Coronavirus and Insurance Claims

Coronavirus And Insurance Claims

With all of the attention that the coronavirus (COVID-19) is getting, many tree service owners have asked us if they could be held responsible in any way if their employees or customers were to become infected. The answer really depends upon the specific circumstances of the infected person, but let’s take a deeper look at insurance coverage and illnesses.

To start, let’s discuss how flu epidemics are treated in contrast to location-specific illnesses like E. Coli or Salmonella. An outbreak of Salmonella can often be traced back to an exact source of contamination. This allows the local health department to take action against the company who harbored the bacteria. Depending on the facts surrounding the outbreak, the business could be liable for any illnesses or deaths associated with the outbreak. There are custom insurance coverages available to protect businesses that can be purchased, however, this is much more common in the food service and hospitality industries than the tree care industry.

Now during a flu epidemic, where someone could pick up the virus almost anywhere, it is near impossible to connect the contraction of the illness to a particular business or location. Therefore these events are unlikely to trigger a liability to your tree care company.

What we know about the coronavirus is that it is spread from person to person like the flu. The new known cases rarely have any connection to a specific location or source of infection, consequently the claims analysis for an infected coronavirus person would be handled similar to that of the flu.

In regards to Workers’ Compensation, a coronavirus infected employee could make a successful claim, however, there needs to be a very specific set of circumstances. In most states for a workplace illness to qualify as a Work Comp claim, it must be proven that the employee was subjected to a unique environment that is not common to the general public. If that unique environment was a known location to have a coronavirus outbreak and the employee was sent there to perform their work duties and they contract the virus, they could claim the illness on Work Comp.

In summary, despite the real fear of a widespread coronavirus pandemic, there will most likely not be business insurance coverage available to infected persons. Take all precautions to limit exposure to the virus, just like you would the flu and make contingencies for your office team to work remotely if possible to limit the spread throughout your organization. If you have a specific employee contract the virus and are concerned it may qualify for Work Comp, turn it into your insurance company right away and let them investigate it.

According to the Centers for Disease Control (CDC), here are some tips to minimize the impact of the coronavirus.

Ensure sick employees stay home and are symptom free for at least 24 hours before returning to work.

1. Be flexible with your sick leave policy and make sure employees know what they are expected to do when sick.
2. Educate employees on proper self-hygiene, like washing hands and covering your mouth during a cough or sneeze.
3. Keep cleaning supplies, tissues and hand sanitizer stocked and readily accessible.
4. Perform routine cleaning in your shop and office as well as providing disposable wipes to employees to keep their individual workstations clean.
5. Check the CDC’s Traveler’s Health Notices for travel guidance before sending an employee on business.

Written by: Eric Petersen

7 Deadly Sins of Workers Comp

7 Deadly Sins of Workers Comp

If there is ever a place where the phrase ‘attitude is everything’ holds true, it is certainly in the Work Comp world. After partnering with tree care companies over the past fifteen years, I’ve noticed distinct patterns in the attitudes of business owners on how they view Workers’ Compensation and their individual company’s financial strength. These observations led to the creation of the 7 Deadly Sins of Work Comp analogy to help tree care owners and managers avoid destructive behavior.

When a tree care company exhibits any of the characteristics listed below there are grave consequences to both the business’ fiscal health and overall culture. The 7 Deadly Sins of Work Comp are listed starting from the most to least dangerous for a tree service.

Pride – dangerously corrupt selfishness – The deadliest Work Comp sin is Pride. Pride results when tree service owners believe they are already doing the best they can to prevent injuries from happening and they think they know everything about how to handle them. This prideful mindset blocks their ability to learn and grow as a leader for their company, putting their organization and everyone involved in a very precarious situation. Being open minded to suggestions and improvements on safety and injury handling practices can combat Pride. A tree care company owner can never learn too much about how to keep their employees safe and how to lessen the impact of injuries.

Wrath – uncontrolled anger or vengeance – Far too often, a tree care owner or leader gets so fed up with Work Comp that they assign the responsibility to someone else in their company. Their frustration, anger and negative attitude about the system demolishes any positive aspects of Work Comp and sets the company up for failure. A commitment to building a strong safety culture and implementing proper documentation and best practices for Work Comp, must start at the top of the company. The leaders should employ others on the team to help achieve success, however, the responsibility should never be assigned to someone else out of frustration or anger at the system.

Lust – intense longing – Every tree care company wants the lowest possible cost to their Work Comp. However, the intense desire for the lowest cost often blinds the business from how to properly achieve it. The insurance industry, unfortunately, has played a large part in creating this longing. Rather than helping to educate their clients and prospects on how to reduce their long-term Work Comp cost, most insurance agents simply focus only on beating the price of the current insurance company. This is exactly what happens to your customers when your competitors are focused solely on providing cheap tree care services and do not take the time to work with the customer on proper tree care. It is perfectly normal to want to get the lowest cost for your Work Comp policy, however the owner needs to make sure they understand how the system works so they can continue to keep their cost as low as possible into the future and not be blinded by a one-time low quote.

