Stump Grinding Insurance 101
If you are starting a tree stump removal business, you are going to need to protect your business with insurance.
At a minimum, you are going to need to purchase general liability insurance. But there are other types of insurance that tree stump removal business owners should consider getting as well.
In this guide, we will go over them with you as well as discuss why tree stump grinding insurance is important. We will also discuss what you should know about coverage amounts and saving costs.
What are the Insurance Requirements for Stump Removal Services?
Depending on your state, you may legally require a certain amount of insurance in order to operate a stump removal service.
For example, let’s say you want to remove stumps in Oregon. The Oregon Landscape Contractors Board (LCB) says here in response to the question, “Do I need a license to remove trees, grind stumps, and/or guy limbs?”, “Yes. Either an LCB or a CCB license will allow you to perform this work.”
A CCB license is a Construction Contractors Board license. This page explains that to get or maintain this type of license, you need liability insurance, and lists specific amounts for different types of contractors.
Again, this is just one example. You will need to check the legal requirements for your state to know what minimum insurance you need to carry to remove tree stumps.
Why is Insurance Important for a Stump Removal Business?
Obviously, it is important to get insurance for your stump removal business so you can legally operate. But it is also important to protect your business financially.
Let’s say you are grinding a stump, and a piece of debris flies into your customer’s glass door, shattering it.
If your business is insured, you can lean on your coverage to pay for the damage. If you do not have any insurance, you would need to cover the cost out of pocket.
Types of Insurance for Tree Stump Removal Businesses
- General liability insurance: This is one of the types of insurance you may be legally mandated to purchase for your tree stump removal business. If, in the course of conducting your business, you injure another person or damage their property, the policy may pay out. If you will buy just one type of insurance for your business, this should usually be it.
- Errors and omissions insurance: You can purchase this type of insurance to cover you in cases where you are accused of causing harm to your customer through negligence.
- Commercial property insurance: If you want coverage for your equipment and tools, then you need to purchase commercial property insurance (note that liability insurance covers your customers’ property, but not your own).
- Inland marine insurance: To cover your equipment while it is in transit, you need inland marine insurance.
- Commercial auto insurance: If you are driving a company vehicle to and from job sites, then you are going to need to buy commercial auto insurance to cover it.
- Workers’ compensation: If you have employees, you are required by the law to get workers’ compensation for them. In case your employees get sick or injured on the job, workers’ compensation will pay out.
How Much Coverage Do You Need?
At a minimum, you need as much insurance coverage as your state requires in order for you to maintain the license you need to operate your tree stump removal business.
Beyond that, how much should you get?
You can read a debate about this question here. While some users suggest that an amount as low as $250,000 might suffice, most recommend $1 million for liability insurance.
One user presents a particularly compelling argument for why such a high amount might be necessary, explaining that one could potentially hurl a rock into the windshield of a car while grinding, causing a fatal car accident. In a situation like that, you would be glad to have a million dollar policy.
How to Save on Tree Stump Grinding Insurance
Here are a few quick tips that can help you minimize your costs when you purchase insurance for your tree stump removal business:
- Shop around. Different insurance companies may quote you different prices, even with all other things being equal. It is worth taking the time to request multiple quotes so you can be sure of getting the best deal.
- Raise your deductible. If your goal is to keep your premiums low, one way you can do that is by choosing a higher deductible. Just be aware that means your out-of-pocket costs will go up if you need to make a claim.
- Bundle policies. If you get more than one policy for your tree removal company through the same insurance company, you can reduce your costs in some cases through bundling discounts.
- Look for other discounts. Some insurance companies offer additional savings. For example, if you maintain a good track record with no claims, you might get a discount.