CONTRACTS AND GROSS NEGLIGENCE
This will not be a long drawn out legal explanation of what Gross Negligence is and all of its legal ramifications as I am not a lawyer so not qualified legally. I also do not want to bore you to death with a lot of Latin mumbo jumbo.
The reason this is a very important subject is to know what gross negligence means in the realms of pest and lawn control and its exposures. What it means to your business as well as to the insurance you have and the premiums you might have to pay.
Let’s start with a simple definition of gross negligence:
Gross negligence is a conscious and voluntary disregard of the need to use reasonable care, which is likely to cause foreseeable grave injury or harm to persons, property, or both.
Seems pretty easy to understand. With regular negligence you accidentally hit a pipe while drilling for a termite job. It happens all the time. But what happens if you drill the same house the next day? You don’t find out where other pipes might be and you hit a gas pipe and the house explodes? Is that Gross Negligence?
The main reason for this blog is to simply state a PMP needs to have a gross negligence clause in the contracts they have with their customers. The language is very simple and could be as easy as this:
Under no circumstances or conditions shall the Company be responsible for damage or injuries caused by the Company at the time the work is performed except those damages resulting from gross negligence on the part of the Company.
How many times have you heard PMPs:
1. Drilling into a pipe
2. Move furniture causing damage to floors or carpet (watch out for the new cushion vinyl flooring)
3. Treating carpets with a pesticide causing a stain (rare these days thankfully)
4. Pet accidentally dying due to product application
5. TERMITE DAMAGE on a retreat only contract-VERY IMPORTANT!!!
6. Misdiagnosing an insect or not being more specific: Subterranean vs. Formosan termite (yes we handled that lawsuit)
7. Bed bugs re-infesting a room biting a customer
There are so many more examples we could add to this list on claims that we have handled over the last 20+ years. A Gross Negligence clause possibly could have allowed our insureds to walked on the claim or pay a smaller percentage. That is the bottom line.
The insurance market is hardening and we feel in the next few years premiums will increase with it also getting harder and harder to find affordable insurance if you have a claim. A Gross Negligence clause in your contracts can help avoid that problem.
LIPCA was created to help its insureds on matters just like this. We feel there is no other national pest/lawn program like ours in the U.S. There are a lot of new carriers writing pest control insurance. Be careful please. Good luck and if you have any questions about this blog or about LIPCA please feel free to contact me at firstname.lastname@example.org or 800-893-9887 ext 7016.