Logging Insurance Michigan Policy Information
Logging Insurance Michigan. Logging is a well-established, time-honored profession; in fact, logging plays a vital role in the economy of the United States.
From the lumber that is used to construct commercial, industrial, and residential properties to the furniture that is used to fill these buildings, businesses and the general public rely on the logging industry for so many of the products they require.
Logging operations cut down trees, strip off leaves and branches, and transport the trunk and larger limbs to a sawmill. Smaller limbs may be transported to a pulp processing plant. Logging includes building access roads to get into the forested area and, in some cases, reforesting the harvested land.
Logging may be done to obtain lumber for construction, manufacturing, or fuel, to clear land for development, or to thin a forest for healthier growth and fire prevention. Logging may occur on owned land, private land or public land.
If on public or private land, permission must be gained prior to beginning operations. Governmental land logging, especially in old growth forests, has met with considerable protests lately.
The possibility of sabotage must be taken into consideration due to potential injury to workers and damage to equipment.
Owning and operating a MI logging operation requires a team of highly skilled professionals, the proper machinery, and good old elbow grease (among numerous other things). Just like any other labor-related industry, there are numerous risks associated with owning and operating a logging business.
In order to protect yourself from these risks, investing in a well-designed logging insurance Michigan policy that provides high-quality coverage that is specifically designed to protect your operation - and the investment in your operation - is essential to your success.
What is insurance so important for loggers? What type of coverage do loggers need? Read on to find the answers to these questions and more.
Logging insurance Michigan protects forestry professionals and loggers from lawsuits with rates as low as $77/mo. Get a fast quote and your certificate of insurance now.
Why Do Loggers Need Insurance?
The very nature of the logging industry is intense, and as such, the labor and the equipment that is needed to keep your business running are exposed to a variety of risks. A piece of equipment could malfunction and injure an employee, or a high-priced tool could stop working and require a costly repair, or it may need to be completely replaced, for example.
Issues could occur during the shipment of your products, or your warehouse or the office you run your operation out of could become damaged in an act of nature. These are just a few of the examples of the issues that you could face as a logger.
As the owner and operator of a MI logging operation, you are liable for any of issues that may occur, and as you can imagine, the costs that are associated with those issues can be exorbitant. For instance, if one of your employees suffers a work-related injury and requires medical care, if a piece of equipment breaks down and has to be repaired or replaced, or if someone files a lawsuit against your logging business, you could be looking at a serious financial issues.
As long as you have the right type of insurance coverage, however, if something goes wrong, instead of paying the related expenses out of your own pocket, your carrier will cover them for you. In other words, insurance can help you avoid serious financial losses.
Moreover, having the right type of logging insurance Michigan coverage is required by MI law. If a logger fails to have the insurance coverage they are required to carry, they could end up facing serious ramifications.
What Type Of Insurance Do Logging Operations Need?
There are numerous types of insurance coverage that loggers will need to carry. Like any other business, the specific type of coverage you'll need depends on several factors; where your operation is located, the size of your business, and the specific services and tools you offer, for example. Because insurance needs for loggers vary, speaking with a reputable and experienced insurance agent is important to ensure you are properly protected. To give you a basic idea of the kinds of coverage you'll need to invest in, here's a look at some of the key types of coverage that most loggers will require.
- Workers' Compensation: In the event that an employee suffers a work-related injury, workers' compensation will cover the cost of any medical care that they may require, as well as compensate them for any wages that may be lost in the event that they are unable to work while recovering.
- Cargo: The timber that's carried to and from the jobsite is highly valuable. If the cargo is damaged or stolen in-transit, cargo insurance would help to compensate you for your losses.
- Equipment Breakdown: The equipment you use to operate your logging business is expensive and experiences a lot of wear and tear. If a piece of machinery breaks down, the cost of repairing or replacing it can be quite costly. With equipment breakdown insurance, your carrier would help to cover the related costs.
- General Liability: In the event that a third party files a lawsuit against you for property damage or personal injuries, a general liability policy will assist you with your legal defense fees, as well as any settlements that you may be required to pay.
These policies are just a few examples of the type of logging insurance Michigan you'll need to carry as the owner and operator of an MI logging operation.
