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INSURANCE
&WHAT YOU SHOULD KNOW TO PROTECT YOURSELF,
YOUR PROPERTY, YOUR FINANCIAL FUTURE!

The following information applies to insurance. This can be applied to anyone of whom
you require any of the 3 following types of insurance, whether it be a tree service, plumber, mechanic, electrician, general contractor, etc. This is designed to help you to protect yourself,
your property and even your financial future.

THERE ARE 3 FORMS OF INSURANCE YOUR CONTRACTOR SHOULD HAVE:

  1. Liability insurance- This insurance covers property and people not belonging to or working for the contractor or company. These policies have a deductible as well as limits. In the case of a big accident, this not only covers damage to your property but also that of your neighbor as well as injury to a bystander. This insurance is not mandatory under state law.
  2. Worker's Compensation Insurance-This type of insurance covers the injury of an employee (medical costs, injury income, rehabilitation, legal, retraining in the event of permanent disability, and a life insurance benefit) on the job (your job). This insurance is the most expensive of the three, by far, and is the one that most tree services don't carry. If a worker gets hurt on your property and his company (that you hired) does not have worker's compensation, the injured employee can sue you and your homeowner's insurance very well may not cover it. On Dateline NBC on Sunday, August 13, 2006 they did a piece about using unlicensed contractors. One of their examples was a tree service that did not carry worker's compensation insurance. If a tree climber got hurt on the job (a likely scenario) and his company did not carry worker's compensation, he could sue the homeowner for everything he had. In a seperate instance in a 2002 Court of Appeals decision, Fernandez v. Lawson,119, a tree worker fell and was seriously injured. His employer did not have worker's compensation so he sued the homeowner and won. The homeowner's policy did not cover the accident because, according to the court, "This type of dangerous work does not come within the household employee exception for coverage under the federal Occupational Safety and Health Administration rules". The homeowner was stuck for the entire amount. Although many California tree services do not carry this, this type of insurance is required by California State law.

    Both articles were in the
    San Diego Union-Tribune

    The top article was dated
    September 30, 2006 and the right article was dated October 31, 2006.
  3. Vehicle insurance-This covers vehicles, not equipment. This is rarely asked for. The minimum liability for large trucks is $600,000.00. Many homeowner's assume that liability insurance will cover this. Good Luck! While this type of insurance is required by law, many many tree companies do not have it.

HOW DO I KNOW IF THEY HAVE THESE 3 TYPES?

WAYS THAT DON'T GUARANTEE INSURANCE:

  • Their ad said they were insured. Places that have advertising do not verify the claims made, such as licenses or insurance. They place the ad as the client wants.
  • Their business card said they were insured. Printers do not verify qualifications, they just print it as the company orders it done.
  • They gave me a "certificate of insurance" when they gave me their bid. Authentic certificates of insurance are not made up in the office of the company you are hiring. The "certificates of insurance" that are handed out with a bid are copies of real certificates with the holders name whited out and are, in fact, no guaruntee that the policy listed is still in force if it ever existed.
  • The company I hired sent me a "certificate of insurance". A certificate, valid or invalid, that goes thru the office of the company you are hiring can be doctored or tampered with. One example was a company that had worked for a client the previous year. At that time he had insurance and produced a legitimate certificate of insurance. However, the following year he allowed his insurance to lapse because of the cost. The same client was prepared to hire him again once he received certificates of insurance. The tree service whited out and changed their copy of the old certificate and sent that. He didn't get away with it only because the client, seeing that the certificate came from the office of the tree service, called the insurance company to verify the certs and found that the policy was expired.
  • They showed me a copy of their policy. Insurance policies are generally paid in payments because of the large amounts of money or the premium is calculated using the previous month's labor cost. When a company first takes out a policy, the insurance company sends a copy of the policy upon receipt of a down payment. If the company quits making payments and the policy is canceled, the insurance company does not come pick up the copy of the policy. Therefore, a copy of the policy is not proof that the insurance is still in force.

A CERTIFICATE OF INSURANCE, PRIOR TO THE JOB START, IS THE
ONLY WAY TO KNOW IF THE COMPANY YOUR HIRED REALLY HAS THE NECESSARY INSURANCE!!!

Checking on insurance after an accident is too late.

Do you realize what your gambling with when you hire someone without insurance?
Everyone, at one time or another, has an accident.

WHAT IS A "CERTIFICATE OF INSURANCE", WHERE DOES IT COME FROM & HOW DO I GET A REAL ONE?

A certificate of insurance is a form the insurance company fills out and sends to the certificate holder (the certificate holder is the client, you). This form contains:

  1. The name of the company that is insured.
  2. The name of the insurance company.
  3. The type of insurance (ie. liability, automobile, worker's compensation, etc).
  4. The dollar amount of coverage (except in the case of worker's compensation in which case the benefits are established by state law.)
  5. The beginning and expiration date of coverage.
  6. The name and address of the certificate holder (you).
  7. The minimum number of days the insurance company has to notify the certificate holder (you) in the event the policy is canceled prior to the policy's expiration date.

This form is mailed and/or faxed directly to the certificate holder. This avoids tampering by the company you hire.

To get one, just call the company or individual that you have chosen and request certificates of insurance. Name the types of insurance that you want (ie. liability, worker's compensation and/or automobile). The company or individual you hire calls the insurance company and orders them, but the certs will and should come directly to you. These can take 3 to 5 days by mail and cost you nothing. There should be absolutely no extra charge to you. This is a service that is provided by the insurer to the insured company.

If, after receiving the certificates of insurance, you are still leary, feel free to call the insurance agent to verify your certs.

Accept no excuses.
Excuses usually mean that the company you picked
does not have that insurance.

If you still have questions, please call our office at 619-443-1775.