Insurance for a pest control business can be a bit tricky. The first thing to consider is that not a lot of insurance companies write policies for this type of business. It is imperative to work with an agency that has access to companies that accommodate this type of risk to avoid being misclassified and having a policy which does not properly cover your business. With this short article I would like to go over the basics so that you as the owner know what to look for and what type of questions to ask.
The five main policies that all Pest Control Operations should have without a doubt include:
–Errors and Omissions
The General Liability policy protects your business from claims of injury, property damage and negligence related to your business activities. This is the only policy that the state requires you to have for your licensing. Ironically, the policy which most of the claims fall under, Errors & Omissions, is not required by the state. This policy protects you from situations when a customer claims they suffered a financial loss because of your professional opinion or just an error you made. For example, your termite inspection found no active termites in the building, but a few months down the road termites were discovered and caused severe damage to the building.
The next policy for your pest control business is Workers’ Compensation. This is the most important coverage for your business if you have employees. Not only is it important because it is required by law to have this policy if your business has employees, but also because if anything happens to your employees while at work, this is the only policy that covers their injuries. According to the Illinois Workers’ Compensation Commissioner website, since 2006 they have collected over $7 million in fines from companies that willfully failed to obtain workers’ compensation insurance. Although this is frightening, it should not be the main reason to have this policy. You should have it in order to protect your employees and yourself from medical costs, rehabilitation, and lost wages. What happens when your tech falls off a ladder and is out of work for 3 months? Having this type of policy can help omit the problem of paying outrageous hospital costs for your employees.
In order to legally drive in the state of Illinois, everyone has to have automobile insurance. The minimum limits required by the state are 25/50/20. This means that the limits are $25,000 per injury or death of one person in an accident, $50,000 for injury or death of more than one person in an accident, and $20,000 for property damage of another person. If you have pickup trucks or excursion vans driving around think how much damage it could cause to a person driving a Ford Fiesta. Do you believe $25,000 would cover their hospital bills? What if you ran into a brand new BMW 7 series? Would that $20,000 for property damage be enough? You do not want to think about these things or about being responsible for paying off the $60,000 difference on the BMW, which is why we highly recommend raising your limits. It’s usually a much smaller price difference than most people think so call us for a quote or ask your agent how much the difference would turn out to be.
Finally, the umbrella policy works the same way on the business side as it does on the personal. This policy provides additional liability coverage above your General Liability, Commercial Auto, and Workers Compensation policies.
Every business owner should know that the purpose of insurance is to protect your assets, but not everyone realizes that simply having an insurance policy is not enough. As painful as it can be to take the time to understand your policies, it would be even more painful to suffer the consequences of not being adequately covered when something unforeseen happens. This is why we highly recommend finding an agent that truly understands your industry’s needs.