Premiums Exploding For Tree Companies Working For PG&E To Cut Trees/Brush Around Power Lines
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Mr. Gomes owns Crossfire Tree & Vegetation, one of many companies that have been contractors for utilities like Pacific Gas & Electric in fire-prevention work. State law makes the utilities liable for fires caused by their equipment, increasing the urgency of trimming trees and maintaining the power grid. But contractors face liability, too, if fires are traced to what they did or failed to do. And that is making it harder to get the insurance needed for the work.
“Every year I go to renew, it’s a huge fight,” Mr. Gomes said. Despite his company’s safety record, “they keep increasing the amount of insurance they want you to have.” Before he first went to work for PG&E after the 2015 Butte Fire, which scorched more than 70,000 acres in the Sierra foothills, Mr. Gomes said it cost around $1,500 to buy $1 million in annual liability coverage. He spent $15,000 last year to secure $5 million in liability coverage then required by PG&E.
In addition to surging premiums, insurance brokers said that some contractors were seeing policies canceled or were unable to secure new coverage. Tree work has always been hard to insure because of hazards like falls from 100-foot trees and the heavy use of chain saws. Now, after several seasons of major wildfires, the risk calculus has changed. “They’re starting to apply wildfire exclusions,” said Milton Smith, a senior vice president at the national insurance brokerage McGriff, Seibels & Williams. And without wildfire coverage, Mr. Smith said, a fire traced to a contractor’s job site can be “a business-ending event.”
At the heart of the insurance anxiety is a provision of the state constitution known as inverse condemnation. That rule holds utilities responsible for fires even if they are not negligent — a doctrine that PG&E has lobbied to change as it contends with tens of billions of dollars in potential claims for fires attributed to its equipment, including the Camp Fire. To work for PG&E, contractors must agree to absorb the liability for any lawsuits over death, injuries or property damage — during or after the fact — in areas where they work.
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https://www.nytimes.com/2019/09/29/business/california-fire-insurance.html