29 Mar Dog Bites – A Very Serious Issue
For many years, I have been tracking the impact on the insurance industry from dog bites, and virtually every year, the impact grows. As noted in this excellent article published by the Insurance Information Institute, in 2020, dog bites and other dog-related injuries accounted for $854 million. That number was $484 million less than 10 years ago — a 76% increase in less than 10 years.
It is estimated that more than one-third of all homeowners’ liability claim dollars paid out stem from dog bites. The average cost per claim continues to rise and is now over $50,000!
The key issue from an E&O perspective involves the inconsistent manner in which insurance carriers deal with this issue. Some carriers exclude various breeds, while others may be provide sub-limits on this exposure. I have heard of carriers accepting various breeds if the pooch has undergone a test indicating their potential to become vicious. This speaks to the need to identify any “dog” exposure, especially when writing new business. In addition, when moving a homeowners client (that owns a dog) to a new carrier, there is the possibility that the underwriting guidelines between various carriers are not the same. Securing up-to-date information on this exposure is very important. It may impact the carrier’s willingness to accept the risk.
With many families adopting rescue dogs, there is certainly the possibility that the family (or even the Humane Society where the dog was before adoption) are not aware of the exact breed. The suggestion is to determine the dog’s DNA (just Google this topic to see all of the various tests on the market). Why? Let’s assume that the carrier excludes German Shepherds in their underwriting guidelines, and the homeowner carrier then finds out that your client’s dog (that just bit the mailman) has some German Shepherd in them. Could they deny the claim? It is a possibility.
Be sure to dedicate some focus to this important issue.