Professional vs Hobbyist - Are YOU Insured and Can You Explain Your Pet Business Insurance?
As the Pet Sitting world evolves, there seem to be more and more people coming into the field looking to make a quick buck, without realizing the importance of covering all their exposures if something were to go wrong. It's amazing to me how online registries advertise to pet owners and pet care providers that they offer Premium Insurance using terms such as Peace of Mind and Exceptional Insurance Coverage, yet when you read the fine print there appears to be a lot of gaps. Is anyone reading the fine print on these sites or obtaining a copy of the actual policy—pet care providers or pet owners? Granted, the fine print isn't always easy to decipher...but with lives, homes, and treasured possessions at stake one would think definitive explanations about exposures and coverages would be a must for all involved! As a professionally operating pet-sitting service, you have taken the important step of obtaining quality business insurance. This distinguishes you from the hobbyist pet sitter who either doesn't carry it or takes someone's word that they are insured—but if asked by a pet owner, could you explain what you have in place to protect them—and your business—if the question is posed?
Let's examine the different coverage all Professional Pet Sitters should maintain to be adequately covered, and where most hobbyists seem to fall short on coverage.
General Liability Insurance
General Liability Insurance covers your business for Bodily Injury (BI) and Property Damage (PD) arising out of your negligence. An example of a BI claim would be if a dog in your care were to bite a pedestrian while on a walk. An example of PD claim would be if the client's dog you are walking suddenly attacks a pedestrian's dog while on a walk, and the pedestrian's dog sustains an injury.
Under a standard unendorsed General Liability policy, personal property (including pets) in your care, custody, and control is excluded entirely. In addition, many General Liability policies on the market today designed for pet sitters contain a number of limitations. In reading the fine print on one of the online registries I noticed they exclude meet and greets, costs for property or liability damages caused by a pet, and costs incurred more than 30 days following an incident, including long term care as a result of an injury. All of these limitations should be, and are included under the PSI Liability policy.
Since a pet sitter's primary responsibility is to take care of pets in their client's homes, a standard unendorsed General Liability policy is not sufficient to properly cover a pet sitter. Nor is one with limitations for pet injuries or damages caused by a pet in your care. Be certain you purchase a General Liability policy with an endorsement that adds coverage for personal property in your care, custody, and control (CCC) and includes vet medical expenses up to that limit, otherwise you may be coming out of pocket at claim time.
Just this past June, Georgia's Supreme Court ruled that when a pet is injured or killed by someone else's negligence, the owners may also collect costs incurred trying to save the animal. That suit is for $67,000 in vet expenses that were incurred by the pet owner for well over 30 days (the dog, unfortunately, passed away 9 months after the caregiver gave the dog arthritis medication by mistake). Some insurers may cover this claim under a professional liability form, but what about those claims where the sitter is not negligent, such as a dog that runs into the street and is hit by a car, or a pet that ingests something while on a walk (doubtful this would be covered under any professional liability policy as there is no clear error or negligence on part of the sitter). I'm sure most Professionals would want to be certain they are covered for all these scenarios.
The good news is that PSI Professionals covered under the PSI Liability policy have the option of choosing the amount of CCC coverage that is right for their business (limits range from $10,000-$200,000). As noted in the previous paragraph we are seeing more and more claims where vet medical claims exceed $10,000 and even $20,000. Based on recent court rulings as well as increased vet medical expenses, these claim costs are likely to only increase. There are no limitations for non-negligent claims under the PSI Liability policy and the policy has no time limit for payment of ongoing vet bills when surgeries are performed and physical therapy/follow-ups are needed (long-term care). So please be sure to choose the limit that adequately protects your business.
In addition, the CCC limit also covers the contents of the client's home. If you are taking care of pets in really nice homes/contents, $10,000 likely is not enough coverage to cover damage to furnishings/personal property, should you accidentally forget to lock the crate (and the client puppy gets to chewing), or if you leave the water on upstairs and the ceiling comes crashing down on the furnishings below. Or the unimaginable, you leave a heat lamp on the floor and a fire that burns the home and all its contents! In this scenario, the house is covered under the $1,000,000 basic liability limit, but the contents are limited to the limit chosen for CCC.
Last, it is extremely important to note that a General Liability policy does not cover injuries to you, your employees or your independent contractors. To cover this exposure, please read below regarding workers' compensation.
Workers Compensation Insurance
Have you or your employee(s) or independent contractor(s) ever been injured while pet-sitting? If so, then you are aware of the need for protecting your business via workers' compensation insurance coverage. And if not, consider yourself fortunate.
Workers Compensation Insurance provides coverage for you and/or your employees if you are injured on the job by accident (dog bite, slip and fall, etc, etc) or occupational disease (carpel tunnel, rabies, etc.). The policy will pay for medical bills and if you/your employee are unable to work for an extended period of time (typically over 7 days), it will cover your lost wages/disability. Workers' compensation is the exclusive remedy for covering injuries on the job (including Pet Sitting or Boarding jobs) to you and your employees.
Most hobbyists likely do not realize when they put themselves on a website to advertise to board or sit for a client's pet, that they nor their family members are covered for dog bites they may incur from a client's dog or other injuries that occur while taking care of pets. I'd be willing to bet most of the pet owners don't realize the exposure either, and that they may potentially be sued for the sitter's injuries. Over the years I have been told by sitters that the client's homeowners insurance will cover them for injuries to them, their employees, or IC's. They fail to realize that all though they may receive some medical expenses from the client's homeowner's policy, they may also have to prove negligence on behalf of the homeowner or homeowners pet, which could literally take years. What does that sitter plan to do during that time when they can not work due to their injuries and medical bills piling up? And what if the client has no homeowners or renters policy at all?
And if you are injured by your client's pet, or slip and fall in their home, and then sue them for your injuries/disability, isn't that going against the initial assurance that their home and pets are going to be well taken care of? And how many sitters making this argument are actually taking the time to explain to their prospective clients the exposure? I believe most pet-sitting clients would not want to hire a sitter if they were aware that the sitter did not have adequate protection in place, and that they could be held liable for injuries. Professional Pet Sitters are aware of this risk to their business and obtain workers' compensation insurance. Hobbyists learn the hard way!
Bonding
Most Professional Pet Sitters know a standard dishonesty bond protects you and your clients from loss as a result of theft committed by your employees. They also know that a Bond is not insurance, but rather an agreement that if their employees steal from their clients, the Bonding company will reimburse the client for the loss and look to the guilty sitter to recoup that loss, How about the clients of hobbyists? Are they aware that someone they just met on a website or their neighbor's teenage daughter could potentially take their treasured possessions with no recourse? A homeowners insurance policy is not likely to cover a theft claim when you give the person a key to the home!
Not only is bonding important for all contractors you allow into your home, it is also important to note that all employee dishonesty bonds are not created equal, so be sure to review the definition of employee and what is required for the bond company to pay out. Under the PSI Bond, the definition of employee includes all owners and officers, full and part-time employees, independent contractors, and volunteers. And in lieu of a conviction clause, the policy simply requires a burden of proof which could simply be an admission of guilt by you or your employee. This can make a big difference in whether you must wait for courts to act and find someone guilty or be reimbursed in a timely fashion.
Even if you have no employees or IC's and know 100% that you would never steal from your client, it is still important to consider carrying a bond and consider it from the client's perspective (if they understand that most insurance policies will not cover theft by the sitter). If you interviewed prospective clients in the market for a sitter I believe you will find that the large majority would prefer to hire a pet sitter that is insured and bonded, if they know what is at stake.