Adding Large Equipment to Your Insurance Policy

by Katie Petersen | Nov 30, 2023 | Safety | 0 comments

Adding Large Equipment to Your Insurance Policy

Written by Ryan Watry

Everything is getting more expensive these days. This is true not only at the grocery store and gas pump but as the cost of equipment is also on the rise. Due to the rise in cost in these pieces of equipment, insurance companies are starting to require more information when adding them to your policy. Here is a quick guide to make sure that new equipment is added to your insurance policy without a problem.

1. Give Lead Time

Just like when you are purchasing a home or new vehicle, odds are you’ve done research and shopped around before buying the new equipment. When you start looking for that new lift or chipper or whatever, it is a good idea to reach out to your insurance agent to let them know you are shopping around and that way if they need underwriting approval to add it your policy, they can start the conversation with the underwriter.

2. Information required.

Besides the standard information of year, make, model, serial number and value, the underwriter will potentially ask for more information. This may include information on the equipment itself or on the people operating the equipment. Sending over the spec sheets or pictures of the equipment gives the underwriter a better understanding of what that equipment is and what it does. The underwriter may also ask about who is operating the item. Typically, they want to know what experience that person has and what/if any training they’ve had. Finally describing what jobs this item will be used on gives the underwriter a better understanding of what the equipment is needed for and how it will be used.

3. Loan Information

Odds are when you are purchasing this equipment you are taking a loan on it. It is important to provide your agent with the name and address of the lending company so they can show proof of insurance to that lender. If the lending company does not get this information, they will apply their own insurance and charge you for that. Nobody wants to double on insurance so to avoid giving your agent the lending information is crucial.

Buying a new piece of equipment can be exciting and potentially stressful time. Hopefully the tips we just gave you can help take away some of the stress when buying and insuring your new large piece of equipment.

If you are interested in having a conversation, or learning more, about how the Arborisk Thrive program and Consultants can help you strategically review and advance your company, please check out our Thrive website at: https://arboriskinsurance.com/arborisks-thrive/

Employment Practices Liability Insurance

by Katie Petersen | May 23, 2022 | Risk Management | 0 comments

Employment Practices Liability Insurance

Written by Mick Kelly

One of the first concerns that a new business owner has is how to deal with the hiring, firing and discipline of employees as well as wondering what the consequences your employees’ actions may have for your business.

Not only is the risk of being sued by an employee very real and on the rise, the risk of being sued because of the actions of an employee, outside of the scope of their work, is also very real.

This is where Employee Practices Liability Insurance or EPLI comes in!

What is EPLI

EPLI helps protect businesses against claims and lawsuits arising from improper or unfair acts brought by employees. EPLI includes coverage for the cost of defending a case in court and the damages from a judgement or settlement that may arise from a lawsuit. Legal costs are typically covered in the event of a win or loss.

EPLI covers against claims from:

full-time and part-time employees
temporary and seasonal employees
applicants for employment
independent contractors

Examples of lawsuits that can be brought against an employer include:

Unfair discipline
Wrongful termination
Unfair demotion or negligent evaluation
Breach of employment contract
Failure to employ or promote
Sexual harassment
Discrimination – age, race, sex, religion, etc
Libel, slander, defamation of character
Invasion of privacy
And more

Most small business owners think such claims will never come against them since the have the best employees or their employees just “aren’t like that” – but the claim may come from the actions of someone else within your organization or from a mistake from the employer. Even a “heat of the moment” dismissal may result in an ex-employee seeking damages for wrongful termination.

EPLI is typically a claims made policy – meaning you must have it at the time of the incident in order to have coverage.

How much does EPLI cost?

A rough rule of thumb is EPLI costs between $25 – $40 per employee but pricing does vary per carrier

EPLI Premiums, are typically based on the these factors:

Type Of Business
Number of Employees
Coverage Limits
Deductible
Past EPLI claims history

Many carriers will offer EPLI as an add on to the business liability policy but in the incidences where they don’t, EPLI policies can be purchased as stand alone policies.

