Increasing Frequency of Dog Bites a Reminder of Costly Liability for Businesses and Pet Owners

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). 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.

In addition, 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. There are other exotic animals that may make obtaining standard coverage difficult as well.

“The general rule of thumb is that if a dog bite happens – a lawsuit can be expected” – Mary Mullen, Burns & Wilcox

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 the dog is owned by an employee, a customer or anyone visiting the place of business, 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

There has been a movement in recent years that bringing pets to work can benefit an office environment. Millennials in particular enjoy bringing pets to work when it is allowed by their employers. However business owners and employees need to recognize the associated risks.

“If you have dogs around the workplace, you want to have documented policies in place to protect yourself,” Kwaske said.

This is true for homeowners as well. 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, 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 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,” Kwaske said.

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, Kwaske added. 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, 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.

“You have to realize that no matter what breed of dog you have, they can be unpredictable.” – Chandra Kwaske, Burns & Wilcox

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.

“There have been large dog bites cases that I have seen in the market,” Mullen said. “We have some really sad 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, an insurance broker or agent must be consulted. Click here to forward this article to your insurance broker or agent to ask if you need this coverage, or share this with clients to start the conversation and ensure proper protection.

This information was provided by Burns & Wilcox, North America’s leading wholesale insurance broker and underwriting manager. Burns & Wilcox works exclusively with retail insurance brokers and agents to assist clients like you with their specialty insurance needs. Ask your insurance broker or agent to review your Personal Liability or Commercial General Liability (CGL) policy and ensure you have proper protection.