Sloth – lack of interest – The Work Comp sin of Sloth is similar to Pride, but instead of the tree care owner believing they are doing everything they can do; they have a disinterest in proactively preventing and managing injuries. Accepting that injuries are “just a part of tree work” is the surest way to have your company suffer because of them. The impact of the injury multiplies significantly when the tree care owner intentionally does not do anything to manage the injuries when they do happen. To avoid this, the owner must commit to preventing injuries from occurring and create a process to consciously manage them. Written policies and procedures, like safety and return to work programs, as well as injury reporting guidelines are part of the preparation a tree care company should go through to minimize both the financial and emotional pain of an injury.

Envy – insatiable desire – It doesn’t happen often in the tree care world, however, some employees will view Work Comp as an easy paycheck and grow envious of those that get a “free-ride” from the Work Comp company after an injury. If an employee is injured and cannot perform their assigned work duties, they will receive a paycheck from the company’s Work Comp policy. To dodge this sin, institute a formal return to work program outlining what tasks an injured worker can perform for your company. Make this a part of your employee handbook and have all employees sign the handbook, stating they understand that if they’re injured the company will provide work for them to perform within their medical restrictions. Communication between the tree care company, the injured employee, and the treating physician is critical for an effective return to work program.

Gluttony – overindulgence – Not only can an injured employee abuse the Work Comp system, but tree services may also be gluttonized by the medical community. Now, the overwhelming majority of doctors will do their best to return the injured employee to work as quickly as possible. However, a tree service must make sure the treating physician doesn’t see a Work Comp claim as a blank check. Treating physicians have the authority to assign the injured employee off of work to help the injury heal. Thus, just like with Envy, having a solid written return to work program in place protects a tree service from being taken advantage of. Ensure that the doctor knows immediately of any light duty work that is available so they can write any physical restrictions to accompany the light duty. Top performing tree care companies have established relationships with medical clinics before any injuries occur, thereby eliminating most of the potential for errors in communication and gluttony by the doctor.

Greed – desire by trickery – The final Work Comp sin happens when tree care owners intentionally misclassify their employees on their Work Comp policy to get a lower rate. Like other forms of deception, intentionally misclassifying employees sets up the tree service for audit penalties and disciplinary action from the Work Comp insurance company. Not only will the tree service receive an increase in premium from the audit, many insurance companies will non-renew policies if different classifications should have been used at the start the policy. The acceptance of different class codes is something that needs to be agreed upon with the insurance company prior to the policy start date. Owners must work with their insurance agent to understand how to track and report payroll if they can use multiple codes for an employee.

Don’t go to Work Comp hell! Avoid the 7 Deadly Sins of Work Comp to keep your business as strong as possible.

Eric Petersen of ArboRisk Insurance presented this topic at the 2019 TCIExpo in Pittsburgh, PA.

Written by: Eric Petersen

Do you Have the Right Work Comp Policy?

Do You Have The Right Work Comp Policy?

Written by Eric Petersen, CIC

Almost every day we are asked, “How can I lower my Work Comp cost?” While the answer for each tree care company is specific to their situation, examining the type of the Work Comp policy is one way to lower the cost. Below are the most common types of policies that are available for tree services.

Now because Work Comp is regulated at the state level, each state operates a little differently, so unfortunately, some of these policy types may not be available in your state.

Guaranteed Cost – The vast majority of tree services have this type of WC policy. A Guaranteed Cost policy gives the insured company confidence in the total cost of the policy. The rate is set at the beginning of the policy period, payments are made, then the premium is adjusted at the end of the policy term according to the actual payroll the tree service incurred during the policy. Injuries only affect future policy premiums, not the current policy year.

Dividend – A Dividend policy acts exactly like a Guaranteed Cost policy throughout the year except the policy holder has a chance to earn some of the premium back after the policy year is over. This premium that is given back to the policyholder is called a dividend. Dividends can be either a set percentage of the final premium (called a Flat Dividend) or a sliding scale percentage based on the claims that happened throughout the year (called a Variable Dividend). The dividend amount is negotiated with the insurance company before the start of the policy.


Depending on the size of your company and the strength of your safety program and financials, you may want to consider the following Work Comp options. These plans are much more sophisticated and require a strong understanding of the risk/reward involved with them.

Deductible – Deductible Work Comp policies also utilize the Guaranteed Cost policy format except they contain a provision for a deductible. The Work Comp deductible works just like any other insurance deductible, where the insured tree service pays the first amount of a claim and the insurance company pays the rest. This can be a small dollar figure like $1,000 or a large amount like $100,000. An aggregate (per year) deductible can be negotiated at the beginning of the policy to cap the out of pocket expenses.

Retrospectively Rated – With a Retrospectively Rated Work Comp policy, the insured tree service pays a fixed cost throughout the policy period and then the premium is adjusted at the end based on the claims that occurred. This plan setup offers the greatest potential savings but also could be the most expensive depending on how the injuries unfold for the year. There is a minimum and maximum premium assigned at the start. A common minimum premium would be 50% of the Guaranteed Cost while the maximum could be 150%.


All types of Work Comp policies are designed to finance the injuries that occur within your organization. Selecting the type that fits your company best can be complex, however, the rewards of better cash flow and lower cost can be well worth it. For more assistance with your Work Comp policy, please contact an ArboRisk team member today!