MI Loggers' Risks & Exposures
Premises liability exposure is limited at the office as there are few visitors, but high at clearing and cutting sites. While bodily injury exposure is light due to the lack of public access to remote areas, warnings and markings should be posted to prevent inadvertent trespassing on the job site.
Environmental trespassers may seek altercations at logging sites. Employees should be trained to avoid such personal injury allegations as assault, battery, and wrongful detention.
From a property damage standpoint, fire is a major concern since a forest fire can imperil the rest of the forest, nearby houses, and businesses. Equipment and wood held for transport present attractive nuisance hazards. The premises should be secured and equipment rendered inoperable when the workers leave the site.
Products liability exposure is very low since the cut timber is sold to others to be processed into consumer goods.
Environmental impairment exposure is moderate due to the use and storage of fuels, chemicals, and explosives. Improper use or spillage could result in erosion or contamination of nearby land, air, or water.
Spills must be controlled and equipment monitored at all times. If the logging company owns the harvested land, there should be a well-planned reclamation program to reforest the area and prevent erosion.
Aircraft exposure is high if the logging firm uses helicopters to carry logs from the harvest site to loading areas. Helicopter liability and physical damage are covered by special aircraft policies. Hull coverage covers physical damage to the owned helicopter while aviation liability covers damages to the property of others.
Important considerations include the ownership interests in the helicopter, qualifications of pilots and crew, the radius of operations, the frequency of flights, quality of repair, and maintenance. Additionally, whether the helicopter is rented or subcontracted to others is a consideration.
Unmanned Aerial Vehicles (UAV) (Drones) may be used in operations as well. They are used to measure stockpiles of logs, cut wood, wood chips and sawdust.
Workers compensation exposure is very high, both in frequency and in severity. As operations are often conducted in remote areas, it may be difficult to transport an injured worker to a medical facility to receive prompt treatment.
Falling trees, slips and falls on rugged terrain, cuts, insects, snakes, animals, exposure to weather conditions, and the operation of saws, loggers, heavy equipment, and loading, unloading, and transport of cut timber can result in severe injury or death.
Back injuries, hearing impairment from noise, and foreign objects in the eye are common.
Environmental activists may sabotage trees and logging efforts. There must be a commitment to safety, training, and upkeep of equipment. Adequate protective equipment must be required for employees during clearing and cutting operations.
Contracts and agreements should be carefully reviewed before independent contractors are used and before an accident happens that could result in workers compensation liability for the insured logging firm.
Property exposure consists of an office, area for cut timber prior to transportation, and the yard operations where the logging equipment is kept and repaired. The major fire concern is from refueling and repair operations due to the storage and use of flammable gasoline and other fuels. Any welding or painting must be done away from any flammable liquids.
Poor housekeeping may be a serious fire hazard. Unless disposed of properly, oily rags used to clean machinery can cause a fire without a separate ignition source. Adequate firefighting equipment should be readily available. Explosives kept on premises for use in clearing access roads must be stored separately from combustible materials. These have both a high explosion potential and strong attraction for theft.
If the areas are remote, adequate fire fighting equipment should be readily available. Standing timber is valuable, and attractive to thieves. Fire and wind are the major concerns. There is also the potential for vandalism, especially from conservation activists. Appropriate security measures must be in place including lighting and physical barriers to prevent unauthorized access.
Crime exposure is due to employee dishonesty. Background checks should be conducted prior to hiring any employee. Certain types of wood have a very high value and may be stolen by employees. There should be an inventory of the stand and records kept of cuts.
The job duties of ordering, billing, and disbursements should be kept separate. Annual outside audits should be conducted.
Inland marine exposure is from accounts receivable if the logger offers credit, computers, contractors' equipment, goods in transit, and valuable papers and records for customers' and regulatory information.
Equipment includes logging sledges, skidders, delimbers, and whole tree harvesters used during clearing and cutting. Equipment must be appropriately maintained to prevent overheating, especially during dry conditions. Fire extinguishing equipment should be taken on any job in order to stop a small fire from turning into a major forest fire.
Equipment left at the job site should be secured and rendered inoperable to prevent theft and vandalism. Transporting vehicles may spill or overturn.
Commercial auto exposure is very high due to large, heavy vehicles carrying full loads of logs, which are difficult to tie down and have a tendency to shift under transport. The tie-down procedure is vital.
