Premium

Your insurance premium is the total cost of your coverage for a given policy period. For tree service companies, premium is driven by several key rating factors: total payroll (for workers' comp and GL), annual revenue or receipts (for GL), number and type of vehicles (for commercial auto), equipment values (for inland marine), and your claims history and EMR.

A mid-sized tree service with five trucks, ten employees, and $1.2 million in revenue might pay $60,000-$120,000 per year across all lines of coverage, with workers' compensation often being the single largest line item. Premiums vary widely by state, urban vs. rural operation, the types of work performed (pruning vs. crane removals), and whether you are in the admitted or E&S market.

Most tree service policies are subject to audit, meaning the initial premium you pay is an estimate based on projected payroll and revenue. At the end of the policy period, the carrier audits your actual numbers. If your payroll or revenue came in higher than projected, you owe additional premium. If it came in lower, you receive a return premium. Budget for this audit adjustment — it surprises many business owners.

To manage premiums effectively: maintain a clean loss history, invest in safety training and equipment, properly classify your payroll across NCCI codes, and work with an agent who specializes in contractor or tree service insurance. Agents with volume in this niche often have access to preferred programs with better rates.