Ep. 539 Navigating the Hard Market in Tree Care Insurance

Rancho Mesa’s Marketing & Media Communications Specialist Megan Lockhart sits down with Rory Anderson, Partner with the Tree Care Group, to discuss how tree care companies can navigate the insurance hard market.

Show Notes: ⁠⁠⁠⁠⁠⁠Subscribe to Rancho Mesa's Newsletter⁠⁠⁠⁠⁠⁠

Host: Megan Lockhart

Guest: ⁠⁠⁠⁠⁠⁠Rory Anderson⁠

Producer/Editor: ⁠Jadyn Brandt⁠

Music: "Home" by JHS Pedals, “Breaking News Intro” by nem0production

© Copyright 2025. Rancho Mesa Insurance Services, Inc. All rights reserved.

Transcript

Megan Lockhart: You’re listening to Rancho Mesa’s StudioOne™ podcast, where each week we break down complex insurance and safety topics to help your business thrive.

I’m your host today, Megan Lockhart, and I’m joined by Rory Anderson, Partner in Rancho Mesa’s Landscape and Tree Care Group. And today, we’re going to talk about how tree care companies can navigate the insurance hard market.

So Rory, welcome to the show.

Rory Anderson: Hi, Megan. Thanks for having me in.

ML: Glad to have you. So the tree care industry has always carried a unique set of risks, but in today's insurance climate, business owners are facing challenges unlike anything they've seen before. So will you briefly explain what the commercial insurance hard market is for our listeners?

RA: Yes, of course. So just like any other financial market, it's always cyclical, right? So there's peaks and valleys, there's ups and downs. And right now in the commercial insurance marketplace, we're in what's called a hard market where the carriers are not collecting enough premium for the amount of claim dollars that they're paying out. And so, that's putting a lot of pressure on the insurance marketplace and the insurance carriers to really increase rates and collect more premium from their clients.

ML: Yeah, knowing why this is happening and how it affects your business is essential to navigating it successfully. So how is the hard market affecting auto, general liability, umbrella, and workers' compensation insurance for tree care companies?

RA: Yeah, it's a good question. And when we talk about the hard marketplace for tree care companies, those are really the four lines of insurance that are getting hit the hardest and the biggest line item as a business owner that you're going to be faced with at renewal, so I'll kind of go through each of those.

Commercial auto insurance right now is the leading cost driver for the hard market, and this has been really the biggest pain point in insurance programs for tree care companies, so premiums and rates are rising pretty much sharply due to vehicle costs, so new trucks, parts and repairs are costing more, medical bill, so post-accident treatment continues to escalate and increase year after year.

And then lastly, nuclear verdicts. So what that means, what that term is, is there's jury awards in the millions for even just like routine accidents. And that has really made the insurance companies more cautious and aggressive with rate adjustments. So that's really the heavy hitter is the commercial auto.

For general liability, it's also feeling some pressure, not as much as commercial auto, but carriers are dealing with, again, the rising medical costs for bodily injury claims. So we're seeing inflation in the medical industry and property damage payouts. So materials and labor costs are climbing. And then also what's called the long tail of claims on general liability. So that term refers to claims that are appearing years after the work is completed. And so, for example, if a tree care company is trimming a tree and years later a storm comes and brings that tree down, liability may still trace back to the original tree care contractor even though it had been trimmed two years prior. So that's a tough spot to be in as an insurance carrier being on a claim like that.

The umbrella, right? So the umbrella sits directly on top of auto and general liability. And so if we're seeing rate increases on the auto and rate increases on the GL, it's unfortunate that the umbrella premium is going to follow suit and kind of follow that trend with an increase as well.

And so the last line of insurance to discuss would be workers comp. And man, this has always been kind of a soft landing spot for tree care companies in an otherwise, you know, tough marketplace. And it's been considered a safe haven. And that's now changed. The 2025 peer premium for Class Code 0106 has increased and $9.91 to $11.24. And so what does that mean? So basically, pure premium is the baseline rate set by the state that reflects the expected cost of claims for a given class code before carrier expenses, fees, and profit is added to that. So we're seeing that number jump up quite a bit. And so the primary drivers of this increase are medical costs, a surge in CT or cumulative trauma claims, which has been talked about a lot, and higher wages, right, which increase claim payouts since lost wages are a core part of the workers' comp benefits. You know, all of those things are really what's driving this for tree care companies.

ML: Okay, wow. So having said all that, what can tree care companies sue to position their companies for success in the hard market.

RA: Yeah. And as a listener, you know, you're probably sitting there thinking, what, wow, this is intense. You know, what, what can I do? And, you know, while you cannot control market cycles, you can influence how carriers take a look at your overall company and take a look at your risk. And so what I would really kind of focus in on is strengthening your safety programs, prioritizing fleet management for the commercial auto line and starting your renewal cycle early with your broker. So, the more lead time that your broker has, the more leverage that you'll have with the marketplace.

And of course, always, we're recommending, choose a specialist insurance broker. Get a broker partner who really understands the risk. The generalist insurance brokers often miss, sort of the industry and insurance nuances, but a broker who really understands tree care can align your program with the carriers who understand your risk. So those would be a few things that I would focus in on.

ML: Okay, that's good advice. So Rory, if listeners have questions about how they can best navigate the hard market, what’s the best way to get in touch with you?

RA: Give me a call, (619) 486-6437 or you can shoot me an email at randerson@ranchomesa.com

ML: Okay, well, Rory, thanks for joining me in StudioOne™.

RA: Thanks for having me, Megan.

ML: Thanks for tuning in to our latest episode produced by StudioOne™. If you enjoyed what you heard, please share this episode and subscribe. For more insights like this, visit us at RanchoMesa.com and subscribe to our weekly newsletter.