All employees must be well versed in chaining and securing the load. Collision and overturn may occur, spilling logs onto a public road and preventing access until clean up is completed.
Careful review must be made of overpasses to verify that the load doesn't exceed height limitations. All drivers must have commercial driver's licenses (DGLs) with acceptable MVRs and be experienced in the handling of heavy vehicles. Vehicles must be maintained and the records kept in a central location.
Logging Insurance - The Bottom Line
To find out what kind of logging insurance Michigan coverage you'll need to fully protect your operation, speak with an experienced broker who specializes in commercial insurance for loggers.
Michigan Economic Data And Business Insurance Requirements
Business owners who are interested in establishing operations Michigan must have a thorough understanding of the state's economy. They should also familiarize themselves with any regulations and limits that state may have in place for commercial insurance.
Any entrepreneur who is thinking about starting a business in the Great Lake State first needs to determine if it's a feasible location for business operations. As such, it's important to have a keen understanding of pertinent details regarding the economy of Michigan, in addition to the types of insurance coverage that are mandatory for corporations that operate within the state.
Economic Trends for Businesses In Michigan
After a long period of stagnant job growth in the early part of the 21st century, MI has been experiencing a steady increase in employment gains. Between 2009 and 2018, the state has enjoyed a period of uninterrupted job growth; the longest stretch of job growth since World War II. According to economists at the University of Michigan. While there has been a slight decline in the rate of job growth, job creation continues and forecasters say will continue for the next two years, into 2021.
In 2018, an estimated 55,200 jobs were created; in 2019, it's expected that 35,800 jobs will be created, and in 2020, economists believe that there will be a total of 39,300 jobs created in Michigan. While that rate of growth is 1.9 percent slower than the job growth rate between 2011 and 2016, it is still a steady increase overall. In total, approximate 683,200 jobs will be created in MI between 2099 and 2020; almost four out of the five jobs that were lost during the early part of the 21st century will be recovered.
While the unemployment rate has steadily improved, it is still above the national average. In March of 2019, the national unemployment rate was 3.8 percent, while in the state of Michigan, it was 4.0 percent. Mid-Michigan has experienced the largest growth rate in the state, and according to forecasters, it looks like that trend will continue, moving forward. Industries that are expected to see the most growth include:
- Energy, due largely to research and development in clean energy
- Food and agriculture
- Transportation and mobility
- Healthcare industry
- Information and technology
In the state of MI, business owners are not legally required to carry liability insurance; but most entrepreneurs opt to invest in a General Liability or Business Owner's Policy (BOP). A commercial auto insurance policy is also required for any businesses that use motor vehicles to conduct any aspect of their business operations. Workers' compensation insurance is also required for any businesses with non-owner employees. While the following forms of coverage are not required, depending on the type of business you operate, they are recommended:
- Data breach insurance
- Business income insurance
- Commercial Umbrella insurance
Additional Resources For Miscellaneous Insurance
Find informative articles on miscellaneous businesses including the types of commercial insurance they need, costs and other considerations.
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An insurance contract is an agreement where one party obligates itself to make good the financial loss or damage sustained by a second party when a designated event occurs. The event must be fortuitous and happen by accident. The named insured must have insurable interest at the time of loss. One final point is that in order for any contract to be considered insurance, there must be a risk of loss.
Fortuitous Event - An occurrence largely beyond the control of any involved party; happening by chance; accidental; for example: fire, lightning, windstorm, explosion or flood.
Insurable Interest - In order to recover from a loss to property, the holder must have an insurable interest in the property at the time of the event or occurrence. An insurable interest is any right, title or interest in property where the holder of that right, title or interest sustains financial loss if the property is damaged or destroyed. Any lawful and substantial economic interest in the safety or preservation of the property from loss, destruction or damage also constitutes an insurable interest.
An entity does not have to be the property owner to have an insurable interest in it. Examples include, but are not limited to, mortgagees, trustees, vendors, lessees and bailees. Insurable interest for any entity must exist at the time the loss occurs.
Risk Of Loss - If property could never be destroyed, there is no risk of loss. If property must necessarily disintegrate or be destroyed, there is no risk of loss. Between these two extremes is the exposure of risk that can be insured.
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