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Logging operations are not normally restricted to owned premises. Most loggers operate on city, state, or federal public lands, or on privately owned lands. All cutting must be approved in advance and is subject to either verbal or written contracts. Most logging takes place in out-of-the-way locations. This increases the workers compensation severity exposure because of potential delays between the time the injury takes place and when the injured worker receives medical care. Remote locations also increase auto exposures due to large, heavy logging trucks maneuvering over narrow, winding and steep roads. Another significant exposure is contractors' equipment used in these remote areas. Certain equipment, such as skidders, is bulky and can overheat. Overheating not only damages equipment but can also ignite forest fires.
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Here is a possible scenario:
Jake and his daughter Sally are logging a tract within contract terms at the edge of a national forest but inadvertently bring their skidder over private property. Two of the trees they fell are privately owned. While moving the logs to the truck, the skidder is badly damaged when it overheats, and it ignites a fire on the privately owned land. Emergency crews arrive to fight the fire but at least 50 trees are damaged to some extent before the blaze is extinguished. In addition, Sally suffers severe smoke inhalation and must be evacuated by helicopter to a hospital 50 miles away.
Jake is responsible for the two trees he erroneously cut and removed, the damage to the 50 or more damaged or destroyed trees, and his damaged skidder. He is also responsible for his daughter's care due to her work-related injuries. |
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A number of admitted carriers write coverage for the logging industry. Joe Davis, program manager with Britt/Paulk Insurance Underwriters, says that they write with several “A” rated carriers. Marie Bernier, senior vice president at Victor O. Schinnerer, explains that their forestry program is written only with Chartis.
Scott Sackers, commercial underwriter at Roush Insurance Services, Inc., places business primarily with non-admitted companies including Atlantic Casualty Insurance Company, Century Surety Insurance Company, and Markel.
Eddie Daigle, Jr., president of Daigle & Associates, Inc., says his firm provides only equipment coverage and places it with Argonaut.
There are numerous potential logging customers, even for limited coverage lines. Mr. Daigle says, “We've been writing loggers equipment coverage since 1974 through local independent agents around the country.”
Mr. Sackers identifies Roush’s potential customers as “loggers, axe men/women, and anyone involved in logging operations (sawmills, landscapers, etc.).”
According to Mr. Davis of Britt/Paulk, “Our coverage is intended for timber harvesting accounts. We sell primarily to logging/lumbering companies that cut and haul timber to sawmills, pulp mills and timber yards.” Ms. Bernier identifies Schinnerer’s target markets as “operations that involve logging, log road construction, reforestation, sawmills, and the hauling of logs and chips.”
Mr. Davis also explained, “Workers compensation presents the greatest frequency of loss, followed by equipment, automobile, motor truck cargo and general liability.” Ms. Bernier says that the auto line experiences frequency and severity.. She explains, “Loggers utilize heavy trucks/tractors to haul logs, and the hazard is increased in areas where the road is narrow, steep or winding. That is why many carriers will not write monoline auto for logging operations; they want the other lines to support it.”
The biggest equipment exposure in the south and west, according to Mr. Daigle, is fire. Mr. Sackers identifies theft, vandalism and fire as the most common causes of losses for this class. He also comments that “Improper supervision of skidders and other logging equipment when engines are shut down and proper cool off procedures are not followed poses a fire hazard to surrounding wooded areas.”
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