UKTC Archive

Re: one-off insurance?

Subject: Re: one-off insurance?
From: Scott Cullen
Date: Sep 01 2006 13:16:28
Interesting.

In concept arb policies in the US are similar but the maths differ.  
Contractors must carry General Liability to cover works and Workers 
Compensation to cover worker injuries (we have no national health).  Both are 
priced according to a "manual rate" a %age charged against payraool, which is 
taken as a surrogate for the amount of exposure through hours worked.  You 
pay a deposit premium upfront and are audited at the end of the premium 
years.  More hours, you pay more. Less hours you get a refund or credit.  
Also based on the number of claims there will be an "experience modifier."  
Work safely and the manual rate goes down.  Have a lot of claims and it goes 
up.

Manual rate GL on tree works might be say 7-10% of payroll.  WC in some 
states is 20% or even over 50%! So % of revenue depends on the ratio of 
payroll to revenue... how good you effective margin is, what gets chared to 
customers as equipment or material in addition to the crew rate and overhead.

The bottom line is that quality, responsible tree works ain't cheap.

When I was in business if you were insured for tree work you were insured.  
No height limits.  Note that all vehicles and special equipment like cranes 
are insured separately.  And consulting must be covered separately by 
Professional Liability. 

SC


  ----- Original Message ----- 
  From: benfuest 
  To: UK Tree Care 
  Sent: Friday, September 01, 2006 8:06 AM
  Subject: Re: one-off insurance?


  Scott
  I am referring to one crew made up from two climbers and two grounds folk. 
  My insurance chap is not interested in how much I charge, just how often is 
  he at risk from a claim, I have to tell him how many installations I expect 
  to do in the year. So lets say for arguments sake it is ten and I do 
eleven. 
  Then I must contact them and inform them that I will be exceeding my quota 
  and he bills me accordingly. So if I had a really good year and put up 
  twenty systems then my policy cost escalates to meet the potential risk to 
  the broker. In other words the more I do the more it costs. To answer the 
  question of % cost per installation it is around about 10 % . It could of 
  course go the other way and I have cover for ten installations and I do 
two, 
  mmm well that is a bit tough as we have to pay our premium in advance so we 
  may well be have spent the money and have no work. This is impossible to 
  factor in and just has to be worn,  all part of the territory. Also as 
  apoint of interest I believe that arb policies have a height limit of 
twenty 
  mtr, this can be exceeded but the broker must be informed. As we are 
  involved in the lightning protection work then we always exceed this limit 
  and have gone to 50 mtr or so many times, the call is always made and 
  supported with a letter of reply. There is probably a upper and lower limit 
  but I have no idea what this may be or if it exists.
  Ben

  ----- Original Message ----- 
  From: "Scott Cullen" <dscottcul@xxxx.net>
  To: "UK Tree Care" <uktc@xxxxxx.tree-care.info>
  Sent: Friday, September 01, 2006 11:16 AM
  Subject: Re: one-off insurance?


  Ben, just for perspective, what gross billing volume per day does that 
  cover?  Or how many crews?  It needs to be some %age of production that 
  leaves you enough to pay all the other bits and keep just a little profit. 
  That's what people need to understand.

  SC
    ----- Original Message ----- 
    From: benfuest
    To: UK Tree Care
    Sent: Friday, September 01, 2006 5:38 AM
    Subject: Re: one-off insurance?


    Hi all
    I recall that my insurance broker charges me on a time exposed to risk set
    up. OK so what I do is a little different in that we have no saws on site
    and we do not dismantle or fell. All we do is install Lightning protection
    bits and bobs. My policy runs at approx £220 per day exposed to risk.

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To unsubscribe send mailto:uktc-unsubscribe@xxxxxx.tree-care.info

The UKTC is supported by The Arbor Centre
http://www.arborcentre.co.uk/