Author Archives: Guest Author

Certificates of Insurance: The Myth and the Reality

Content written by Rick Weden for May issue of TCI Magazine

As a tree care professional, you are probably all too familiar with insurance certificates, and depending on the size of your company, some of you may be requesting insurance certificates on almost a daily basis. But what are these documents that get issued on your behalf, and what do they truly mean?

What does a certificate of insurance tell you?

An insurance certificate is little more than an abstract that represents only a very few basic provisions of one or more insurance policies held by the insured company. Even though the form notes the effective and expiration dates (usually one-year policy terms) of the policies noted, it only represents that the insurance noted on the form is in effect on the day the certificate is issued. Basically, it is a one-day snapshot in time. It grants no guarantee that the policies noted will remain in effect beyond the date of issue of the certificate.

Certificate holder

When your customer asks you for an insurance certificate, the certificate is issued with your client noted as a “certificate holder” on the bottom-left corner of the document. So, does a certificate of insurance grant any insurance coverage to a certificate holder? Simple answer – not really.

A certificate holder has no rights under the policies noted on a certificate of insurance. Only you, the named insured, have rights under the policies noted. And let’s also understand that an insurance certificate does not create any form of contract between the certificate holder and the insured, or the insurance company noted on the insurance certificate.

Not uncommon are cases where certificate holders require that they have what is called “Additional Insured” status noted on an insurance certificate. “Additional Insured” status is usually aligned with the terms and conditions of a separate written contract between the certificate holder and the insured and is governed separately under the terms of the contract. The terms and conditions of a written contract between the insured and the certificate holder may not always fall within the scope of the insurance terms contained in the actual insurance policy held by the insured.

Whenever one is in a situation where written contracts and insurance certificates are involved, along with a careful review with your insurance professionals of the wording on insurance certificates, one also should seek professional legal advice on any written contracts that may be involved.

Does a certificate of insurance act as an insurance policy?

To further emphasize what was stated previously, no, it does not. Other than identifying the specific policies that the insured has in effect, an insurance certificate provides no detail to the forms of coverage, or lack thereof, contained in the various policies noted.

I once heard a story where a tree care company decided to begin offering snow-removal services to their clients. They assumed that their General Liability policy extended coverage for snow-removal services, and never specifically discussed with their insurance agent if they had snow-removal liability coverage. One of their new snow-service customers asked them for an insurance certificate, which the tree care company asked their agent to send to the customer. During the entire communications process, nothing about snow services was ever mentioned between the tree care company and their insurance agent. The certificate was issued.

Later, someone slipped and fell in the customer’s recently plowed parking area. A claim was filed against the tree care company for failure to provide proper snow removal. Unfortunately, the tree care company’s General Liability policy excluded claims stemming from snow-removal services, and the claim was denied. After the denial of coverage, the tree care company argued that they had the coverage, citing the insurance certificate and stating that the certificate was evidence of snow-removal coverage. Unfortunately, it was later proven in court that an insurance certificate is not an insurance policy and does not, and will never, grant specific terms of coverage, including exclusions in the policy. The more I think about it, this isn’t a story. It’s a nightmare!

Statements and notations

“Can your insurance agent make certain statements for you on a certificate of insurance beyond the basic insurance information?”

Fast answer, maybe only a very few, but not many.

Insurance agents can only note “Additional Insured” status for a certificate holder, and a very few other terms, so long as the actual insurance policy that the certificate is being issued under does, in fact, contain those terms in the coverage and policy conditions. Diligent insurance agents always check their client’s coverage before they make any notations on an insurance certificate. The insurance agent also may contact the insurance company directly for their approval before making certain notations on an insurance certificate.

Several states have insurance-certification laws that govern what can be legally stated on an insurance certificate. Where applicable, failure to abide by these laws can pose serious consequences for insurance agents and their clients.

What terms can be on an insurance certificate?

“Our tree care company is about to bid on a big contract for tree care services for a very large homeowners association. The homeowners association has detailed exactly what insurance terms are to be stated on the certificate of insurance that we are to provide for them.”

This example ties in with the previous commentary regarding the scope of written statements that can be made on insurance certificates. I am including this example here, as we are encountering these types of situations more frequently. If you find yourself in a position like this, you should discuss and review the requested terms with your insurance provider. If there are certain terms that your insurance agent is not comfortable noting, you should discuss them with your prospective client.

Remember what I noted before. An insurance certificate is not an insurance policy, and only the insurance company issuing the actual insurance policy has the right to determine the terms and conditions of the policy. Unauthorized statements made about the policy on an insurance certificate can very easily be determined as erroneous, and perhaps be construed as misrepresentations of the terms and conditions of the actual insurance policy.