How much coverage should you carry?

This question varies from business to business. Most small business’s don’t have the thousands of dollars that it would cost to defend an EPLI case and a way to offset that is to pay a monthly premium for the EPLI coverage.

It should be noted that most EPLI policies have a deductible and that the cost of the monthly premium plus the deductible along with the likelihood of a claim should all be factored in before deciding to purchase the policy.

A company with a well run HR department may feel more comfortable forgoing the coverage in the knowledge that all the correct steps are being taken in regards to discipline, termination, hiring, etc. however, even a highly skilled HR department doesn’t mean you’re immune from lawsuits.

What EPLI doesn’t cover

EPLI exclusions include:

Criminality or violations of state/federal laws – EPLI will not cover you against a criminal act or if you are in violation of state or federal laws. It may cover you up until the point you proven guilty but not beyond that.
Punitive damages
Worker’s compensation claims
Contractual liability or breach of contract

EPLI with Third Party coverage

This is an add on to EPLI coverage. While EPLI covers you against employee lawsuits, Third Party coverage covers you against the actions of your employees towards others such as customers or clients. These lawsuits are typically discrimination or sexual harassment in nature.

In a labor market where it’s become very difficult to hire and a lot of business’s are hiring “a body” to get by, this coverage can be helpful. While all businesses want to vet their employees to the highest standard and only hire people of the highest moral quality, it’s not always possible to be certain of either and EPLI coverage with Third Party coverage can be a way of mitigating that risk.

That being said, Third Party EPLI claims for smaller businesses are far more common in the food and accommodation and retail services than they are in contractor fields. The additional 15 – 20% cost associated with it should be weighed up against the likelihood of employee interaction with clients and customers.

For more information on EPLI, contact a member of the ArboRisk Insurance team! ArboRisk also can work one-on-one with you to create an extraordinary business through our Thrive Risk Management New Heights package!

Working with Insurance Adjusters

by Katie Petersen | May 2, 2022 | Risk Management | 0 comments

Working with Insurance Adjusters

Written by Tom Dunn

You sustain a loss to your property, and report it to the insurance company. Shortly after, you are notified who the adjuster is that will be handling your claim. For most people, the fear of the unknown now sets in. What will it be like working with this person to resolve the claim and get your business back to normal? Will I be treated fairly and receive just compensation or will they find ways to deny coverage or try to pay as little as possible?

I know first-hand of this experience, having worked for a national TPA adjusting firm as well as as a staff adjuster for a self-insured risk pool that insured municipalities and school districts. From my perspective as an adjuster, I always tried to put the person who sustained the loss at ease during the first interaction and assure them they would be treated fairly.

It is probably a normal reaction to have some anxiety, but there is no reason for this relationship to turn out poorly. If you go into the relationship with the mindset that this person can be my advocate instead of adversary and follow some simple steps, you can walk away from the experience feeling like you have been made whole.

This article will focus on property losses, but there are many different types of claims that adjusters handle. The same basic principles for working with an adjuster apply for any type of claim. It probably helps to know what the role of the adjuster is to help know how the process will work. Here is a summary of the process an adjuster may take:

Determine the cause of loss
Determine if there is coverage available under the applicable policies
Determine the extent of property damage
Determine if the damage should be repaired, replaced and what to do with the damaged property
Determine the amount of payment

Seems straightforward, but here are some steps to make the process smoother:

Report the claim to the insurance company promptly. Your agent can help with reporting a claim.
Know your policy. You don’t have to be an expert or know all of the ins and outs of the policy, but you definitely should become familiar with what is generally covered and your obligations. Pay attention to the “Duties after a Loss and Proof of Loss Requirements”.
Ask questions of your adjuster. A good adjuster will explain your duties and obligations and bring up any coverage concerns, but don’t be afraid to ask for explanations if you have questions. As with all strong relationships, communication is the key. Be polite and responsive in all interactions, but it is ok to be firm.
Take steps to mitigate any further damage while the claim is being investigated. This is required in the policy language. See #2
Collect documentation of your damage. Take a complete inventory of damaged and undamaged property (pre-loss inventory is even better). Take photos and videos of everything that was damaged as soon as possible after the loss and identify what it is showing.
Insurance companies may recommend a contractor or you may be able to choose your own to complete repair work. Make sure they are present when the adjuster comes to inspect the damaged property and have experience working with insurance adjusters.
Keep a claims journal documenting your interactions with the insurance company adjuster (dates, times, subject matter). The adjuster is doing the same with you and this can help resolve any discrepancies.
Remember the appraisal clause in the policy language. Hopefully, if you have followed steps 1-7, this won’t be necessary, but if you don’t feel you are receiving just compensation for your loss, you have the right to invoke the appraisal clause and seek a non-biased opinion of a third party. See #2

Dealing with the aftermath of a claim can be a stressful situation. Being prepared, detailed, proactive and advocating for yourself goes a long way in obtaining a successful resolution. A good insurance agent knows when and how to become involved, without being a hindrance to the claims process. Utilize that relationship, when needed.

For additional help in working with insurance adjusters, contact a member of the ArboRisk Insurance team! ArboRisk also can work one-on-one with you to create an extraordinary business through our Thrive Risk Management New Heights package!

Lastly, check out this article on maximizing compensation from vehicle accidents in October 2021 TCI Magazine.

Why Auto Insurance Rates are Increasing

by Katie Petersen | May 2, 2022 | Risk Management | 0 comments

Why Auto Insurance Rates are Increasing

Written by Tom Dunn

Commercial auto rates have been increasing at an alarming rate across all industries and the tree care industry is no exception.

This article is meant to shed some light on the causes behind the rate spike and point you to a few resources to help you minimize your cost.

Distracted Driving and Accidents

As with any insurance coverage the rate that you pay is directly connected to the likelihood of a claim happening. Therefore, when there are more accidents, the cost of the insurance goes up.

For many tree care owners, their truck is also their mobile office and just like working in a traditional office, there are plenty of distractions that can take your focus away from what you should be doing. The only difference is in a vehicle, the consequences of lack of focus are always more severe, leading to property damage, injuries and even death.

Distracted driving is the largest cause of motor vehicle accidents and comes in many forms. Some of the most common are:

Cell phone use: Talking or texting. Even the hands free options can distract.
Multi-tasking like eating or drinking while driving
Adjusting controls in the vehicle
Checking GPS navigation system
Talking with another passenger
Looking at something outside car

Inflation

Technology has led to many advances in vehicles that are supposed to make them safer, however that technology comes at an increased cost for consumers when it comes time to repair a damaged vehicle, especially delicate electronics.

Same principle at work with individuals who are injured in a motor vehicle accident. Hospital services have gone up dramatically in cost.

More Drivers

Yes, there were less drivers on the road during the peak of Covid, however, the number of licensed drivers has grown overall to over 230 million across the country.

Inexperienced Drivers

Unfortunately, there are enough experienced drivers with the skills and expertise to drive commercial vehicles to replace the drivers who are retiring. In general, inexperienced drivers have more accidents.

Infrastructure

Old, crumbling roads and bridges increase the wear and tear on vehicles, making accidents more likely. Roads not designed to handle the volume of traffic we see today which leads to more congestion and accidents.

Supply Chain Disruptions

Covid did lead to a decrease in the need for vehicle parts for a short period, however as driving has returned to more normal levels, there has been an increased demand. Sadly, the supply of available parts has not caught up.

Extreme Weather

It doesn’t have to be considered an extreme weather event to lead to an accident, and you don’t have to be a meteorologist to see the increase in extreme weather events. Company vehicles can be damaged just sitting in a parking lot, however, Tree Care companies are often on the road as first responders in extreme weather events thereby increasing their chance of being involved in an accident during a storm.

