Subrogation

Subrogation is your insurance carrier stepping into your shoes to recover money from the responsible party after paying your claim. If a utility company's negligent line maintenance causes a tree to fall on your bucket truck and your carrier pays $80,000 to repair it, your carrier can then pursue the utility company to recover that $80,000. The carrier is "subrogated" to your rights — meaning they can bring the same legal claim you could have brought.

For tree service companies, subrogation most commonly arises in auto claims and property damage scenarios. If another driver causes an accident with your work truck, your carrier pays your claim (assuming you have collision or comprehensive coverage) and then pursues the at-fault driver's insurance for reimbursement. If subrogation is successful, you may also recover your deductible.

The flip side matters too: you can be the target of subrogation. If your crew damages a client's property and the client's homeowner's insurance pays the claim, that homeowner's carrier will subrogate against your GL policy. This is why maintaining adequate GL limits is essential — subrogation claims from other carriers can be aggressive and well-funded.

Waiver of subrogation endorsements, which are common in tree service contracts, complicate the picture. When you grant a waiver of subrogation to a client, you are telling your carrier that it cannot pursue that client to recover claim payments, even if the client was partially at fault. Your carrier charges a small premium for this endorsement because it gives up a potential recovery right. Understand that every waiver of subrogation you grant reduces your carrier's ability to recoup losses, which can indirectly affect your loss history and future premiums.