Are sample copies valid?

“I’m tired of having to constantly call or email my insurance agent to get certificates of insurance. Can’t I just copy a certificate of my insurance to hand out as my clients request them?”

This practice is highly inadvisable. Sometimes the terms and conditions of one’s insurance plan can change over time, perhaps upon the individual policy’s renewal, and you run the risk of giving someone an insurance certificate that may have inaccurate information on it. An honest error? Probably, but an error nonetheless that could result in misunderstandings or, worse, an allegation of insurance fraud or misrepresentation. Insurance companies and their agents alike discourage this practice. We are more than happy to issue as many individual insurance certificates as you need on a day-to-day basis.

Some business owners have posted a sample copy of their insurance certificates on their websites. This practice is discouraged. There have been numerous cases where insurance certificates have been stolen from a website and used as what becomes fraudulent insurance evidence by unscrupulous operators.

Legitimate certificates of insurance

“My tree care company uses several subcontractors for crane work, stump grinding and some landscaping, and I regularly obtain certificates of insurance from them. How can I be sure the certificates I am getting are, in fact, legitimate?”

Realistically, most everyone is honest and upfront with insurance certificates, but there continue to be enough cases involving fraudulent insurance certificates that all business owners should be vigilant.

Most insurance agents have systems in place whereby they automatically issue all insurance certificates directly to both the certificate holders and their insured clients. Be wary of anyone who is always sending you their certificate directly, with no insurance agent involved in the communication.

Study each certificate you get closely. With today’s technology, virtually anyone can create all kinds of documents privately on their own. Look for areas where things don’t line up. Match the certificate you receive from subcontractors with one of your own certificates, and check to see if all the borders are in line. Look for different typesets in certain areas of an insurance certificate that may not match up with the typesets in other areas of the insurance-certificate document. If something does not look right, share it with your insurance agent.

Cancelation notification

“I keep insurance certificates on file for all the subcontractors my tree care company contracts for crane services. I assume that, God forbid, if their insurance ever got canceled for any reason, since I am a certificate holder on the insurance certificate, their insurance company will notify us if any of the insurance policies noted on the insurance certificate are canceled for any reason.”

Fast answer, they might.

Under the terms and conditions of most insurance policies, there contain no provisions in the policy wording that, in the event the referenced policy is canceled, that a certificate holder or additional-insured parties will receive notification of the cancelation.

From time to time I have encountered situations where a certificate holder has requested our client’s insurance certificate to include a written statement that all parties to the certificate be guaranteed notification in the event of policy cancelation.  Simply put, and insurance agent has no right or authority to make any such statements on an insurance certificate.

In summary

Streamline your insurance-certificate requests with your insurance agent. Provide complete information on all certificate holders, including full legal names, complete addresses and proper contact information. Also note in your request the nature of the work you are performing for the customer. This way, your agent can issue them quickly and efficiently and perhaps ask additional questions if needed. If your certificate holder (client) also has presented you with a written contract, share the contract immediately with your insurance agent, along with the certificate request. Review the contract with an attorney.

Involve your insurance agent immediately when confronted with complex certificate requests that contain numerous terms and conditions to be noted on the certificate.

Avoid the practice of using “template” certificates and distributing them yourself. Ask your agent to issue all certificates. It is our job, and we are happy to do it for you!

Keep records of all insurance certificates. Keep a separate record of all insurance certificates you obtain from others, such as subcontractors, as well as a record of all certificates issued to your clients on your behalf.

Review insurance certificates you obtain from others, making sure all coverage required is properly noted. Ask your insurance agent to review them as well.

Try to remember what a certificate of insurance is, and what it is not!

Rick Weden is team practice leader of the Tree Care Insurance Specialty Team at Corcoran and Havlin Insurance, a division of Cross Insurance and a 13-year TCIA corporate member company located in Wellesley, Massachusetts. He manages the insurance needs of many tree care operations countrywide, using a wide range of insurance companies, including ArborMax. He has presented at many TCI EXPOs and is a member of the Massachusetts Arborists Association.

This article first appeared in the May 2022 issue of Tree Care Industry Magazine, the official publication of the Tree Care Industry Association. You can view the May 2022 magazine here.

Solving Your Wind Turbine Transport Access Challenges

As one of the most effective and reliable forms of renewable energy, it’s no wonder that wind farms are becoming a more common sight across the country. The average person driving by these towering turbines might wonder how these gigantic machines make it to their destinations.

The short answer is that it isn’t easy — contractors and energy companies have to overcome numerous wind turbine logistics challenges. One of these is transporting wind turbine blades by truck over the highway, which requires specialized equipment and skilled drivers. As challenging as this can be, however, it may be much easier than what comes next. Because these wind farms are in remote locations without paved roads, carrying components for the final leg of the journey can be a task in and of itself. This is where access mats become a crucial element of the planning for such projects.

