Logging insurance is a non-negotiable part of any logging operation. Most companies purchase insurance because they fear the financial and reputational consequences of accidents, workplace injuries, and incidents for which they are liable. However, logging companies must also abide by legal and regulatory guidance.
Failure to comply with the logging insurance requirements set forth by state and local governments, as well as business partners for contracts, can mean a loss of business, significant fines, or even loss of the ability to log at all.
Insurance can help address a company’s regulatory needs, and some policies are mandatory for doing business. For companies that do not know where to start, here is a baseline for legal and regulatory compliance within logging insurance.
Compliance Issues With Equipment
Compliance addresses many areas of a logging operation, but one of the most predominant is equipment. Logging companies must follow strict guidelines for operating, storing, and transporting equipment. Some guidelines include:
- Using equipment according to the manufacturer’s instructions
- Selecting equipment that includes safety features specified in the regulatory guidance
Abiding by the state’s legal guidelines for safety protocols when using equipment
Utilizing trained workers who are certified to operate the equipment where applicable
Good logging insurance will assist companies in maintaining compliance in these areas by paying for repairs or replacement of machinery that falls within the regulations. In this way, insurance prevents companies from relying on subpar, non-compliant machinery in order to maintain pace with their expected project timeline when a piece of equipment fails.
Regulatory Requirements for the Environment
Another risk logging companies regularly face is their potential negative environmental impact. From diesel and gasoline spills from heavy machinery to leaking oil due to equipment failure or damage, logging companies can be responsible for significant damage to the natural world.
Regulatory bodies overseeing the environment penalize forestry businesses that fail to maintain adequate protections around their equipment and practices, including pollution spills and overharvesting. Pollution insurance is a central player in this struggle. Logging companies cannot always prevent accidental contamination of the environment, even with best practices.
However, pollution insurance can pay for the cost of remediating the situation and restoring the natural world as much as possible. This keeps forestry businesses from compromising the quality of their cleanup efforts due to financial constraints and brings the company back into compliance.
Legal Mandates for Insurance Coverage
All logging companies must abide by basic insurance regulations dictating the minimum coverage they must carry. These guidelines may vary depending on location, company size, and the type of work the business does. In general, legal and regulatory compliance within logging insurance demands:
- General liability coverage – Logging businesses are required to carry general liability insurance to address the risks they pose to third parties and third-party property. Many companies select one million dollars in coverage. Still, the mandatory minimum will vary depending on location and even the types of equipment used by the company. If an individual suffers injury due to the logging work or their property is damaged in the logging process, general liability coverage can pay the claim and compensate them for the loss or medical bills. Companies that do not have sufficient general liability coverage may face fines and other legal penalties, and they may not be able to secure contracts.
- Workers’ compensation coverage – In an industry with such a high level of risk, workers’ compensation coverage is mandatory. This type of protection covers the medical bills, rehabilitation costs, and other expenses associated with an injury or illness that affects a logging worker. Should the worker pass away as a result of the incident, their family can be compensated for their loss and the cost of the funeral. The amount of workers’ compensation insurance is necessary, depending on the municipality.
- Umbrella insurance – While not necessarily mandatory, many logging companies utilize umbrella insurance to help them achieve compliance. If a company is unable to secure a general liability insurance policy that sufficiently meets the regulatory minimums, or if they simply want more coverage, an umbrella insurance policy can expand their coverage options to allow for more protection.
Trust Burton & Company to Keep You in Compliance
Logging businesses must abide by numerous rules and regulations, from how they operate to what types of machinery they use and even what insurance coverage they carry. Suppose you are unsure whether your company is properly complying with legal regulations. In that case, working with insurance professionals familiar with your industry can be helpful.
The team at Burton & Company works closely with businesses in the forestry industry to make sure they carry the coverage necessary to protect their business from financial harm and remain in compliance. Contact Burton & Company for a personalized quote.
