Month: July 2016

Pest Control Companies: Beware of the mosquito

What liability risks are out there and what you can do to manage them

Pest control is a vast multi-faceted and highly regulated global business offering various types of services to control pests of all types to numerous industries and the public   Pest control business liability classification codes are:

Pest Control

Pest control involves eradication or abatement of all types of pests, insects and rodents but none more evasive and resilient than the mosquito. In the United States Pest control companies often provide residential pest control options for mosquitoes and other insects both to individual homeowner’s, apartment complexes and other types of residential buildings as well as temporary lodging such as resorts and hotels    Municipalities, townships, counties, water districts, states, countries and community based programs also undertake the eradication of mosquitoes, especially when there is a disease outbreak.  Commercial pest control companies often subcontract with these entities to perform the actual pesticide application, monitor the mosquito population, train applicators and monitor certifications and licensure of employees/applicators.

The reason so much attention is given to eliminating this one insect; is the danger to human life, along with wildlife, associated with Vector borne diseases transmitted by mosquitoes after extrinsic incubation, e.g. Malaria, Yellow fever, West Nile Virus, Chikungunya and Dengue fever. The National Resources Defense Council indicates that these diseases are increasing as the insect population grows, due to the warming of the climate, along with the shifting rain and weather patterns. As a result,     Additionally, another growing threat from the mosquito is on the horizon.

As the 2016 Olympics get under way the public,  the business sector, medical professionals, human health organizations, environmental and government agencies and the pest control industry are warily eyeing the event as the Journal of America Medical Association states the potential for a pandemic is explosive due to the presence of the Zika virus, which is an emerging illness borne by mosquitoes, in the Olympics host county of Brazil.

Some states in the United State have already experienced cases of Zika. Most notably there have been cases reported in 15 counties in Florida and as consequence new laws have been enacted which impose even greater regulation for pest control company applicators. Other states as well may follow suit as the disease spreads.

In this case, the infected female Aedes genus mosquito is the carrier  Zika Vector Control for the Urban Pest Management Industry). This particular mosquito type is an invasive species which is already established in America and by its nature continues to expand its range.  It carries Zika virus, dengue fever and a possible link to microcephaly in infants.  Additionally, is has been recently confirmed that an infected human male can sexually transmit the Zika virus to a female similar to AIDS while the virus is active.  Zika is also possibly linked to  severe brain damage and Gullian Barre’Syndrome.

A debate now rages among the scientific community as to whether or not microcephaly is associated with the Zika virus; or its actual root cause is a larvacide (growth inhibitor)  called “pyriproxyfen” used for mosquito control by targeting the larval stage while in the water source. In Brazil, it was allegedly injected into  by the Brazilian Health Ministry  into the drinking water tanks to combat the mosquito population. See: “Chemical Larvacide, not Zika, true cause of Brazil’s Microcephaly Outbreak.” This larvacide is approved in the US by the EPA and worldwide by WHO

Either way the pest control industry will be squarely in the middle of the debate on how to effectively reduce the mosquito population using Integrated Pest Management with  Biological Based Technology  and still prevent harm to humans in response to the concerns raised about this disease in the National Pest Management Association Industry wide alert issued in January, 2016. Irregardless of which cause is the culprit it will have far reaching implications for insurance coverage for the the pest control industry.

Liability claims may rise in the form of general liability, professional liability and products liability as the number of victim’s increases and public alarm rises.  Additionally, many local government mosquito abatement programs are being dropped by insurance carriers at a time when they are sorely  General liability covers bodily injury due to your negligence (which is a failure to exercise reasonable care).  Bodily injury means injury, sickness, disease or death.  It is quite conceivable that a client that acquired Zika or other vector borne diseases could bring a negligence suit against a Pest control company, who failed to provide effective mosquito control for their residence, barring another possible source of contamination,  dies or is injured, or their unborn child is borne with birth defects, caused by the disease or from the products used to abate this pest.

The Supreme Court of California widened the legal playing field when it held that pesticide application may not be excluded summarily under the pollution exclusions clause of an insurance policy without a thorough analysis of the facts and can be ordinary negligence performed in the general course of doing business in John R. MacKinnon vs. Truck Insurance Exchange (2003). As a result varying coverage has evolved for pest control companies.

