# Bonded and Insured????



## GLOBOTREE (Dec 31, 2005)

I have a small business of tree cutting. I have had to forego a lot of jobs because I do not have insurance, like if the tree were close to a structure.
Where is a good place to start in finding insurance? Also, what does bonded mean?


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## skwerl (Dec 31, 2005)

'bonded' refers to a completion bond. IT is used in construction where you contract a builder to build you a house and you give him a $20K down payment. If he goes bankrupt in the middle of the job, the bond will pay to finish building your house. Bonds are normally not applicable to our business and people who ask for them have no idea what they are asking for, they are just parroting what they heard from the 'consumer advocate' on the local TV news. I carry $300K of liability insurance for any damage I may cause and if I don't complete a job then the customer doesn't pay me. The bond is not applicable for a job only taking one day (or even one week).

Look in your local phone book for insurance agents catering to small businesses. They can set you up for your liability insurance. Compare rates because they can vary widely. You need an agent willing to shop around and find you the best rates. A lot will depend on your experience level.


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## PTS (Dec 31, 2005)

I carry 1 million liability 2 million aggregate 1 million workman's comp.

Shop around. We are a high risk profession so you will pay out your back side.


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## Redbull (Dec 31, 2005)

What is aggregate?


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## PTS (Dec 31, 2005)

My understanding is that my policy will pay out up to 1 million twice in one year thus two million.


Which also means I would be looking for a new insurance company


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## Redbull (Dec 31, 2005)

I think you'd be looking after the first million dollar claim, or is that what the aggregate is for. Insurance for your insurance?


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## skwerl (Dec 31, 2005)

in all the years I've been insured, I've had one dinky claim. An outside AC unit for $1700. I dented it but it still worked fine. Was going to get prices for a replacement cover but the owner called his AC guys the next day to replace the whole unit. Then he called my insurance company after the fact and asked for reimbursement for the bill. He never talked to me until after he filed the claim. 

Everything else has been minor. We all have minor stuff, the idea is to minimize/ reduce the frequency of stupid damages. When it happens, just fix it fast and right and don't make a big deal out of it. I never give my customers the chance to complain over a broken sprinkler or dented gutter, it's fixed before they get the bill for the work.


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## a_lopa (Jan 1, 2006)

5 million public liability is the norm here 10 million is more and more common.

i pay $1350 a year liability insurance(had qoutes up to $5k) the excess is $2,500 no claims.


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## GLOBOTREE (Jan 1, 2006)

Thanks Ya'll. I will start looking at local insurance places.
I live in upstate SC, there should be plenty around.


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## Sunrise Guy (Feb 4, 2006)

*$1350/yr?*

What company? Thanks!


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## Nickrosis (Feb 4, 2006)

Sunrise Guy said:


> What company? Thanks!


Those are Aussie bucks, bro.


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## DDM (Feb 4, 2006)

Woodsman, Without Several yrs of verifiable experience Your going to have a tough time getting any.And I too live in the upstate no local companies carry it.


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## B-Edwards (Feb 18, 2006)

1 Million Liability $1,200.00 per year ,,,,, WC $44.00 per $100.00 great NorthWestern NC


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## toscottm (Sep 26, 2006)

*Arborist Bonds*



skwerl said:


> 'bonded' refers to a completion bond. IT is used in construction where you contract a builder to build you a house and you give him a $20K down payment. If he goes bankrupt in the middle of the job, the bond will pay to finish building your house. Bonds are normally not applicable to our business and people who ask for them have no idea what they are asking for, they are just parroting what they heard from the 'consumer advocate' on the local TV news. I carry $300K of liability insurance for any damage I may cause and if I don't complete a job then the customer doesn't pay me. The bond is not applicable for a job only taking one day (or even one week).



As an insurance broker licensed to sell bonds, I must disagree with the above.

While it is not common for a bond to be demanded of an arborist, it is not as irrelevant as seems to be suggested here. There are circumstances where a bond would be a reasonable request.

A bond is a product used to provide 'surety' that a commitment will be met.

A bid bond provides surety that a service will bid in good faith and upon being awarded a job will actually accept and proceed with the work. A performance bond provides surety that a service will meet the project specifications such as timeliness. A labour & material bond will provide surety that suppliers and subtrades will be paid (thus the property owner can feel relief from concern related to potential claims by those who allege payment hasn't been received).

Most homeowners will lack the sophistication to understand the purpose of a bond and indeed may be 'parroting' as suggested. If a homeowner asks for proof of insurance and bonding for a one-day removal job, it is obvious that they don't know what they are talking about. However, a bond may be a reasonable request when a project will be significantly involved. Sophisticated buyers of arboriculture services such as municipalities, utilities, land developers or property management companies will have risk managers on staff that may impose a bond requirement as a reasonable assurance (surety).

Hope this is helpful!

Scott


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## jonseredbred (Sep 26, 2006)

bonding is too hard to get in the case of a l&m bond, our local municipalities put those in as a matter of contract law, by the advice of attorneys & insurance agents.

since no materials are used very often in municipal tree contracts (if at all) instead, we routinely request the municipality to drop the bond requirement in lieu of lien releases or we dont take payments until the completion of contract.


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