THE CHALLENGES OF THE LAST MILE

One of the biggest obstacles for wind energy transport is handling the final steps. Not only do trucks need to be able to carry equipment to its permanent location, but heavy machinery such as cranes need stability to install it. Unfortunately, most of these projects must be staged and constructed in some difficult conditions.

The untamed nature of these jobsites means there’s likely unstable or rugged terrain. Whether the ground is too soft, muddy or rocky, it may not be safe or secure to move large-scale machines across it. Attempting to do so might damage vehicles and risk costly delays that can derail progress.

In addition, contractors may need to cross agricultural fields or ecologically sensitive wetlands. The pressure exerted on the ground by treads and tires can cause lasting harm to these areas. If there are no existing access roads across these areas, determining how to get to the site can be a big problem.

USING ACCESS MATS TO SOLVE THE CHALLENGE

Fortunately, there is a solution to these and many other issues related to accessing these types of project locations. Many contractors use hardwood timber access mats to create temporary roadways and staging platforms. That’s because these access mats are relatively easy to install and disassemble. Further, the benefits they provide make them an ideal choice for solving logistical challenges on wind farm projects.

One of the most important advantages of these mats is that they can be used to create a stable surface. This means vehicles can cross challenging terrain without worrying about becoming stuck or damaged by hidden rocks. They also make it possible for trucks and cranes to enter such areas without damaging the ground because they absorb the pressure created by large machinery. The result is fewer delays, lower overall costs, and enhanced safety for crew members.

CHOOSE YAK MAT

As a recognized leader in access solutions with an inventory of more than 1 million products throughout North America, there’s no better place to turn than YAK MAT. We have delivered mats used for a large number of renewable energy projects all over the country.

 

This article is contributed by YAK MAT. YAK MAT is the largest supplier of access mats in North America, specializing in providing access solutions for energy products. Pioneering the industry since 1976, YAK MAT offers clients economies of scale and a variety of ready to ship construction protection mats in close proximity to any project, anywhere in the United States.

Bird On A Wire

Individuals who have worked on or around power lines know that they must work with extreme caution. The risk of dangerous and even fatal electrical shock cannot be taken lightly, which is why crews must wear protective equipment and follow rigid safety guidelines. However, these workers also must have looked at those same lines that they have been trained to regard as a lethal threat and seen a flock of small birds perched on them.

These feathered friends seem to have no trouble sitting on these high-voltage wires than they do the branch of a tree. Why don’t birds get electrocuted on power lines but humans do? The answer lies mostly with the nature of electrical current and partially with birds’ blissful ignorance of the potential danger.

GOING WITH THE FLOW

Simply put, electricity doesn’t go anywhere unless it has a closed loop made of conductive materials with at least two points of differing potential. That means the number of electrons at one point should be lower than the starting place. Electricity seeks to balance that, sending a charge from the point of higher potential to the lower one. The earth itself has a voltage of practically zero. It is almost always the lowest potential. Because the energy tries to get to the ground, anything that gives it a circuit through which it can flow to the earth will become energized. For a living being, that’s bad news.

Birds, however, have found a kind of loophole to this natural law. Because they can fly, they can land on a power line from above, never coming into contact with the ground or anything else as they do. This is crucial, because their feet have the same electrical potential, which means the electrons flowing through the line they’re touching don’t need to make a detour through them.

This protects the feathered creature from receiving a shock. However, if any part of the bird’s body were to come into contact with something that had a different potential, such as the pole, the charge would find a way to the ground and zap it into oblivion.

Humans, on the other hand, are standing on the ground or in a cherry picker when they come into contact with power lines. This means that without the right precautions, they will be in connection with the ground directly or indirectly. Either way, they create a circuit that leads to severe electrocution risk.

PROTECTIVE MEASURES

This is why protective gear such as EPZ grounding grates from YAK MAT are so vital at work sites. Made from all-in-one galvanized steel grates, these create an equipotential zone where they are placed. When standing or walking on them, the electrical potential between any two points on a person’s body is virtually equal. This allows him or her to take advantage of the same basic effect that protects birds that sit on energized lines. Any current that happens to flow into this area will be directed via the grate instead of through the people standing on them.

 

This article is contributed by YAK MAT. YAK MAT is the largest supplier of access mats in North America, specializing in providing access solutions for energy products. Pioneering the industry since 1976, YAK MAT offers clients economies of scale and a variety of ready to ship construction protection mats in close proximity to any project, anywhere in the United States.