What to do when a neighboring tree damages your business property

Kathryn Hawkins

If a neighboring tree damages your business property, is it your neighbor's responsibility to pay for your building's repairs?

That was the question at the heart of a recent North Dakota Supreme Court case, Herring vs. Lisbon Partners. In the case, a chiropractor named Richard Herring sued the neighboring business, Lisbon Partners, for property damage caused by the branches of three elm trees that were hanging over Herring's property. Herring contends the trees caused more than $19,000 worth of damage to his business' roof and structure.

In the decision, the court found that Lisbon Partners could be found liable, although the burden of proof still was on Herring to show the damage was caused by branches scraping the building, rather than by falling leaves for which he couldn't get money). As of late November 2012, the amount of money to be paid by Lisbon Partners hadn't been determined.

Laws for tree damage vary by state, but if a neighboring tree causes damage to your business property, here are five key points you should know.

1. You should buy a commercial property insurance policy to manage your risk.

If you own the building where your business is based, it's a no-brainer to buy property insurance, which will cover damage in situations such as fire, broken pipes and storms -- including fallen trees. However, even if you don't own the building itself, it's still a good idea to buy a renter's insurance policy that covers your inventory, furniture and other possessions so that you're covered in case of a fallen tree or another situation that damages your business property.

2. In most cases, your property and casualty insurance should cover the damage to the structure after the deductible.

If you have liability insurance for your business, the cost to repair a structure damaged by a standing or fallen tree from a neighboring property generally will be covered, assuming your policy includes coverage for the physical structure.

However, you may need to pay a high deductible first, depending on the reason for the damage. The average homeowner's insurance deductible jumped to more than $1,000 in 2012, according to the Insurance Information Institute; commercial properties tend to be larger, and contains more valuable possessions, so policies often cost more. If the tree damage is hurricane-related, many insurance companies require property owners to pay a 5 percent deductible for the damage, which could total $10,000 or more depending on the business' value. Separate flood insurance may be necessary to provide coverage for hurricane- and flood-related damage.

Your insurance policy generally will cover only the cost of damage to the building itself; you will be responsible for the cost of removing fallen trees in your yard unless they block access to the house. Insurance coverage for expensive landscaping must be purchased separately, according to the Insurance Information Institute.

3. Liability depends on whether negligence has occurred.

Does someone else have a responsibility to pay for the tree damage to your house? That depends.

"If it's just a strong wind that blows over the tree, the only party you can hold accountable for the tree damage is Mother Nature," says Carrie Reynolds, a broker with Galvez Insurance in Ohio. "That's what made the tree fall."

In situations such as the one in North Dakota -- where the tree damage is a direct result of a neighbor's failure to maintain a tree that encroaches on a nearby property -- the neighbor may be forced to pay for damage.

"If a neighbor had prior knowledge that a tree was damaged, that's different," Reynolds says. "He had a duty to take any steps necessary to prevent damage. He didn't do it. He's liable."

In such an instance, you still would file a claim with your insurance company to cover the damage, and your insurer would decide whether to sue your neighbor to recover money. However, if your deductible is high or if there are additional costs that your insurance company declines to pay, you may file your own lawsuit -- without your insurance company -- to recover those costs.

4. State laws vary widely.

When it comes to trees that encroach on your property, laws vary widely. In Massachusetts, for instance, you're allowed to trim tree branches that encroach on your property line, but may not touch any part of the tree that resides on your neighbor's lot, and you cannot force your neighbor to remove the tree through any legal means.

In Hawaii, on the other hand, if an overhanging tree causes damage or even the risk of damage to your structure, you have the right to sue your neighbor to force removal of the tree and payment of any related damages.

5. Hire an arborist to document the damage.

If a neighbor refuses to cut back or remove a tree that's damaging your property, hire an arborist before taking any legal measures. The arborist will inspect the tree and write a report, which you can then show to your neighbor to make the case for the tree's removal -- or use as evidence in court if necessary.

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