These coverage may have different names but can be added as a supplement or rider to most general liability and business owner’s packages or can be obtained as special risk insurance specific to the industry including but not limited to mosquito abatement, fumigation, exterminator, pollution care custody and control, Crisis management endorsement and last but not least chemical liability. With the advent of new diseases and chemical compounds to address them Pest control companies must become or remain pro active to combat the negative impact caused by just one list insect.

The key factor is to review your company’s general liability policy or business owner’s package and be sure the wording covers pesticide application and mosquito control in the ordinary course of business and to make sure that specifically named diseases and/or vector borne illnesses are not excluded; or if excluded, purchase a rider, a supplement or special risk insurance policy. Also consider raising the aggregate amount on your general liability.  You also need to make sure that if you are utilizing Biology Based  Technology and larvae based pesticides (even if approved by the EPA) used on or near a water sources are covered, and obtain specific coverage and products liability for those products where there is either a known or potential risk for those pesticides and chemical  degradation residue even if the product is approved for use under the Federal Insecticide Fungicide and Rodenticide Act and the EPA.

Products liability is necessary if you are selling  a product or dispersing it into commerce.  Professional liability is necessary if you are recommending products for  use as part of your business or selling them to clients separately. It would be fiscally prudent to have liability for any known or emerging vector borne disease spelled out, if obtainable; but you primarily want to make sure they are not excluded under your policy.

If it is proven, that the chemical pyriproxyfen used in larvae applications is the cause of microcephaly, rather than the Zika virus, then there is sure to be tort cases similar to those brought regarding the Thalidomide tragedy. (Disturbingly, Monsanto is either the parent company or a partner with Sumitomo which makes  this chemical. Monsanto is the maker of  Agent Orange, 24-D and Roundup).  If you are recommending the use of larvae applications, and use or sell this  particular chemical or any type of application that causes an environmental risk due to the degradation  of chemicals in your pest control business it is vital that you have environmental coverage as well.

As the world population rises and various new diseases emerge and new chemical compounds and pesticides are developed to eliminate the pests and thus combat the diseases the risk increase proportionally for a pest control company.  Excellent comprehensive insurance packages are  your best protection.

Business Liability: Artisan Contractors

SIC Business Insurance Codes:

  • 7342 Disinfecting and Pest Control services
  • 2879 Pesticides and Chemicals-Not classified Elsewhere

NAICS Liability Classifications:

  • 561710 Exterminating and Pest Control Services
  • 325320 Pesticide and Agricultural Manufacturing

Business ISO General Liability:

  • Code 43860 Fumigators
  • Code 43470 Pest Control Services

Tree House Builders Insurance: What type of insurance do you need?

 Treehouses:  Where Dreams come true for the home owner if the builder can withstand the force of the wind through the trees

 

Treehouses have existed in many areas of the world for thousands of years.  Now treehouse building in America is going through a renaissance period. Many famous people in America have had  treehouses built for them, including George Lucas (both for Star Wars and personally), John Lennon and Florida Georgia Line to name but a few. This surge in interest is partially due to the popularity of  movies such as Peter Pan and Swiss Family Robinson, and TV programs featuring deluxe treehouses designed to meet the homeowners desires for example “Treehouse Masters”: which is shown on Animal Planet featuring Pete Nelson.  There are many other fabulous treehouse builders, as well as a proliferation of  books, plans and photos  of  these whimsical  and awe inspiring dwellings on the World Wide Web. Also home buying clientele is interested in smaller less expensive dwellings in order to have a more active lifestyle which is a need that can be met by living in a tree house.

So with the public’s fascination for these dwellings rising, if you’re in the residential construction industry you may have thought of going out on a limb and adding treehouse building to your services.

No matter what your reason is for building treehouses you need to consider two primary intertwining factors, to wit: the building process and insurance. Building a residential treehouse is basically the same process as building a home as a general contractor with a need for specialized  subcontractors and tradesman. You can read more about general contractors insurance needs here.

(Building commercially rented treehouses is beyond the scope of this blog article).

