Positive Risks

Written by Eric Petersen, CIC

I felt inspired to write this article on the plane ride home from a recent trip to Egypt that my wife and I took for our anniversary. It was an unforgettable adventure where we crawled into pyramids and ancient tombs, slept under the stars on the Nile in a felucca as well as overnighted on a sleeper train, not to mention enjoyed the traditional cuisine of the country. It really was a trip that had it all and not one that we normally would take. Sure we like to travel to see new places, try new foods and such, but there was so much more unknown about this trip than any we had taken before.

In every sense of the phrase, we “took a risk” on this vacation of unknowns to experience something we hadn’t before and I’m so glad we did. Not only were the physical experiences so memorable, the conversations we had with our new friends reinvigorated us to continue to take risks and grow as individuals and share new ideas and energy with others.

Could it have been the worst trip we took? With everything that we didn’t know about the country, culture, the food, the people we were traveling with, absolutely, but it wasn’t and we obviously wouldn’t have had the time we did if we didn’t take the risk. It’s easy to confidently say that our risk paid off with this vacation.

It’s this spirit of positive risk taking that I want to bring back to your business now. I’m sure every tree care company owner knows the moment he or she wanted to start their own company. So, think about that moment for a second. The moment you knew you had to do this for yourself, your family or future family. You were staring risk directly in the face, with the potential of that risk slapping you back in the face at every turn. And while it maybe took a bit to build up the courage to take the leap, you did it anyway and you made it.

There would be no one to write this article to if no one took that risk to start their own business. And so I want to encourage each one of you to remember that we need to continue to take risks for our businesses and more importantly for the people our business depends on to thrive, our family, our employees and their families, our customers and their businesses/families.

So I challenge each of you to take a risk this year within your business. Go reach for that one thing you’ve been holding back on, starting a PHC department, opening an additional location, spending the money on marketing, investing in a customer relation management system? Whatever it is, work with your leadership team to build a plan first, and then take action.

Once you start, tell someone outside of your organization about it to hold you accountable. The accountability part is where we often fail as business owners as there is always something else that occupies our time and distracts us from taking risks that can transform our businesses. Remember, we used to do this when we were new in business.

And in that vein, I want to make a public commitment to you, so you can hold me accountable to my next risk, of writing a business building book for the tree care industry within the next year. I’ve had the outline set for a couple of years now, but haven’t taken the risk to truly begin working on it yet. But now it’s go time.

Join me in tackling something new for your business this year and please hold me accountable too. Together we can all improve so much faster than doing it alone.

Subcontractors and Work Comp

Written by Eric Petersen, CIC

Using subcontractors for some or all of your labor within your tree care company can be a smart strategic move for your business, however, it must be done correctly to avoid opening your company up to unnecessary exposures. While there are many exposures that tree care companies face with subcontractors, I want to focus this article only on the exposure that comes from an on-the-job injury to the subcontractor as it seems to be a misunderstood exposure that we often need to educate tree care company owners on.

You got it, this means we’re gonna talk about Workers’ Compensation and how it relates to subcontractors.

First thing first, everything that happens on a jobsite will flow upwards to the company that has the contract with the customer. On a typical tree care job that means the tree care company who is hired by the customer has the ultimate liability for what happens on that job including being responsible for any on-the-job injures.

While many tree care companies mishandle on-the-job injuries for their employees, it is often even worse when a subcontractor gets injured. Fortunately there is a pretty easy solution. I suggest doing all four of the items below, however, if you want to shortcut to #4, that is ultimately the one that matters the most.

1. State Law – Understand your state’s law on who qualifies as an independent contractor (subcontractor) and who will be viewed as an employee for an on-the-job injury. Most states have very similar rules on this and to oversimplify them (please, please, please check with your individual state directly to confirm this generalization), the question comes down to the amount of control the tree service has over the subcontractor. The more control the tree service has over the subcontractor, the less likely they will be viewed as a subcontractor. If they are injured and subsequently determined to not have met the criteria to qualify as a subcontractor, then the tree service will be responsible financially for the injury.
2. Workers’ Compensation – Make sure you have a work comp policy in force. If for some reason you or the subcontractor failed to ensure that the subcontractor met all of the requirements of your state to be viewed as a subcontractor then by having a policy in force, your Work Comp policy will pay for their on-the-job injury instead of you paying for it out of pocket.
3. Contract – Use a written contract with each subcontractor to outline the term of the business relationship and the required insurance policies that you want the subcontractor to possess. Unfortunately, this is a step that many tree services miss and therefore expose their business to paying for an on-the-job injury to a subcontractor.
4. Subcontractor’s Workers’ Compensation Policy – Get a copy of the subcontractor’s work comp policy (or Certificate of Insurance) before they step onto a jobsite for you. The key here is to get confirmation of their coverage BEFORE they start working with your team.

