At some point in our lives, we’ve all enjoyed a dog either as our pet or playing with the neighbor’s pet. Or maybe you have a family member who has a dog, and if you see that family member, you will see their dog. For whatever reason, the saying is that “a dog is man’s best friend!” I’m sure that is true in many cases, but when it comes to insurance, some breeds are judged not so friendly. As a result, there are more aggressive dogs that will attack a human and those encounters can be damaging or in some cases deadly. Because of that, insurance companies have raised more and more red flags over the last few years. Lawsuits arising from those types of actions and the consequences of those lawsuits can be costly not only to the injured party but to the owner of the dog and the insurance company that covers that owner.
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 bitten by a dog brought in by a customer.
Earlier this month, a toddler in North Carolina was hospitalized after a dog bit him. 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 accounted 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). Ensuring Personal Liability coverage is worldwide will mean they are covered if they take their dog somewhere else, such as a dog park, and a bite occurs, said Mary Mullen, Personal Underwriting Manager, Burns & Wilcox, Chicago, Illinois.
Also, many Homeowners policies have a limited appetite, which excludes certain breeds Mullen said. 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, Mullen said. Other exotic animals may make obtaining standard coverage difficult as well.
A Commercial General Liability (CGL) policy will cover the associated costs with dog bites for business owners, such as when a dog bite occurs on their property. Like a Homeowners and Renters policy, the CGL will usually cover the cost of medical bills to the injured party, legal and court fees related to the incident, said Chandra Kwaske, Commercial Underwriting Director, Burns & Wilcox, Detroit/Farmington Hills, Michigan. The CGL generally will not cover the costs associated with reputational damages, such as crisis communication efforts to combat negative media attention.
Business owners are usually going to be considered liable if a dog bite happens on their property – even if an employee, a customer or anyone visiting the place of business owns the dog, Kwaske said.
“The general rule of thumb is that if a dog bite happens – a lawsuit can be expected,” Mullen said. “This can include claims against the owner of the dog, the owner of the location where the bite occurs and more.”
“You have to realize that no matter what breed of dog you have, they can be unpredictable,” Kwaske said. “If you have guests over or children around, dogs may act differently even if they are normally well-behaved.”
Risk management procedures matter
Family members should all be aware of how to manage their dogs when guests visit.
Electric fences and gates should be considered.
Insurance 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, Kwaske said. Like with a Personal Homeowners policy, there are generally no dog bite exclusions with a CGL, but it is important to be a “responsible dog owner” whenever possible.
Kwaske said that posting signs about the presence of a dog at home or the workplace is essential 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,” Kwaske said.
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, Mullen said. Following a dog bite claim, a Homeowners or Comprehensive Personal Liability policy may only be available on the specialty market, which could cost more in premiums or provide more limited coverage, Mullen said.
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 prior 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.
“There have been large dog bites cases that I have seen in the market,” Mullen said.
“We have some unfortunate stories out there, especially involving children.”
Mullen said that 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.
“You need to be transparent with your agent if you are going to have a dog in the workplace. You will want to review your policy to make sure you don’t have any limitations on the liability for animals in the workplace,” Kwaske said.
As with any coverage need, we hope you will discuss any need with us. And if you have a dog and we don’t know it, please consider giving us a call so we can document the conversation and work in advance of a possible dog bite problem that could put you in the situation you read about above.
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[This information was provided by Burns & Wilcox, who works exclusively with retail insurance brokers and agents to assist clients like you with their specialty insurance needs.]
