When you are searching for animal care insurance most business owners are concerned about general liability, animal bailee, veterinarian expense, and lost key coverage. What many animal service providers don’t consider is product liability insurance coverage. Although most pet-sitting, dog grooming, or pet-walking businesses don’t have a large product liability exposure there may be incidental business practices that could increase exposures you may not be aware of.
We will be reviewing what product liability is, how to recognize if you have product liability exposures and how to protect your business from these exposures.
What is Product Liability Insurance?
Product liability insurance is a coverage that provides bodily injury and property damage protection from products you manufacture, sell, handle, or disposed of. As you are reading this you may think, “I don’t have any products I manufacture”, but you may. Let’s explore this further.
Manufacturing is the process of turning raw materials or combining parts of materials, into a finished product. Let’s look at some examples that may be relevant to the animal care service industry:
- A pet groomer purchases essential oils and adds them to a castile soap to create a shampoo. The groomer has essentially taken parts of materials – essential oils and castile soap – and combined them. This shampoo now becomes the pet groomer’s product creating a product liability exposure. If a pet has a bad reaction to the shampoo the product liability portion of the policy would respond to this claim.
- A pet sitter creates a dog treat using various ingredients – peanut butter, bacon, oats, etc. By creating a dog treat from raw materials like these you have a product liability exposure. If the dog gets sick from the treats, the product liability portion of the policy would respond to this claim.
- A dog walker decides to make their own leash from paracord. If a dog is injured due to the leash you created, the product liability portion of the policy would respond to this claim.
- A pet chew toy is created from a rope and tennis ball. Another example of a product created by combining parts of materials. Your creation becomes your product. Any bodily injury or property damage occurring from this toy would be covered under product liability insurance.
There are other examples of product liability exposures your business assumes even if you do not make any products. Remember that any products manufactured, sold, handled, or disposed of by you are considered “your product”. Think of all the products that you “handle” or “dispose of”, they are not your products, but you can be named in a lawsuit for damages from these products.
For example, you purchase organic pet food from a local vendor at a farmer’s market. The pet ingests the food and becomes ill. The pet owner will look to you for compensation and in turn, you look to the local vendor that sold you the product…. only to find out they are out of business. Your product liability could respond to the claim although it was not a product you personally created or manufactured.
Although your primary business functions may not be producing pet products, the incidental activities – as illustrated above – could expose your business to product liability claims.
How Do I Protect Myself from Product Liability Claims?
If you have purchased a Commercial General Liability (CGL) policy, it probably includes product liability insurance coverage. If you look at your current CGL policy on the declaration page – which is the page that outlines your insurance coverage, coverage dates, etc. – it may show limits like this:
limits of insurance
General Aggregate Limit (Other Than Products-Completed Operations)
$2,000,000
Products/Completed Operations Aggregate Limit
$2,000,000
Personal and Advertising Injury Limit
$1,000,000
Each Occurrence Limit
$1,000,000
Damage to Premises Rented to You Limit
$300,000
Any One Premises
Medical Expense Limit
$5,000
Any One Person
Pet Protection (Animal Bailee) – Animals In Your Care, Custody, or Control
$2,500
Each Occurrence
$5,000
Aggregate Limit
Veterinarian Expense Reimbursement
$1,000
Each Occurrence
$2,500
Aggregate Limit
$500
Deductible
Lost Key Liability Coverage
$2,000
Each Occurrence
$2,000
Aggregate Limit
Within the general liability summary, there is a coverage “Products/Completed Operations Aggregate Limit”. If there is a limit of insurance showing within this coverage line, you most likely have product liability coverage. You can see this indication on our coverage details page. Although the limits may show product liability coverage, we recommend you discuss with an insurance professional if there are any limitations or exclusions on the product liability coverage.
If your current Commercial General Liability (CGL) policy does not provide adequate product liability coverage, you may want to consider a broader CGL policy or purchase a Products-Only Liability policy. These policies provide liability coverage to products that are specifically outlined in the policy.
For example, you manufacture dog treats and have a Product-Only policy listing dog treats as the product insured. Later you add collars to your product line. A pet is injured due to your collar, and you report it to your insurance carrier. Because it was not a “listed product” on the policy the insurance carrier is not obligated to respond to the claim.
Discuss Possible Product Liability Exposures
When reviewing, or looking for, animal care insurance for your business it is important to have an open dialogue with your agent and discuss your current business operations and any future strategies you may be considering. By discussing the possible exposures for your business will allow them to provide and suggest insurance coverages to best suit your needs.
In addition, if you make any changes in your business operations during the year it is essential to tell your agent to make sure that it’s covered and won’t cause any issues on your renewal. There are many times that a business makes a pivot and then causes eligibility issues with its insurance carrier. It is better to know upfront if the business operation changes will cause any insurance issues.
From dog grooming insurance to pooper scoopers, the Pet Care Insurance program has general and product liability solutions for you. For businesses with a brick-and-mortar footprint, or needing additional lines of coverage, our partners at Insurance Canopy can provide other insurance offerings to meet the needs of your business.
For more information about the Pet Care Insurance Program, please call one of our licensed representatives at 844.520.6990.
