Pet Taxi Coverage and Exposures
Pet Taxis can be another source of revenue for your pet sitting business, but they can also open up a whole new world of liability exposures. Since we receive questions on a daily basis as to whether a pet taxi is covered under the NAPPS Liability Policy, I would like to take this opportunity to examine the various exposures involved and how they are best covered by insurance. We'll take a look at some claims from the archives to clarify what is covered under the NAPPS Liability policy, and what is excluded or not covered. In addition, we'll examine what insurance policies and coverage endorsement forms are best to carry when transporting pets in your vehicles.
Under the NAPPS Liability policy all pets in your care, custody or control are covered where ever you go with them, including in your vehicle, in your employee's vehicles and in your independent contractor's vehicles. Client's pets are covered up to the care, custody or control limit you choose when you take out the policy, ranging from $10,000 up to $200,000 for any one occurrence. Vet medical injuries to pets in your care, custody or contol are paid regardless of fault (negligence), up to the limit you choose. Therefore if you are transporting more than one pet at a time, be sure to choose the appropriate limit to cover all the pets you are transporting at one time.
Please note if you are insured via another insurer under a liability policy or via a Business Owners Policy, you will want to review the coverage forms to be sure coverage is provided for transporting client's pets in your care. Most policies (if designed for a pet sitter) on the market today will offer an endorsement/coverage form and cover pets where ever you go with them, but the insurer may label the form as Animal Bailee or Veterinarian Expense coverage. Be sure to read the actual form though, as coverage for pet injuries regardless of fault may be limited to $1,000 or $2,500, and this may not be adequate to cover those claims that the pets bring upon themselves. As an example, if a dog was to jump out a car and suffer injury or was to ingest something (think seatbelts, toys, etc.) in the car, the sitter may not be considered negligent, and the amount available to pay this claim would be limited.
Here are ten examples of claims that have been paid over the years involving transporting pets in vehicles/pet taxis:
- Dog jumped out of car window and landed on its head. Dog had a seizure and was taken to the vet. Total Paid $718
- Dog ingested pet sitter's medication that was in back seat of sitter's car and required vet care. Paid $836.
- Client's dog was stolen out of pet sitter's vehicle. Total Paid $3,508.
- Pet sitter shut van door and accidentally caught dog's tail. Paid $1,122.
- Dog jumped out of sitter's car. Sitter found the dog later that night and she had been hit by a car. Total Paid $8,527.
- Dog attempting to get out of pet sitters vehicle fell and broke leg. Total Paid $5,125.
- Dog attempted to jump out of car and its foot got stuck in window. Paid $9,488.
- Multiple dogs were exiting sitters van. Small dog was struck in the eye by larger dog. Paid $2,703.
- Dog in insured's care went to jump out of vehicle. When sitter attempted to stop the vehicle, the dog fell and broke his tooth and cut an artery in his tongue. Total Paid $800.
- Dog jumped out of moving vehicle while in route to park, causing multiple injuries. Paid $14,224.
As you can see, many different incidents can take place while pets are getting in, being transported, and getting out of pet sitter's vehicles. Pets are the first part of the insurance equation when operating a pet taxi, so please be sure to take precautions and learn from these claims so they do not occur in your business. If you have employees or independent contractors driving pet taxis on your behalf, be sure to share these claims examples with them, so they too can be aware of the various things that can happen if not careful.
Now let's turn our attention to the pet taxi, meaning the pet sitter's owned or leased vehicle(s), and look at how to best cover the various exposures associated with using a vehicle in your business. We often receive claims called into our office which are denied, as pet sitter's vehicles/auto liability insurance is not covered under the NAPPS General Liability policy. Here are just a few examples of claims we have heard through the years:
- Pet sitter backed into client's mailbox when pulling out of driveway to take client's dog to the vet.
- Pet sitter struck and dented car door against side of client's home upon returning with pets.
- Pet sitter's employee hit the accelerator while vehicle was in drive in lieu of reverse, and ran into client's garage door with her vehicle.
- Client's dog chewed through seat belt strap of pet sitter's car.
- Client's dog chewed upholstery of pet sitter's vehicle while riding in backseat.
- Pet sitter attempted to open car door, but before she could do so dog scratched and damaged side door panel.
All of these claims could potentially be covered via a commercial/business auto insurance policy, so long as proper coverage (adequate limits and coverage endorsements) is maintained. A business auto policy provides coverage for liability resulting from the use of your business auto. It can also provide coverage for loss to your vehicle if physcial damage coverage is purchased. In the first two denied claims listed above, the client's mailbox and the client's house would both be covered by the pet sitter's auto liability policy, while in the last 3 claims the damage to the sitter's vehicle would be covered under the physical damage section of the sitter's auto policy (if purchased).
Please be aware that physical damage coverage is broken into two parts, comprehensive coverage (also known as "other than collision") and collision coverage. It is important to understand the differences in these coverage's since physical damage is not required by state laws, but may be required by a finance company if you finance or lease your vehicle.
Comprehensive coverage typically covers the following causes of loss: theft, vandalism, fire, wind, hail, earthquake, flood AND damage to your car by animals. So if we go back and review the claims examples, if you want coverage for your seat belts, upholstery and damage caused by client's pets (in your care) to your vehicle, you will need to purchase comprehensive coverage under your commericial auto policy. Collision coverage covers your vehicle for damage sustained in a collision with another vehicle or object. If you are in an at fault accident where you run into another vehicle, the liability coverage under your auto policy would pay for the other person's vehicle to be repaired, but if you want your vehicle repaired, you would need to maintain collision coverage. And if you were to accidentally run into a client's mailbox, garage or house, and want your vehicle repaired, you would need collision coverage to cover the damage to your vehicle.
As some of you already know, when you have your employees or partners driving their vehicles on behalf of your business, you expose your business to further risk. Under a business auto policy, coverage can be purchased for non-owned auto liability. Non-owned auto covers those autos in which you do not own, lease or borrow that are used in connection with your business. It includes coverage for autos owned by your employees, partners, members of an LLC or members of their households so long as the auto is being used in your business or for your personal affairs. Consider if your employee was to damage your client's garage or home with his or her auto. In most cases the client is going to look to your employee and/or your business to cover this claim. In most cases the auto driven by your employee (assuming the employee carries adequate insurance) would be primary and pay the claim. However, the non-owned liability coverage under your business auto policy would be secondary, and would provide coverage for your business over and above the employee's policy, if your employee's personal auto policy did not have adequate limits to cover the claim. So if you are utilizing employees, you should consider carrying the non-owned auto endorsement to properly cover your exposure.
Last but not least, we have also had many inquiries over the years where pet sitters wish to use their pet taxi to run errands and pick up / drop off clients at airport, etc. Once you begin driving people around for hire or for a fee, you are now operating a true taxi service, which adds a new layer of exposure. Similarly, if you are running errands such as picking up or dropping off dog food, pet supplies, groceries, packages, etc, or acting as more of a concierge service, this also adds a new layer of exposure. Please keep in mind that these are exposures in which you will need to make your business auto insurer aware of, as they are outside the realm of a pet taxi or a pet sitter. Many insurance companies will not cover these types of operations and may ask you to go elsewhere for coverage (usually an insurer that specializes in a taxi service or courier service, etc.). So be sure to check with your insurer before you have a claim and make certain you have adequate protection.