Deductible

A deductible is your share of every covered loss. If you carry a $1,000 deductible on your general liability policy and a homeowner files a $25,000 property damage claim after your crew drops a limb on their fence, you pay the first $1,000 and the carrier pays the remaining $24,000.

For tree service companies, deductible selection is a balancing act between cash flow and premium savings. Deductibles on GL policies commonly range from $500 to $5,000. On commercial auto, deductibles for collision and comprehensive are typically $500 to $2,500. Inland marine policies covering your chippers, stump grinders, and saws may carry deductibles from $250 to $1,000 per item.

Raising your deductible is one of the easiest ways to lower your premium. Moving from a $1,000 to a $2,500 deductible on GL might save 5-10% on your annual premium. But be honest about your financial position: if your company could not comfortably write a $2,500 check on short notice for each of two or three claims in the same month, keep the deductible lower.

One important distinction: on workers' compensation policies, you typically do not have a traditional deductible (benefits must be paid from the first dollar by law). However, some large-deductible workers' comp programs exist for bigger operations where the employer reimburses the carrier for losses up to a certain threshold. These are structured risk-sharing arrangements, not standard deductibles.