How much does pest control insurance cost and what is the average cost of pest control insurance? These are top questions to ask if you operate or plan to run a pest control company.
Without pest control insurance, if anything goes wrong – like a job that didn’t deliver on promises or one that results in damage to property, people or pets – your company can be liable for big costs. This can put you out of business. Or worse, your home.
In short, having pest control insurance to safeguard your operation is good business practice. It’s a crucial financial safeguard. This brings us back to the first question: how much does pest control insurance cost?
In this article Rapid Solutions answers this question and looks at other important consideration factors when choosing business cover.
What’s the average cost of pest control insurance per month?
How much can you expect to pay for pest control insurance per month or year? What type of cover will you get in return?
There isn’t one concrete answer to this question and there’s good reason for this. The price of pest control insurance (and insurance in general) is tailored to your business. Every business is different, and every business has a different range of risk factors.
Risk factors for pest control companies
Risk factors include a company’s claims history. For example, has your company had to claim one or more times in the past or is it claims free? If you did claim, what was it for? For how much?
Other risk factors include the size of the business, how much turnover it generates (and therefore how many jobs it takes on) and the types of activities it carries out. The quantity and type of work you do, such as termite management and pre-purchase inspections, go a long way in informing the price of your monthly pest control premium. That’s the crux of your business and therefore what you need to be safeguarded for.
Pest control insurance companies carry the risk so you don’t need to
Greater workloads and associated risks naturally lead to higher premiums you’ll need to pay each month. This is because the insurance company carries the risk (of claims). If something does go wrong they’ll be able to help carry your business’s incurred costs.
On the other hand, a solo operator who only does general pest treatments will usually have a much lower premium.
Some other variables that affect your monthly premiums can include:
- Level of cover. The higher the limit, the higher your premium is. However, you may need minimum levels of cover to work for some businesses and government departments
- Excess. Some insurers will offer a lower premium if you take a higher excess. It’s important to check your quote documents, as it’s common for there to be different excesses if you do more than one business activity. For example, an urban pest excess is usually lower than an excess for a Pre-Purchase Timber Pest Inspection. Your excess may also increase if you have a claim.
What happens if you don’t have pest control insurance?
If you don’t have pest control insurance and a complaint or claim is made against you, it could cost a significant amount of money. You can be liable for costs to defend the claim or pay damages if you’re found to be liable/at fault.
It’s common for legal costs to accumulate to more than $15,000 in successfully defending a claim… Even if you/your staff member haven’t done anything wrong. Costs can vary greatly, from a few hundred dollars (such as refunding a customer for the service you provided) to hundreds of thousands if the alleged loss is significant.
At Rapid Solutions, our most typical claims for termite management and Pre-Purchase inspections cost on average $50,000, but it’s not uncommon to see claims for costs into the hundreds of thousands, particularly if lawyers are involved. These costs cover rectification of damage such as termite affected timbers or replacement of defective building elements such as retaining walls or roofs. You may also be paying for your own legal costs, as well as the lawyers of the person making the complaint against you.
Whether it’s a valid claim (such as missing termite damage) or a baseless one (a new homeowner found defects that weren’t apparent during your inspection and wants to claim on your insurance to pay for the repairs), having an insurer to back you is invaluable. With them on your side to defend or settle the claim, your precious time, energy and money aren’t at risk.
Find out more about the ins and outs of making an insurance claim – before you ever need to make one.
What pest control insurance cover should you get at the very minimum?
As an insurance provider that’s pretty much seen it all in this industry, we believe your pest control premium is worth every cent. The typical levels of cover are $500k or $1m for professional indemnity insurance and $5m to $20m for general liability insurance.
This is often driven by your customers, who may stipulate minimum levels of cover. For example, councils, schools, government departments and large corporations. Find out what is professional indemnity insurance and what is general liability insurance to see why both are important and how they differ.
Do you have to get pest control insurance to operate?
Yes, sometimes. For example, if you carry out termite treatments and/or inspections in Queensland you have to have pest control insurance as this is a state licensing requirement.
Even when it’s not a legal requirement having pest control insurance in place is still smart business practice to safeguard your business’s finances.
Insurance is also often a requirement of businesses that want to engage your services. Many simply won’t offer you work or valuable contracts if you don’t hold current insurance.
Can you get insurance if you’re new to pest control?
Any business that buys a pest control insurance policy must meet the insurer’s underwriting guidelines. This depends on the type of work your business carries out, such as general pest control vs termite treatments. It also depends on any state or territory licensing and regulations you need to comply with.
If you don’t have the required licensing, qualification or years of experience for the types of work you’re doing, you can be denied insurance.
Insurers also look at what, if any, claims have been filed against you, whether you’ve been bankrupt or if you’ve been charged with criminal offences in the past.
Besides cost, what can you expect from a good pest control insurance policy?
Besides asking how much pest insurance costs you also need to ask how your chosen policy meets the needs of the business. This includes having the appropriate levels of insurance cover that protects all your operations. As the owner, you must have a clear understanding of what is and isn’t included in your policy.
Your policy will consist of the following:
- Your proposal form (what you tell the insurer about your business)
- The insurer’s quotation
- The policy wording
- Any endorsements (which cover specific business activities such as Termite Management or Urban Pest Control)
Read all these documents and take your time so you get a good understanding of inclusions, exclusions and any other policy conditions.
Understand the policy conditions, such as licensing, qualifications, use of subcontractors and Australian Standards. Find out if and when you need to comply with these, in the event a claim is made against you.
Working with an insurance broker to get the right pest insurance cost and cover
In addition to how much pest control insurance costs, there are many important points to understand. If you’re unsure whether you’re getting adequate cover, you could consider engaging a qualified insurance broker.
An insurance broker will get to know your business and source the most suitable insurance products. They’re in a position to give you advice about which policies may best fit your needs. Your insurance broker might alert you to other insurance options you can also benefit from that give you wider cover at a better fee. Like insurance to safeguard your business vehicle, worker’s compensation and equipment; they can very likely help you get the best price too.
Protect your business now and into the future with run off cover
Professional indemnity insurance doesn’t work like a gym membership that you can pause if you stop working or the work slows down. If you cancel your policy today and don’t take run off insurance then you won’t be covered for work you’ve done in the past.
This means that if an inspection you did a year ago results in a claim and you haven’t kept your policy up to date, you won’t be covered. Remember, if a fault is found in past work that you’ve done, there’s a chance you could be legally required to pay damages.
Whilst it can feel like a grudge purchase to pay insurance, particularly if you’ve been operating a while and haven’t had a claim, or if you’re just starting out and not doing a great deal of work, your insurance premium is usually a pretty small annual investment to keep your financial assets protected. With our legal system easier than ever to access and an increasingly litigious society, Rapid Solutions sees more clients now than ever faced with threats of legal action and demands for compensation, often with very little basis.
Consider insurance an essential investment cost in a well-run, properly protected business, with the added bonus of helping you sleep better at night.
Contact Rapid Solutions for insurance today
When you’re asking yourself how much pest control insurance costs, consider this… Paying a small sum each month protects your most important assets if someone makes a claim against you.
Knowing your business, home and any other financial assets are safeguarded keeps them safe and gives you peace of mind.
Contact Rapid Solutions today to find out how little your professional indemnity insurance and general liability insurance plans will cost and how much cover they provide your business.