# Backwards insurance / economy



## treeman82

I don't get it. 

I pay a LOT of money (for my company) each year for proper insurance coverage. I carry 2 mil of general liability... if something happens, I'm covered. The trucks are covered, the guys are covered (almost 30% through the state insurance fund) etc. However to get the liability I had to jump through a bunch of hoops and was lucky to get it. They audit me every year, and are very strict about that. The comp, they audit me quarterly... and that's a headache in and of itself. I am proud however that I have proper coverage, and that my customers are protected if heaven forbid something should ever happen.

However I see all these other guys running around... landscapers. They pay next to nothing for coverage, they aren't covered for the tree work, or excavation work that they do, and yet they do it anyways. A customer asks... "Do you have insurance?" They reply with "Yes, I am insured." Meanwhile if they do any damage... they know they aren't covered, and try to get out of it however they can. They aren't audited yearly, and they don't have to jump through all kinds of hoops to get coverage. Just "I'm a landscaper, I want $X in coverage please." They get all the jobs they want, because they're there anyways for the lawn, or have made the connection through whatever other means... money in their pocket is better than in the pocket of somebody else.

I mean it's only natural that a landscaper should have big excavators, big trucks, backhoes, and big chippers. Only makes sense right? As for knowledge of the business... "Meh, that pine is dead, you should take it down." Meanwhile it's a larch.

On the other end of things... 

The price of fuel is going up, lots of things are going up. What's coming down? Prices. Last year I could sell wood for $300 a cord without a problem. This year it's down to $150 - $175 per cord, try getting $200 per cord and you're gonna be sitting on a pile of wood for a while. It's becoming a war of the undercutters now. You'll do it for $4,500? He'll do it for $3,500. The guy who gets it isn't even charging $3,000. Meanwhile it's a 3+ day job for 3 people, all the junk wood and chips have to go. Or... you want $12,000 for these trees that you need to bring in a crane for, and have to pay to get rid of the wood? Well this other guy said he'd do it for $8,500, and we have another price for $4,500... that's who got the job BTW. 

I'm sorry... but prices should be going UP, not DOWN.

I realize that complaining about this isn't doing any good, but what else can be done really? I mean I'd love to go to ALL of the insurance co's and say "You're busting my chops about the work I do... when I do my best to comply, and am flat out telling you that I do dangerous work... I pay for that too. Why don't you go and bust all your landscaper clients' chops too the way you bust mine?" Level the playing field sort of. Like the saying goes "If you don't want to run with the big dogs, then stay on the porch." You want to compete with me for work, then do it the right way. As for prices... well there's not much I can do there. Companies want to keep their guys busy... I can't ask a customer to spend more money with me just because I want to make money off of them.


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## Husky137

The world is against you. It's a big plot.


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## Dadatwins

Insurance companies are screwed up, when I looked for insurance just to do stump grinding, because it is considered a tree work related item no company in Virginia would cover me. Virginia dropped all tree care coverage after Hurricane Isabel a few years ago. Landscape insurance covers a guy with a backhoe capable of digging down 18' into the ground, but not a stump grinder. screwed up :censored: system


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## Slvrmple72

Hang in there Treeman! I know it is very frustrating to deal with customers who want work done for free and hacks (underinsured or no insurance :censored: holes) who happily oblige them but stay competitve and promote your quality work. Educating homeowners as best you can, maybe adding info on your website about insurance info. specific to tree care. Things are off to a rough start but they will pick up.


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## lxt

Treeman, I hear ya!! some areas are plagued with this, I downsized my equipment to save my workforce!! helped tremendously for now!! If the pickup truck trimmers & handyman/landscape cash only people keep going Ill have no choice but to move on or dare I say, join em!

I wonder sometimes if that would/wouldnt help, like you treeman I go through all the hoops & headaches to make sure im doing it Right!! push comes to shove, its move on or adjust to stay competitive(not necessarily profitable).

this is why & I hate to say it, but there needs to be some enforced regulations, I dont know.... maybe Ill cut my insurance, do cash only jobs, pay the men cash & just do what is minimally necessary, But my luck It would bite me in the Azz!! I just keep pluggin away, atleast some people & businesses who hire me know how it works........this helps

LXT..........