Huge court verdicts

Also known as “Nuclear Judgements,” these are defined as a verdict in favor of a plaintiff with a damage award over $10M, but can be used for any verdict larger than anyone expected.

One of the insurers that ArboRisk works with recently had a $6M verdict handed down for a motor vehicle accident involving a tree care company. An interesting look behind the reasons for nuclear verdicts shows that how a company addresses safety definitely matters:

Juries have shown that if a company overlooks workplace safety, doesn’t provide adequate safety training for employees and has a history of repeat violations, they will be punished for their lack of training oversight.
Failure to utilize available technology (driver monitoring systems, forward collision systems, back-up cameras, voice control-Bluetooth) can also lead to punishment from a jury.

While it may seem like there is no hope for your business auto rates, know that you are not helpless in controlling your own rates. Companies that take driver and fleet safety seriously position themselves to receive the lowest rates possible. We actually recently wrote an article to give you four ways you can lower your rates.

Additionally, every ArboRisk client has access to our extensive driver and fleet management resources on our Thrive website. Not an ArboRisk client? No problem! Enroll in our Thrive Safety Package to get one-on-one help lowering your risk of an auto accident within your company.

Key Person Insurance as Part of a Risk Management Plan

by Katie Petersen | Apr 25, 2022 | Risk Management | 0 comments

Key Person Insurance as Part of a Risk Management Plan

Written by Mick Kelly

Within the tree care industry, every business has a few key players on their team that help the business succeed. What happens when one of those key team members moves onto another company or much, much worse, suffers a tragic accident and is no longer around? Protecting the business from losing a key person is a risk management must.

What is a key person?
A key person is an individual within an organization, whether an owner, partner or employee, who makes an essential contribution to a business.

What is a key person policy?
A key person policy is a life insurance policy paid for and owned by the business. The business is the beneficiary of the policy in the event of the death of the key person.

Who can be determined to be a key person?
Any employee can have a key person policy taken out on them so long as they are vital to your business operations and able to produce profits. Typically, the policies are taken out on owners and employees that the company would find difficult to operate without. In the tree care world, this may be the best climber in your company or your crane operator. It could also be your ISA certified arborist, your office manager, or the head of a division such as PHC or HR.

How much insurance coverage is needed?
The amount of coverage will vary from person to person and is dependent on their role within your company. You can figure out the exact amount of profit the company would lose without that person and multiply it by the time it could take to replace them. The cost of recruiting and training should also be taken into account. Keep in mind that the size of the policy will be restricted by the key person’s contribution to the company.

Can I only use it to replace a key person?
The money can be used to offset short term loss of revenue while a replacement is found. It can also be used to fund recruitment. In the current employment market, it may take months to replace a skilled climber or crane driver and it may take even longer to replace the skills of a company owner/founder or office manager.

The benefit may also be used to pay out the family of a partner in the business if there are multiple partners.

Types of key person policies
Like life insurance, key person policies can be term policies or whole life policies. Term policies run from 10 – 30 years and are the most cost-effective way to purchase key person insurance.

Whole life policies cover for the life of the insured. Whole life policies also have a Cash Value account associated with them and a portion of each payment is deposited there. The Cash Value can be counted as an asset of the company and can be used to secure loans or paid out if the policy is terminated.

Are there any tax implications?
Key person policies are paid using after tax dollars in most cases and the benefit is typically paid without income tax liability for the company. The exception to this is with C – corporations where the benefit will be included in your AMT calculation.

There are no tax implications for employees so long as the business owns the policy. If the policy is sold from the business to the employee, it may need to be declared as compensation and discussed with an accountant.

If you have an employee your business will struggle without or if your business will struggle without you – considering a key person policy is essential to the survival of your business.

For more information on key person policies, contact a member of the ArboRisk Insurance team! Eric, Tom or myself are happy to discuss these policies with you and answer any questions you may have. If you need additional help with any risk management concerns, check out our Thrive Risk Management Packages! These packages are available for purchase and can help take your business to new heights!