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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.
Is your tree service covered
for this? Don't wait to find out until after it happens!
2. Worker's Compensation Insurance - This type of insurance covers the
injury of an employee (medical costs, injury income,
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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: - The name of the company
that is insured.
- The name of the insurance company.
- The type of
insurance (ie. liability, automobile, worker's compensation, etc).
- The
dollar amount of coverage (except in the case of worker's compensation in which
case the benefits are established by state law.)
- The beginning and expiration
date of coverage.
- The name and address of the certificate holder (you).
- 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 (except for additionally insured or
other special endorsements). 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.
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