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## huckaberry3

It is not only in the tree service. I own a small construction company and have all the ins and comp. The company that underwrites my policy uses the quotes from uninsured companies in my area to figure cost. These other companies are using nondocumented laborers and do not carry insurance of any kind. When I asked the adjuster why they even consider these for pricing he just looks at me and informs me that they are cheaper and that is all the company will pay. 

Kind of a catch 22 if I do not have to pay the ins cost then I could meet their prices allowed by the ins companies.

Time to get out of buisness I guess.

Huck


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## intheelements

Dadatwins said:


> Insurance companies are screwed up, when I looked for insurance just to do stump grinding, because it is considered a tree work related item no company in Virginia would cover me. Virginia dropped all tree care coverage after Hurricane Isabel a few years ago. Landscape insurance covers a guy with a backhoe capable of digging down 18' into the ground, but not a stump grinder. screwed up :censored: system



I also had a problem finding insurance for just stump grinding when I started four years ago. It took four months to find a company that would insure for just grinding. I also agree with Treeman. I pay a large premium for insurance and get under bid by other stump grinders that don't have any insurance and put the money they make into their pockets. But I guess that's the way it is nowadays


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## Tim "Bo" Snell

I pay a LOT of money (for my company) each year for proper insurance coverage. I carry 2 mil of general liability... if something happens, I'm covered. The trucks are covered, the guys are covered (almost 30% through the state insurance fund) etc. However to get the liability I had to jump through a bunch of hoops and was lucky to get it. They audit me every year, and are very strict about that. The comp, they audit me quarterly... and that's a headache in and of itself. I am proud however that I have proper coverage, and that my customers are protected if heaven forbid something should ever happen.


Hey, TreeMan, I think just about any professional arborist out there could have written this; in other words, you are speaking for a lot of us frustrated small business owners/arborists. I, too, carry $2M in Gen Liab & my Work Comp costs me out my wazoo! (If it's any consolation, I pay over 47% for my W.C. here in NC--and I have a clean record, never having made a claim!) Am I required to have WC? No, but it is the right thing to do for any employees & uncovered subs, for the client, & for me. Yes, it is extremely frustrating to see landscape companies out there doing tree work & not paying WC rates that a tree service pays. But lots of tree services exist (perhaps the majority of small tree services?) that don't even carry WC insurance, and how do you compete with them for tree work? For myself, I focus on doing only quality work and really try to educate the client (i.e. the homeowner) on the importance of WC & GL insurance, and on hiring an arborist who knows his stuff & emphasizes safety. Trust me, people that try to make money by undercutting other people will not make any real money; in fact, those people will undercut themselves out of a living in the long run. People that pay well (and they do exist, believe it or not) are looking for a professional tree service that has proper insurance, a good safety record (with workers who wear the proper PPE), a knowledgeable arborist on staff (that would be YOU!), and ethical business practices. 

Hey, I feel your pain because I, too, am experiencing it. But, as the saying goes, when you reach the end of your rope, tie a knot & hang on! Whoo-hoo!


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## ainsleywaters

*Undercutting*

Here's one for you.... I bid a $13,000 residential job... and that was a rock bottom winter price. I had a number of reasons to believe this job was "in the bag" Got a call a couple weeks later and he told me he had requested one other bid. It came in at $6000. I told him my expenses were higher than that and I couldn't compete with a "fly by night" He went on to inform me that "they are a substantial organization" and I told him to "let them have it". Turned out it was the regional manager of a national line clearing company that was stealing the company's equipment and crew on the weekends to do side jobs!!! How could anyone compete with that? 

Here are your choices... Fight Flight or Fraud


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## OLD CHIPMONK

Let's define substantial company; er like around here ; 3 pick-ups with three dual axle trailers. Liability ins. & workers comp. ( owners not included ). We can't compete either. But, while they are busting their backs on that job, we're out making a fair market price on something else.


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## cjnspecial

ainsleywaters said:


> Turned out it was the regional manager of a national line clearing company that was stealing the company's equipment and crew on the weekends to do side jobs!!! How could anyone compete with that?
> 
> Here are your choices... Fight Flight or Fraud



I hear this same story all the time...mainly new or inexperienced businesses that hire someone posing to be a legit company and when it comes time to pay, the huckster says something like...." uh, I'll give you 10% off if you make the check out to me personally." Take my advice fellas, ONLY WRITE THE CHECK OUT TO THE NAME ON THE INSURANCE CERTIFICATE or you will get hit hard on your insurance bill when your insurance company find out about it.


