Most Tree Care business owners focus on one number when it comes to insurance: the premium. They want to know what they’re paying each year and how to lower it—whether that’s by switching carriers, raising deductibles, or trimming coverage. But if premium is the only number you’re watching, you’re only seeing part of the picture. That narrow view could be quietly draining tens or even hundreds of thousands of dollars from your business every year.
There’s a smarter way to approach insurance—one that looks beyond the policy and focuses on the true cost of risk across your entire operation. That approach is called Total Cost of Risk, or TCOR.
TCOR is the full financial impact of risk on your business, not just what you pay your insurance company. It includes your premiums, of course, but also deductibles, out-of-pocket claims, uninsured losses, legal and compliance costs, safety program investments, equipment downtime, lost productivity, and even reputational damage after an accident. In other words, TCOR is the real cost of operating in a high-risk industry—and the cost of failing to manage that risk proactively.
This is especially important in tree care, one of the most dangerous industries in the U.S. With chainsaws, aerial lifts, heavy equipment, traffic exposure, and electrical hazards, risk is constant. But while every Tree Care company faces the same general hazards, not every company manages them the same way—and that’s where TCOR becomes a competitive differentiator.
Imagine two companies with identical insurance premiums. One regularly deals with claims, injuries, equipment breakdowns, and OSHA violations. The other invests in safety, training, and strong claims management processes. Same premium, completely different outcomes. One is bleeding profit; the other is gaining efficiency and building a reputation for reliability.
Reducing TCOR isn’t about cutting corners—it’s about making informed, strategic investments that protect your bottom line. To start, you need to understand the four key components of TCOR.
The first is Insurance Premiums, the most obvious cost, but just the beginning. Tree Care companies often carry General Liability, Workers’ Comp, Auto, Inland Marine, and Umbrella policies. Your premium is affected by your claims history, safety practices, and how your employees are classified. But even with a well-priced policy, a lack of proper coverage or a history of frequent claims can drive long-term costs way up.
The second component is Retained Costs, the losses you absorb before insurance kicks in, or that aren’t covered at all. This includes deductibles on liability or auto claims, out-of-pocket repairs, OSHA fines, and rework caused by jobsite damage. It also includes the financial risk of working with uninsured or underinsured subcontractors. These hidden costs can quickly pile up—and often outweigh the savings you thought you were getting on your premium.
Next is Loss Control and Safety Investments, your proactive efforts to reduce risk. Think PPE, driver safety training, DOT compliance, jobsite hazard assessments, drug testing, and maintaining your equipment. These aren’t just “expenses”—they’re risk control tools that reduce claim frequency and severity, protect your team, and often lead to better insurance terms. Companies that prioritize safety tend to finish jobs faster, with fewer accidents, and maintain higher employee morale.
The final component is Administrative Costs, the internal and indirect costs of managing risk and insurance. This includes time your staff spend handling claims, preparing for audits, filing OSHA logs, navigating renewals, and retraining new or current employees to fill the role of an injured worker. Add in the productivity lost from job delays, HR managing return-to-work programs, and any legal hours tied to disputes or injuries, and you’ll find that poor internal systems can quietly eat into your profit margin.
The bottom line: insurance shouldn’t just be about price, it should be a tool for building a stronger, more profitable business while offering the proper risk protection for your organization. When you start viewing your risk through the lens of TCOR, you can cut unnecessary costs, strengthen operations, and make smarter long-term decisions.
Example: Total Cost of Risk (TCOR) – Tree Care Company
Based on the information provided above, the below example illustrates a hypothetical scenario of how a company with a $145,000 premium might actually be spending over $260,000 annually on risk-related costs—$115,000 more than what’s showing up on their insurance bill.
One of the most impactful moves you can make for your organization is partnering with a trusted insurance advisor who can help reduce your Total Cost of Risk. To learn more, reach out to Greg Johnston at .
