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An Explanation Of Policy Coverages

At the 2003 Convention in Philadelphia, we came across many sitters that do not understand what the Insurance is covering, so the following is a run down of what is and what isn't covered under the current coverage.

First, What do these Insurance limits mean and what is covered?

On all certificates, you have the following basic general liability limits listed:

$1,000,000 Each Occurrence
$2,000,000 General Aggregate Limit
$1,000,000 Products Completed Operations
$1,000,000 Personal & Advertising Injury
$100,000 Fire Legal Liability
$5,000 Medical Payments
$2,000 Lost Key Endorsement

Let's break it down one limit at a time. $1,000,000 Each Occurrence Limit means you have $1,000,000 for any occurrence (claim/accident) in which you are found to be negligent for bodily injury or property damage of a third party (anyone other than yourself, your employees, and your independent contractors and the clients for whom you do the sitting). An example of what would be covered under this limit: A dog gets away from the pet sitter during a walk, bites a stranger, and the stranger sues. Another example would be the pet sitter leaves the stove on and burns down the house they are sitting in.

The $2,000,000 General Aggregate is simply the total amount of coverage you have for the year. You could have two lawsuits of $1,000,000 under the each occurrence limit scenario above, before you are out of Insurance.

The $1,000,000 Products Completed Operations limit is meant to cover products. In a pet sitters case, their product is a service that they offer (taking care of pets). Thus this limit is really not applicable, because your completed product is not material in nature and can do no bodily injury or property damage after you have completed the job.

The $1,000,000 Personal & Advertising Injury limit is meant to cover personal injury you cause to another person or company via communication. An example, pet sitter A slanders pet sitter B, stating to all their clients that pet sitter B never shows up to do the job and they have wild parties at their client's homes. Pet sitter B sues and can prove all of these statements to be false.

The $100,000 Fire Legal limit covers the sitter for against fire damage they are found to be liable (negligent) for starting to premise they lease/occupy. An example would be a sitter who rents an office to meet new clients at. He/She leaves coffee pot on and burns down the entire office building. Please note this would not cover a home you rent or a house you own, only a space you rent to do business in. Your home needs to have either a Homeowners Insurance Policy or a Renter's Policy.

The $5,000 Medical Payments is a separate limit of liability used to pay small medical claims without tapping into your $1,000,000 per occurrence limit. An example of this would be if a dog you are walking bites a passing stranger as the stranger tries to pet it. Well, in this case, assuming injuries are small (say, a laceration to the hand), the claim would be paid out of the $5,000 medical payments limit. Now if the person bitten then decided to sue for much more money, then the $1,000,000 per occurrence limit would be activated.

The $2,000 Lost Key Coverage simply pays up to $2,000 to re-key customers' locks should the pet sitter lose the keys. Since there is a $100 deductible, this usually applies when a sitter has a number of clients keys on the same key chain, and more than one house needs to be re-keyed.

Care Custody & Control

You will also see a limit for care, custody, and control on your certificate. This limit is perhaps one of the most important limits on our pet sitter policy. This is the limit you have to choose when you take out the coverage. It covers you for property while in your care. The limit can range from $5,000 per occurrence with a $25,000 aggregate to $100,000 per occurrence with a $100,000 aggregate. We recommend taking out the highest limit simply because you never know what types of contents people have in their homes or how much they might cost.

Let me also state for the recond that this is where we have seen the most claims arise since we began administering the Insurance Program. Examples of claims that have occurred and that would be paid under this coverage are as follows:

 
  1. A sitter is informed not to allow a dog to go into a certain area in the house as he may chew things up or use the bathroom. The sitter neglects this duty and the dog chews up carpet or the dog uses the bathroom several times on the Persian rug.
  2. A sitter is writing note to the client, ink runs through paper and ruins a table.
  3. A sitter knocks over an expensive vase or an antique clock while preparing the dog for a walk.
  4. A sitter is told not to take the pet to the park, the pet goes to the park and is subsequently injuried via a snake bite or cuts it's paw on broken glass. This claim would be paid because the pet is considered property in care, and you would be negligent for taking the pet to the park when you are specifically told not to allow the pet to leave the premises.
  5. Pet sitter shuts the door on dog or cats tail, causing injury to pet.

Please note that there are two distinctly different policy forms used. One is for Sole Proprietors only, the other is for everyone else! The primary differences between these two policies are as follows:

 
  1. Under the sole proprietor policy, there is a separate limit ($10,000 per occurrence/$25,000 aggregate) for the pets in your care, custody, and control. Under the standard policy form, pets are included in the same limit that you choose for care, custody, and control for property.
  2. A sole proprietor policy will only afford coverage to the named insured and a spouse, whereas a standard policy will cover the named insured, all employees, and all independent contractors.
  3. If you are incorporated or set up as a limited partnership or a LLC, you do not qualify for the sole proprietor policy. You must be written under a standard policy form.

Optional Coverages

Pet Grooming and Doggy Day Care are two optional coverages endorsements that can be added to the policy and shown on the certificate. Pet Grooming is excluded from coverage unless you opt for it on your application. Please note that this pet grooming endorsement is for Pet Sitters that do pet grooming on the side. The policy is not designed to cover someone who does 100% pet grooming and no sitting. Thus we ask that this be limited to 25% or less of your receipts. A classic example of a claim that would be covered under this coverage would be injuring the animal while cutting the pets nails back or giving a dog a haircut. This type of claim would be paid under the care, custody, and control limit previously discussed.

Doggy Day Cares' have been on the rise and this year we have introduced a day care endorsement. The endorsement to the policy is shown on the certificate and allows for a pet sitter to take in 3 or more pets into their home for daycare or overnight if you complete a supplemental application and are approved by the insurance company. Please note that this daycare endorsement does not cover you if you have a boarding facility/kennel on your premises and you are keeping individual cages. Examples of claims that would be paid under this endorsement would be a dog that has scabies comes over for doggie daycare and by the end of the day six dogs have been infected. Again, this claim would be paid under the care, custody, and control limit discussed earlier.

In closing, I want everyone to know that claim's vary from one to another and it is very important to contact us immediately if you think a situation that might evolve into a claim, so that we can turn it over to the adjuster. The primary ingredient that any adjuster looks for in settling a liability claim is NEGLIGENCE. There are literally thousands of what if's (?) that could and are asked everyday, but if you just remember to ask yourself this question, (Was I negligent in the situation?) I think you will find the answer as to whether your claim would be paid. In the past we have had several claims that have been turned in that pet sitters wanted paid, but they were not truly negligent. Please be aware that the insurance is not going to respond unless you are clearly negligent, so never tell your client or a stranger that your "insurance will take care of it" until you have turned the claim in and been contacted by the adjuster.

I hope this will clear up any confusion any of you may have had about how the policy works. If you have future questions/concerns, please email vip@petsitterinsurance.com, or call us at 1-800-962-4611.

-David Pearsall