catastrophic claims. Create an annual risk management action plan (RMAP,) a written document that outlines areas needing improvement. This should be updated at least annually based on in- dustry and loss trends of your organi- zation. BROKER AND INSURANCE-CARRIER SELECTION Carrier and broker selection is key to successful outcomes. Many carriers and brokers try to dabble in tree care but lack true understanding of the in- dustry. The carriers that ask questions about the maximum height at which you work do not really understand what you do. They are trying to lim- it their exposure to height by asking these questions. When given the “magic” answer of 30 feet or less, they are more likely to pro- vide terms because they perceive the risk as being less than that of others working without restriction. We know
Workers’ compensation insurance is a vital component to the overall health of your business.
that tree care companies are not think- ing about the maximum height they provided to their insurance company when they bid to work on a 90-foot tree, and we know that transparency is always best. In closing, it is important to know how insurance companies keep score. They do this by measuring premiums paid versus claims dollars, both reserved and paid. Insurance companies desire a loss ratio of 60% or less. The average expense ratio for insurance carriers is around 30%. These are all of the expenses needed to issue policies and service their clients. Having the knowledge of how profit- able you have been with your insurer is great for you when budgeting for your next renewal.
ABOUT THE AUTHOR Mark Shipp, CIC, is senior executive vice president of Hub International and a practice leader for Hub Arbor Insur- ance Group. A commercial insurance broker with 30 years of experience ded- icated to serving clients, he launched the first-of-its-kind homogenous group captive for tree-care and vegetation companies. He is the founding broker of TCIA’s endorsed insurance program, ArborMAX. He helped design the TCIA accreditation program, assisted in the launch of TCIA’s Arborist Safety Train- ing Institute (ASTI) and was honored with the Pat Felix Volunteer of the Year award in 2008. Mark is also a member of the Utility Arborist Association’s safe- ty committee. His philosophy is to instill safety culture within organizations to manage risk more effectively.
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