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## ropensaddle

Yeah it sucks, overhead is one of the highest in business,everything 
we have either takes fuel or wears out and always has to be insured.
The big problem is; too many of us and lots of two year in the biz, and
they get in their pickups with their pulan wildthings and steal our work!
Then the illegals, that we have to pay tax to support, it is sometimes too
much. There is and old song about saw mill life, that fits right in this topic!
Then the almost constant nagging salesmen, that always seem to call 
when work has been slow and the phone silent. I used to try not to be rude not anymore, I tell them to get the illegals out and I may afford your overpriced equipment Trying to remain optimistic is not eazy in this biz anymore.
My biggest peeve is the friggin yellow pages!!!!!!!!!!!!!!!!!!!


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## OLD CHIPMONK

What's wrong with wildthings & yellowpages ?


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## ropensaddle

OLD CHIPMONK said:


> What's wrong with wildthings & yellowpages ?



Both become flooded  We would not do it if we did not have something to bit?h about lol!


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## OLD CHIPMONK

I agree 100 %.


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## ckliff

FYI - I have just a pickup & trailer, two MS200t, one MS440, one HT131, saddles , ropes, certified arborist in Kansas. Okay, I'm still fairly new at this (six years), but* I do have GL & WC! *

The difference is not necessarily in the equipment you own, but your attitude on doing the job right & responsibly. Just cuz a guy "just has a pickup & trailer" does not mean he is a hack. 

And yes, the ins. is a real bite out of my bottom line!


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## OLD CHIPMONK

Around here it means they are not paying taxes on income derived from tree work. They are not declaring their income, no way , shape or manner. You, my friend, are an exception to the rule. My hat is off, to you !!!!


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## ropensaddle

ckliff said:


> FYI - I have just a pickup & trailer, two MS200t, one MS440, one HT131, saddles , ropes, certified arborist in Kansas. Okay, I'm still fairly new at this (six years), but* I do have GL & WC! *
> 
> The difference is not necessarily in the equipment you own, but your attitude on doing the job right & responsibly. Just cuz a guy "just has a pickup & trailer" does not mean he is a hack.
> 
> And yes, the ins. is a real bite out of my bottom line!



You are right there it was more directed toward a different sector.
I worked out of my pickup and trailer two years but like you paid
insurance etc.


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## Tim "Bo" Snell

OLD CHIPMONK said:


> Around here it means they are not paying taxes on income derived from tree work. They are not declaring their income, no way , shape or manner. You, my friend, are an exception to the rule. My hat is off, to you !!!!




It's not just the unethical hacks; clients--or potential clients--are often the source of the problem, too. I once did an estimate for a man that, throughout my hour or so on his property, kept talking about how much he lived his life "by the Good Book," how he was a "good, church-goin' man," and how he "always did the right thing." When I gave him my written proposal for tree work, priced at $1,000.00 (One-thousand dollars [U.S.]), he looked at me, lowered his voice, and, while looking around him, whispered to me: "Okay, that's your CONTRACT price; now what's your CASH price?" 

I asked him what he meant, as he could pay me by check, cash, money order, etc., but the price would still be the same, $1,000.00. 

He looked me in the eye and said, "Now you know if I pay you cash that you won't have to pay tax on it, so I think you ought to give me a discount of at least several hundred dollars. The most I'm going to pay you is $700.00 cash." 

"Sir," I replied, "You may pay me cash. And even though what I do with that money is none of your business, I'll tell you right now that I'll deposit it in my business account and pay my taxes due on it even though I hate paying taxes as much as the next person."

My potential client then said, "Well, I hope you know that what you're telling me is going to cost you the job, 'cause I can find a tree man out there who is willing to lower his price if I pay him cash on the barrel. I'm not going to pay your higher price just to see some of what I pay go to Uncle Sam." 

For a moment I thought about asking him about what God & his conscience thought about the situation. Then, thinking twice about it and knowing that I wasn't going to change his mind--and he certainly wasn't going to change mine--I laughed, kicked the dust from my shoes, and walked away. 

