What Are the Insurance Requirements for a Tree Service Company?

Tree service insurance provides tree care professionals with coverage for liability risks and protects their tools and equipment if damaged or stolen. Note that the tree service industry has boomed in the last few years, growing by nearly 11% between 2017 and 2022.^[1] With this surge comes the need for solid asset protection.

Learn what tree service insurance costs along with coverage options for your business.

Key Takeaways Tree care professionals are legally obligated to have workers' compensation and commercial auto insurance in most states if they have workers and company vehicles. Tree work insurance can cover third-party injuries, damaged business property, professional mistakes and more. In general, general liability insurance costs $365 to $1,700 per year on average, while commercial property costs $500 to $3,500 per year. However, trimming and cutting trees are high-risk activities and these types of businesses may face higher-than-average rates as a result.

Is Insurance Required for Tree Care Professionals?

In most states, tree care professionals are legally required to carry workers’ compensation insurance if they employ a certain number of workers. In addition, they should buy commercial auto insurance, as personal auto insurance will not cover drives made for commercial use.

Beyond the above tree service insurance requirements, tree care professionals will want liability insurance for tree work, as well as coverage for damages to their tools and equipment

What Type of Insurance Do You Need for a Tree Service Business?

Tree company insurance comes in all shapes and sizes. We've broken down each type of coverage so you can see what your options are, including any add-ons you may want to include to round out your protection.

General Liability Insurance

General liability insurance for tree service professionals protects your company if a third party gets hurt, their property is damaged due to your operations or if there's a trademark infringement issue. For example, you may be covered if you cause damage to a client's property from a falling branch, a passerby trips over your equipment or if a competitor sues you for stealing their tree service slogan.

Commercial Property Insurance

Commercial property insurance is critical for tree service contractor businesses, particularly those with a physical location or expensive business property, such as tools, equipment or office furniture. This type of coverage provides protection for your business property against risks such as fire, theft and certain weather-related damages.

Consider this: if a storm causes damage to your office or your equipment gets stolen, commercial property coverage can help you cover the cost of repairs or replacements.

Business Owner’s Policy

A business owner's policy (BOP) is a package that often includes general liability insurance and commercial property insurance. Business interruption insurance is typically bundled in as well and it will cover your daily operating expenses if your business has to temporarily close as a result of a covered loss. This combination provides a broad range of protection, perfect for new businesses and can often be more cost-effective than purchasing each policy separately.

Commercial Auto Insurance

Commercial auto insurance is usually required for any vehicle used in business operations. It covers potential costs arising from vehicle accidents, including damage to your own work vehicles, injury to your employees or injury/damage to third-party drivers and their property.

Workers' Compensation

Workers' compensation insurance is required in most states for tree service businesses with employees. This policy covers medical expenses, rehabilitation costs and a portion of lost wages if an employee gets injured on the job. For instance, say a fallen tree breaks one of your crewmen's legs and they cannot work while they are recovering. Workers’ compensation would pay some of the worker’s lost income and their medical bills.

Contractor’s Tools and Equipment Insurance

Contractor’s tools and equipment insurance pays to repair or replace mulchers, stump grinders and log loaders and other tree care tools if they are damaged due to employee negligence, lost while at a job site, stolen or if they broke down after the warranty period has expired. Additionally, your plan's protection will apply to borrowed equipment, which is ideal for when you head to Home Depot for an auger or chainsaw rental.

Additional Coverages To Consider

Several additional tree service insurance coverage options can further safeguard your business:

• Commercial umbrella insurance: Provides an extra layer of liability protection above the limits of your other policies. It can be instrumental in the event of a major claim or lawsuit that maxes out your insurance limits.
• Professional liability insurance (errors & omissions): Another type of tree service liability insurance, this coverage protects your business if you're sued for negligently performing your services, such as if a customer sues your business for a recently planted tree that quickly wilted.
• Employment practices liability insurance: Covers employee claims that result from your business's general conduct, such as discrimination, wrongful termination or sexual harassment. This coverage is usually included in a workers' compensation plan.
• Cyber insurance: Protects your business from losses resulting from cyber attacks or data breaches. This is particularly valuable coverage if your tree service business stores customer information on computers or similar equipment.
• Inland marine insurance: Covers property and equipment that is in transit over land. Great when getting chainsaws, wood chippers, stump grinders or ladders to and from a job site.

How Much Does Tree Service Insurance Cost?

The cost of tree trimming insurance varies based on several factors, including the size of your business, the scope of your services, the number of employees, the type of equipment you use, your location and which coverages you choose.

For example, the cost can range from $1,400 to $7,500 per year for a tree service insurance plan for a single-person business that includes a business owners policy, commercial auto insurance and professional liability insurance. Now let’s say you hire two employees and now have to buy workers’ compensation insurance. Adding this coverage can increase your annual premium by another $700 to $2,800.

The below table shows the average pricing for various insurance options available to tree service businesses.^{[2][3][4][5][6]}

Insurance	Average Annual Cost
General Liability Insurance	$365 to $1,700
Commercial Property Insurance	$500 to $3,500
Business Owners Policy (BOP)	$350 to $2,500
Commercial Auto Insurance	$750 to $2,500
Workers' Compensation Insurance	$375 to $1,400 per employee
Tools and Equipment Insurance	$150 to $540
Commercial Umbrella Insurance	$883
Professional Liability Insurance	$300 to $2,500
Employment Practices Liability Insurance	$1,500 to $2,250
Cyber Liability Insurance	$650 to $2,357
Inland Marine Insurance	$736

Remember, tree service companies will likely face higher premiums than other businesses due to the high-risk nature of their work. Projects such as cutting down and removing trees and trimming branches can all lead to potential damage to your client’s property and injuries to your workers.

How To Get Insurance for a Tree Service Company

To secure insurance for your tree service company, start by identifying a reputable insurance provider, preferably one with experience in the tree service industry. Their familiarity with your business's unique risks and demands can help tailor an insurance package that meets your needs. Prepare to share details about your operations, including your services, workforce size, equipment, vehicles and loss history.

It can sometimes be difficult to procure insurance coverage from a standard provider due to the high-risk nature of the tree service industry. In this case, you may need to narrow your search to the excess and surplus (E&S) market.

Regulations differ for E&S carriers, meaning they can write policies for businesses that standard providers can’t, offering tailored insurance for high-risk businesses such as tree service companies.

Once you’ve found a suitable agent and they have assessed your business and suggested an appropriate policy, carefully review the terms. Ensure you understand the coverage limits, deductibles, exclusions and claims process. Don't hesitate to ask your agent for clarification on any points of confusion.

After finalizing the policy, make your first payment and obtain proof of insurance. Clients typically require a certificate of liability coverage before work can commence.