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.
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.
Is your tree service covered for this?
Don’t wait to find out until after it happens!