 First question is how  to proceed. If you are building a standard residence you would start with a design plan, blue prints, plot or site plans and plans for electrical, plumbing and HVAC systems, etc.  All of these plans would have to comply with building codes applicable to the specific location. Surprisingly, some states and local bodies do not address treehouses in their building codes or use nonspecific guidelines to determine if building permits are required. This leaves the contractor guessing about vital information. Checking with the local building and zoning authority is a key factor.  Just making a phone call is not sufficient, Take your plans to the board and if they indicate no permit is required, you need it in writing.

There are  resources to turn to as well. There are numerous articles regarding the do it yourself aspect of building a treehouse structure.  There are many fabulous photos of existing tree house structures ranging from simple children’s forts to breathtaking structures.  There are scores of books written by people who have built treehouses around the world as well as standard plans and custom designs. Networking with these treehouse professionals could be a valuable resource. One organization, the International Tree House Association, is seeking to provide guidance to tree house professionals and unite to support both enthusiasts and builders.

There is also a dearth of information regarding what insurance you need to protect your business from liability. Most carriers do not have prepackaged treehouse builders insurance. However, you can certainly build a BOP (Business Owner’s Policy) with your agent or broker.  You will need general liability insurance required by law along with every type of coverage that a standard residential contractor would require. There is no general liability class code specifically for treehouse builders so you can generally assume your code classification would fall under a general residential contractor for general liability purposes. You will also need to list Class Codes for every task you will perform. Code Classifications 1521 and 1751 under construction, maybe applicable. Since there is no specific classification you absolutely need to articulate within the policy that your primary occupation is building tree houses and list every task you will be doing, even if it has a separate class code, to ensure no exclusions.  For instance, if you are doing Tree Removal and construction site cleanup you will need to specifically list this as a task you are to perform. This may be  already covered under the policy definitions as a general residential contractor. If not, you may purchase a rider as this is a separate class code (91629) under general liability.

You also need to consider that a residence that is under construction can be considered an attractive nuisance if there is an enticement factor (presumably a tree house would be far more enticing to a child than a standard house). So you need to know if your general liability covers attractive nuisance or excludes it, and whether you need a separate rider which covers liability for attractive nuisance during the ongoing construction.

You would need to ask narrower questions pertaining to each and every build job and review your insurance coverage with your agent or broker to determine if they can all be covered in one policy, or one BOP or if you need separate riders for each build on a job by job basis.

  • Is the structure habitable?  This depends on whether you are putting in utility services and what utilities you are putting in such as electricity, water, plumbing and sewer for purposes of living either permanently or temporarily in the treehouse.  If the answer is yes then it is habitable and you are presumably, acting as a residential general contractor regardless of whether you perform the service or subcontract out the installation of such services. If you are building a simple kids fort without utilities it would probably not be habitable.

The following questions would determine your need for professional liability  coverage in regard to each task you might be performing.

  • What are the weight/ load bearing requirements to support the tree house? Are you acting as an engineer and making recommendations or have you hired an engineer to consult and sign off the certification? If you are recommending all the specs you will need professional liability for your business or your engineer will in the alternative. One engineer who does certifications for tree houses is Bill Taha, Ph.D. Precision structural Engineering Inc.
  • Who is designing the tree house or making recommendations? Have you hired a tree house designer or architect?  If you are designing any part of the structure you need professional liability or your designer needs to carry professional liability and supply you with a certificate of insurance.
  •  Who is selecting the tree or trees where the tree house will be located?  If you are not an arborist  you would be wise to hire one as of one of the most critical aspects of building a  tree house is to select a healthy and hearty tree that can sustain the weight of the structure with minimal damage to the tree.  If not you need professional liability for Arborist
  •  What type of device are you using to anchor and support the treehouse? Does it’s use require products liability insurance? Did the engineer or you select the attachment device? Will you need professional liability?

Other general questions are:

  •  Are you building on site or are you prefabricating most of the structure in your shop. This is a separate class code (98502) if it is not a building kit, and needs to be articulated in the policy and may require a rider.
  •  Does the site require you to utilize solar or other types of energy due the inaccessibility of electrical power? This is also a separate class code (99080) which needs to be articulated  and may require a rider.

So if you want to go forth and build spectacular tree houses, it is a lofty but attainable goal with the right knowledge and insurance protection.