What Insurance Do Pest Control Professionals Need?
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Pest control business insurance safeguards exterminators and their businesses from financial losses caused by liability claims filed by customers and from damaged equipment. Certain types of coverage may be mandatory in your state for licensing purposes and meeting other regulations.
What Is Pest Control Insurance?
Pest control insurance is business insurance used to protect exterminators of insects, rodents and other small animals from the financial fallout resulting from liability claims and damages to their equipment. Many pest control insurance packages include a variety of coverages including general and professional liability, commercial auto, environmental liability and commercial property insurance.
How Does It Protect Pest Control Companies?
Pest control insurance provides payouts if a claim is filed, meaning a pest control service business won't have to pay through the nose if a major accident occurs. For instance, insurance would cover medical costs if a customer’s child falls ill due to an insecticide the employee applied along the perimeter of their home. Similarly, if that same employee fell ill due to inhaling the toxins, a workers’ compensation policy would cover their medical treatment and a portion of their lost wages.
Are Pest Control Companies Required To Have Insurance?
Pest control insurance requirements may include general liability insurance for licensing purposes, depending on the state. California, for example, requires potential pest control service people to have $100,000 in bodily injury coverage with $300,000 per occurrence before they can get licensed. They're also required to have $50,000 in property damage coverage.
Finally, consider the fact that 2022 saw about $202,733 in commercial insurance losses. This highlights the point that accidents do happen and that coverage is necessary whether it is required or not.
What Types of Insurance Do I Need for My Pest Control Company?
There are many risks associated with pest control work and we've gathered information on several types of coverage that can be useful to pest control professionals.
Professional liability insurance can protect your business's financial assets if you or an employee makes a mistake while providing a service. We mentioned earlier a child falling ill after a pesticide application used at a residential property. Let’s say the pest control technician used a substance that wasn’t legal in that state, which caused the illness. The negligence portion of your plan would cover your legal costs and possibly the medical expenses of the injured party.
General liability insurance provides coverage for physical injuries, property damage and personal/advertising injuries you directly or indirectly cause. An example would be an exterminator laying down rat traps in a client's home and accidentally knocking over a prized Indonesian vase. Your general liability coverage should pay to replace the item. Meanwhile, your legal costs should be covered if a competitor sues your business for defamation.
Environmental liability insurance, or pollution insurance, covers the business for liability claims involving environmental hazards due to toxic substances. The Centers for Disease (CDC) lists 17 chemicals for dealing with insects, plants and rodents and say you accidentally spilled these toxins into a water supply and poisoned an entire neighborhood. This insurance policy should help cover your legal defense costs if a class-action lawsuit were to be filed against your business.
Commercial property insurance covers the costs of fixing or replacing inventory, furniture and equipment in case of a covered loss, such as fire, vandalism or severe weather. So, if vandals break into your office, destroy your back sprayers and burn your bee suits, your commercial property coverage will pay to either repair or replace your equipment.
Commercial auto insurance provides liability and property coverage for you and your business if one of your company vehicles is involved in an accident. Since pest control companies often use company vans to travel to client sites and to transport their equipment, commercial auto insurance is a must for pest control businesses. In addition, commercial auto coverage is required in most states and forgoing coverage could result in fines and jail time.
Commercial crime insurance offers protection against employee dishonesty, forgery, robbery and computer fraud. So if an employee pockets the cash payment made by a client, you should be covered for that type of petty theft.
Workers' compensation pays for medical expenses and lost wages to an employee who is injured or sick because of their work. Various substances used for mitigating unwelcome critters can cause illness if inhaled or absorbed through the skin. If an employee does get sick because of the various chemicals they handle, any medical treatments and lost income will be paid for.
This coverage is required in most states, though the minimum number of employed workers that would trigger the requirement will vary by state.
Inland marine insurance is designed to cover business property being transported over land in case of an accident. It's the ideal coverage for pest control companies carrying expensive equipment, such as electric foggers, in their work vehicles while on their way to a client's property.
Additional Policies and Endorsements a Pest Control Business Should Consider
Below are several other coverages and endorsements you can add to your policy to bolster your protection.
- Commercial umbrella: Provides additional liability coverage if a high-cost claim exceeds the limits of one of your other liability policies.
- Blanket additional insured: Spreads the power and protection of an insurance policy to a named third party, which is usually required if your business has to employ a subcontractor.
- Blanket waiver of subrogation: This prevents an insurance company from seeking reimbursement from a responsible third party for a claim payout made to you and is sometimes required as a condition of doing business with certain clients and contractors.
- Per project aggregate: Applies your policy’s maximum limit to each project instead of sharing it over the policy term. For example, a $1 million limit on a “per policy” aggregate means you can only be paid up to $1 million over the policy year. Meanwhile, a “per project” aggregate applies that $1 million limit to each individual project, or $4 million aggregate if you have four projects over the policy term.
- Hired and non-owned auto: Provides liability protection for vehicles rented, hired or borrowed by a business and is good if a pest control company doesn't have its own service vehicles.
- Employee benefits liability: Protects employers from errors or oversights in administering their employee benefit programs, such as failing to add a new employee to the company benefits plan.
How Much Pest Control Insurance Coverage Should I Get?
Getting the appropriate pest control insurance coverage amount depends on factors specific to your business. For example, larger businesses that are registered as LLCs with hundreds of employees and a high annual revenue will likely require higher coverage limits and more diverse protection than a one-person small business because they have higher risk exposure.
Think of it this way: A business with 20 workers who serviced two clients in one day means that there were at least 40 opportunities for a motor vehicle accident, workplace injury or professional error to occur.
You can then add other types of coverage based on your business’s risk exposure. For example, umbrella insurance may be a good addition if you deal with commercial clients and have high annual revenue since it will protect you in the event of a catastrophic liability claim that exceeds your other policy’s limits.
How Much Is Pest Control Business Insurance?
Each type of insurance comes with its own cost. For example, a professional liability plan costs $300 to $2,500 annually, while an environmental policy costs $2,500 to $5,000. Adding workers' compensation and commercial auto is another $375 to $1,400 per employee and $750 to $2,500, respectively.
Several factors are used when calculating the cost of insurance for a pest control business, including how many employees you have, your annual revenue, if there are any work vehicles, whether you service residential or commercial clients and the type of coverage you include on your policy. Consider asking an insurance agent or broker knowledgeable about commercial coverage for a price recommendation to point you in the right direction.
How To Get Business Insurance for Your Pest Control Company
Here are the general steps to obtain business insurance for your pest control company, large or small:
- Assess your insurance needs: Evaluate the specific insurance coverage your pest control company requires, including general liability insurance, workers' compensation insurance (if you have employees) and commercial auto insurance (if there's a work vehicle).
- Research insurance providers: Look for insurance companies or brokers specializing in commercial insurance for pest control companies but also get suggestions from fellow business owners.
- Obtain multiple quotes: The easiest and fastest way to do this is by using SmartFinancial and typing in some information about your business, including the number of employees, annual revenue, properties served and any previous claims or incidents. You can get matched with a policy sometimes in minutes.
- Compare coverage: Review the coverage limits, exclusions, deductibles and premiums each insurance provider offers.
- Customize your policy: Make sure to address any unique risks associated with your pest control operations, such as damage caused by pesticide application or pollution liability.
- Purchase the policy: Your coverage will not begin until you've made your first payment. Keep this in mind before you start soliciting clients.
- Maintain and update coverage: Notify your insurance provider of any changes in your operations, staffing or business property to ensure continuous protection.