The last thing that I want to mention has to do with minimizing the issue with your Work Comp Audit if/when your subcontractors show up on the audit.

Remember, the ultimate cost of your Work Comp policy for the year is determined after the end of the policy reflecting the amount of payroll you had during the policy period. To determine the ultimate cost, the insurance company performs an audit and asks you to reconcile the premium that you’ve paid versus what is owed. If you had more payroll than estimated, you will owe more premium to the insurance company after the audit is completed. This becomes an issue when subcontractors are included in the payroll figure when they shouldn’t be.

Understanding and adhering to the four points above will remove the financial exposure created from on-the-job injury to a subcontractor.

If you would like more guidance on this topic or what the other exposures of subcontractors are to your business, reach out to an ArboRisk team member today.

How to Maximize A Loss Control Visit

Written by Eric Petersen, CIC

What feeling do you get when you learn that your insurance company wants to do a loss control visit with your tree care company? Hopefully a loss control visit would be met with high expectations of a collaborative relationship between your organization and the insurance company, however, we’ve found that most tree care owners are skeptical and even worried about what will happen during the visit. These feelings of skepticism and worry are completely normal and why I wanted to write this article.  

First, let’s talk about what a loss control visit  really is and why the insurance company would want to perform one. Simply put, a loss control visit is a meeting between a tree care company and the insurance company to learn more about the tree care company. The majority of the time this is an in-person meeting that happens at the office or shop of the tree care company and might continue in the field at one or two job sites. Loss control visits could also be done over the phone in certain circumstances. 

There are a few different reasons for the visit, but the underlying theme is to help the tree care company reduce the risk of injuries and accidents within their company. They also can be utilized by the insurance company to help in pricing of the insurance policy and where to guide the tree service for improvement. Sometimes the visit is set up before the insurance company even issues a quote for coverage or after you’ve had a large accident or claim. 

Unfortunately, most people have heard a  story or experienced a loss control visit that wasn’t productive or collaborative which has lead to the common skepticism and worry about these visits. Too often, these visits can be pencil whipping check box visits where the loss control rep is just checking items off a list without offering much help or guidance. 

One key to remember is you are already paying for loss control services with the premium that you pay for the insurance coverage. Whether it is your General Liability, Property, Auto or Work Compensation company that is doing the visit with you, their loss control services are already built into the price that you’re paying. 

So to help you get the most out of your next loss control visit, I’ve come up with these 6 tips. 

1. Understand the Purpose of Visit – When asked by the insurance company to set up the visit, ask for clarification on what the insurance company wants from visit. If they are looking to learn about a specific part of your operation or the equipment you use? Perhaps they want to help mitigate any fire hazards in your shop? Whatever it is, understanding the insurance company’s purpose will set the meeting up for success and allow you to engage them in helpful conversations around those topics. 
2. Who, How Long and Where – Along with understanding the purpose of the visit make sure to ask who will be performing the visit, how long they expect the meeting to take and where they would like to go.
3. Make it Your Priority – Sometimes schedules don’t align perfectly, but as the leader of your organization, making the loss control visit your priority is vital. If your insurance company is coming to help your company out don’t you want to be the one to hear what they have to say and offer the appropriate information to them? 
4. Engage your Agent – Some insurance companies are better at informing or involving their agents in the loss control process. That said, many times your agent won’t know that the visit has been scheduled, so whenever you get asked to have a visit done, contact your agent to discuss it with them. They may be able to join you for the visit or at the very least help you before or afterward the meeting. Remember they are your advocate to the insurance company and will be able to help during this process. 
5. Be Prepared – Before the representative comes to visit with you, inform your team and ask if they have any questions they’d like you to bring up during the visit. Chances are no one on your team will say anything, but by asking them, you are including them in the process and helping to foster the safety culture you desire to have. You also should think about the insurance company’s purpose for the visit and what information you can get from them to benefit you the most in that area. 
6. Keep an Open Mind – Lastly, please remember to keep an open mind with the objective of the meeting and with the loss control representatives themselves. I wish all representatives would “wow” their clients with their experience, knowledge and charm however, reality is they do not know the inner workings of your business as well as you do and while some representatives may get into preaching or even scolding mode, check your emotions to not take what they are saying personally or worse close off to them. Take the helpful nuggets from the representative that you can use and politely offer a different vantage point to them if needed and when appropriate. 

 Like most of the advice we give to tree care companies, the more prepared you are for a loss control visit the more successful the visit will be and the further ahead your company will be for it. With practice and attention to the bigger picture of loss prevention and risk reduction, loss control visits can become an integral part of your company’s success.