Remediation – Clean up and contamination of hazardous waste are covered and tend to be the bulk of claims. For this reason, there are usually high deductibles on pollution liability policies that can be adjusted if desired.

What isn’t covered?

Asbestos – typically this is excluded from all pollution policies.

Intentional Acts – if it is found that a pollution was carried out knowingly, the policy will not cover any of the above remedies.

Fuel Tank coverage

Many tree care companies now have their own fuel tanks on site. A benefit to this is that employees can go straight to jobs from the main workshop without having to make any detours or stops, which often lead to accidents or claims and certainly lost time scanning the aisles of the convenience store.

However, if there is an issue with the fuel tank, most General Liability and even most stand alone Pollution Liability policies won’t cover it.

A stand alone tank pollution insurance policy will be required to cover Third Party Liability, Loading and Unloading, Site Pollution Liability, Spill and Overfill coverage and Business Interruption.

Detailed descriptions of tanks along with photos and operating procedures are required for quoting and issuing coverage.

What if my truck gets in an accident carrying my herbicide/pesticide?

In the event that your truck gets in an accident, spills the contents of its tank and pollutes an area, herbicide/pesticide applicator coverage will not respond. While a stand alone pollution policy may respond, usually a Broadened Auto Pollution endorsement or Broadened Transportation Liability Endorsement are needed on the auto policy to cover the loss.

Varying from carrier to carrier, the coverage may be added to the policy to cover all vehicles or may be added to an individual vehicle.

As you can see there are a lot of pollution liability concerns for tree care companies and a variety of nuances to the coverages/policies that you can purchase. If you want to find out more about Pollution Liability policies or find out if one is a good fit for your company, please contact an ArboRisk team member today.

The Hard Market Is Here

by Katie Petersen | Dec 6, 2022 | Risk Management | 0 comments

The Hard Market is Here

Written by Eric Petersen, CIC

Like most industries, the insurance industry has market cycles. The insurance industry uses the terms “soft” and “hard” to describe the particular economic conditions the industry at large is enduring. As a whole, the insurance industry has been operating within a soft market for most of the past decade. In a soft market, insurance companies are more willing to take risks by insuring businesses and individuals who may not meet an exacting underwriting criteria. They also typically do this for a cheaper cost than during a hard market. The soft market creates a greater competitive situation for insurance companies and therefore the insurance customer will get better coverage for less money.

The flip side is a hard market, where insurance companies become more strict and rigid with their underwriting requirements and prices go up to reflect their discomfort with the risks that they are insuring.

Now while some may argue that insurance for tree care companies (especially General Liability and Workers’ Compensation) seems locked in a perpetual hard market, all indications point to a hardening market for all tree care insurance coverage lines coming in 2023.

There are many factors that contribute to why the insurance market hardens, but here are the most common factors:

Insurance Company Investment Income – In a perfect world, insurance companies will make their income from their investment portfolio, versus from their underwriting revenue. When investments are not growing at an acceptable rate, insurance companies need to make up the lost income by raising their rates for coverage.
Economic Uncertainty – Like most other industries, the insurance industry does not do well with economic uncertainty. The unknown of what is coming typically makes insurance companies protect their financial strength by increasing their rates to balance out losses to their company, whether that be from future claims, inflation costs to existing claims or from past claims being reopened.
“Social Inflation” – Today’s legal climate is unpredictable in many ways and leads to what insurance experts call social inflation. Large jury awards (otherwise known as “nuclear verdicts”) raise the potential for a minor accident to turn into a multi-million dollar case. Insurance companies have been on the front end of these social inflation claims for many years now.
Loss Ratios – When an insurance company is paying more dollars in claims than they take in from premium, their loss ratio begins to swell and the company loses money. Large weather events that produce widespread damage are a major contributor to loss ratio problems across the country.

So what can you do about the upcoming hard market to minimize the impact to your company?

Up your Risk Management Game – You’ve heard us talk about how purchasing insurance is only part of risk management before, but it becomes even more important when the insurance industry is in a hard market. Identify what areas of your business could be improved to reduce the likelihood of an injury or accident happening and then implement a plan to take action upon that risk. Seek help from your insurance agent and insurance company on what proactive risk management activities will have the most impact upon your insurance rates.

Explore Self Insurance with Intent – Every insurance claim that you file has an adverse impact to your insurance cost. Look at increasing your deductibles so you aren’t as willing to file a small claim as well as find areas within your insurance coverage that you can self insure, think small tools/equipment or the physical damage on older vehicles. A lot of little insurance claims will have a much greater impact on your insurance cost than one large one.

Explore Non-Traditional Risk Transfer Options – Captives or self-insured funds become more attractive to larger tree care companies when the insurance market hardens and traditional insurance programs cannot offer stable rates and terms. There are many different options to explore so work with someone who understands each of the options available to help you select the appropriate one for your business.

Choose the Right Agent – Ensure you are working with an agent who actually understands your business. Your agent is the first line of defense versus large premium increases and insurance market instability. They will know when an insurance rate increase is fair and justified and when it is out of line. They also will know how to position your business to the insurance company to receive the lowest possible rate.

Understanding what a hard market is and how to minimize the impact to your company can be a huge difference maker in your profit margin. Make sure to ask plenty of questions when reviewing your insurance policies with your agent at renewal time. And while no one knows for sure how long or severe a hard insurance market will last, they typically are shorter in length than a soft market. If you have any other questions on what the changing insurance market means for your business, please contact an ArboRisk team member today.