I'm no saint, but I ain't gonna cheat! (I have enough other sins to worry about....)


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## Prune Juice

*Awwwwk.*

I.m having a panic attack.


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## I can do it

I am just starting a business. I have not sold one job. For a month now I have been filing all the paper work, getting insurance quotes, jumping through all the hoops. I been working with one agent now for about three weeks and still have not gotten a quote. It's rediculous.

I got back today a quote for WC. It was through the roof, I applied for one PT groundmans salary only but they included mine as well. I originally told them I was to to be exempt since I do not need coverage for my self since I am an officer of the company but they still quoted it that way. 

I hope to get out there and do some work by the middle of June. I been paying out sums of money and not one dime coming in yet because I want to do this right and not be a hipocrit because I am always getting after a close friend who does not carry any insurance what so ever.

I was happy to hear my WC was quoted at 27.81 on the hundred. 

I still have a few ducks to line up before the insurance quote gets here. I still have to fly to Florida to pick up my chip truck, still need to decide on a chipper and go purchase all the ropes, handtools and saws I need.

I think after 16 years of climbing for everyone else it will be worth it in the end.


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## Ekka

The only way this gets fixed IMHO is through governance.

As long as any ole Tom or Harry can grab a saw and cut a tree the problem stays.

In fact, when people lose jobs in a crap economy it gets worse as they enter the jobs that aren't regulated .... lawn mowing, dog washing, and tree cutting.

Over here we're doing stuff for prices back in the 90's yet fuel is triple the cost alone.

It's a race to the bottom. When the mentality shifts from ...

... *how much can I get for this tree to what's the minimum I can put on this tree to get work* you know the line has been crossed. That line was etched into stone here around May - August 2004. 

During the last 4 years not only did the work dry up but the competition got worse and the size of the equipment larger. Means more people with bigger gear processing more trees at a cheaper rate .... but having to do more volume for the profit.

Did you get all of that.

At the other end of the scale you'll have the pick up and trailer door knockers. You see, the way they think is they only have to land 1 tree job a week to beat the money they'll get paid.


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## I can do it

It's the same way here. The market is tough. We have one guy not a truck and trailer but the opposite. One day the guy just expanded to two cranes, mulitple crews and spending huge dollar amounts on advertising and just beating everyones prices. He is doing quantity not quality work. I heard his salemen go out on 40 calls a day and lands about 30 of them. That's insane. 

I'm hiring a door knocker. My dad climbed for years and then sales for 30 years. I'm bringing him out of retirement to go "shake the bushes" as he calls it. It's something he and I both need. He's just one of those guys who needs a job to stay healthy physically and mentally. He's really anxious to get started and I can't wait to see how he does. I was trying to put together some sort of projection for cash flow and asked him realisticly how many jobs can you sell a day cold calling and says to me at least 3... My projections starting our are working 3 jobs a week. So we'll see.


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## Ekka

The streets are stuffed as full of door knockers as the letterboxes are of junk mail. :monkey:


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## I can do it

I don't have a problem with door knocking. We need to start somewhere. Some people just don't have time to pay attention to their trees. You take care of those people and eventually your not knocking on doors their knocking on yours.

That's the difference between the guy who been running around in a pickup truck with a chainsaw and spikes for 10 yrs and the guy who did it for a year and accumulates and builds a buisness aquiring more and more equipment. I was thinking about that the other day. How do you run around in pick up 3 or 5 days a week and not make money or grow? Where does the money go? 

I was pretty conservative with my cash flow projections and after paying my loans, insurance, taxes, payroll to me and ground help I still have another $30,000 cash on hand I need to hide or buy equipment with or pay up on next years expenses.

I can advertise all I want and if the phone's not ringing we're not throwing the in towell we're knocking on doors.


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## Ekka

Take Care When Removing Tree Damage | Arborist Says Schemers Sometimes Go Door To Door



> A warning has been released by the Nebraska Forest Service to be careful about whom you hire to help clean up tree damage. When looking for someone to clear limbs and trim damaged trees, do your homework first. The first red flag, state arborists said, is an individual who goes door to door soliciting business. Reputable companies typically won't use that tactic.


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