Insurance 101: Dog Ownership and Personal Liability Exposure

The nature and behavior of dogs is something that can not be easily underwritten. The breeding, exposure and care for an animal is crucial to the behavioral tendencies to be aggressive, passive, or otherwise docile. What may be a healthy, happy dog with its owner could be stressed and act differently with a stranger or in a stressful situation.

 In Pennsylvania last month, an employee filed a lawsuit against Home Depot and her supervisors alleging the defendants failed to maintain a safe work environment after she was bit by a dog brought in by a customer. Earlier this month, a toddler in North Carolina was hospitalized after he was bit by a dog. Another recent attack by a dog in Canada resulted in the tragic death of a 50-year-old woman and hospitalized a toddler.

 These incidents are among the latest examples that show how frequently dog attacks occur. Many of these cases are handled through the court system, leaving liable parties subject to thousands in fees and damages. With 4.7 million dog bites annually in the United States and 800,000 resulting in medical care, homeowners who own dogs should be aware of potential lawsuits if their dog injures someone. Dog bites and related injuries account for approximately one-third of all Homeowners Insurance Liability claims and totaled nearly $700 million in 2017. The average award for a personal injury lawsuit is $789,784.

 Dog bites and the associated costs, such as physical damages and liabilities, are covered by a Personal Liability policy, which comes along with Homeowners or Renters Insurance programs. Policyholders would be wise to make sure their Homeowners policy is not restricted to just their own property (premises only coverage).

 In addition, many Homeowners policies have a limited appetite, which excludes certain breeds. The list of breed restrictions will vary from one carrier to another therefore owners should speak with their insurance brokers or agents to ensure they have the proper coverage. Typically, a restriction will not provide coverage for any “bodily injury” or “property damage” caused by attack dogs, non-domesticated dogs or guard dogs. Breeds such as Rottweilers, Doberman Pinschers, Akitas, Bullmastiffs, Wolf Hybrids, Chow Chows and Pit Bulls and any animal with a biting history could fall outside of a carrier’s appetite. There are other exotic animals that may make obtaining standard coverage difficult as well.

Risk management procedures matter

Trends that we are seeing in the growth of dog bites:

 ·        Dog parks and pet boarding facilities

·        Bringing pets to work

·        Taking pets into public stores and businesses

·        Traveling with service animals on public transportation

 At home, family members should all be aware of how to manage their dogs when guests visit. Electric fences and gates should be considered.

Carriers will look favorably on any commercial or personal policyholder who is actively taking steps to reduce the likelihood of a dog bite on their property.

Posting signs about the presence of a dog at home or the workplace is important but will not prevent all tragedies. Keeping dogs in an area away from the public or guests is also advised whether at home or the office. The key is to avoid risks as much as possible and be transparent with anyone that may be on the grounds where dogs may be located.

Taking specific precautions around children is critical, she said. A dog that bites a child will result in the largest claims, and dogs tend to be more anxious around children. Some children tend to be less wary of dogs compared to adults, so the risk is higher in many ways.

A dog bite claim can be costly

Being transparent with both your insurance broker and your friends and family members about the presence of one or more dogs can help you determine the amount of coverage needed.

For example, if your carrier is not aware that you have one or more dogs onsite and a dog bite claim is filed at home or work, the severity of an injury could lead to coverage being denied, or your policy to be non-renewed after the claim is paid. Following a dog bite claim, a Homeowners or Personal Liability policy may only be available on the specialty market, which could cost more in premiums or provide more limited coverage.

If a claim is filed, the carrier will want to find out more about the breed of the dog involved to see if it is on an exclusion list. If the insurer was unaware of a dog or if it is found that you lied on a past application, prepare to pay for injuries out of pocket.

Umbrella policies

Homeowners can purchase a Personal Umbrella policy to cover liabilities above the limits on their core Liability policy. Umbrella policies are advisable for homeowners with valuable personal assets, but if a Homeowners policy is denied coverage for any reason, an Umbrella policy generally will be denied as well. An Umbrella could help to fund the costs of a severe dog bite that results in a serious, long-term injury or an accidental death.

Seemingly inane dog bite settlements can reach in the tens of thousands of dollars in some instances. Illinois set a record for the largest dog bite settlement in state history at $1.1 million in 2013. 

It is important to discuss your animals with your insurance agent. If there is an animal issue on your home or personal liability policy, steps can be made to prevent policy cancellation, non-renewal or excluded coverage. Not every insurance company has restrictions on breeds, so proactive discussion with your agent is key to provide ongoing protection of your family, pet, and also your assets.

  We can help.

Jason M. Pond, CPRIA

Personal Risk Management

972-715-8703 – Direct  /  972-387-3808 – Fax  /  972-342-8645 – 24 Hour Mobile

[email protected]   www.swinglecollins.com