How Much is Enough?

Safeguarding your business against various risks is crucial for long-term success

The No. 1 rule for every company is this: Protect your assets.

That’s where proper insurance coverage—including auto insurance, workers’ compensation, and general liability—can come in. But insurance isn’t the end all, be all. When it comes to making sure your company is properly insured, sound advice starts with doing what you can to minimize risk, including properly training workers and emphasizing safe driving and work habits.

“Having regular safety training for treatments, driving, and general environmental awareness is so important to help prevent insurance claims before they happen,” says Wendy Lund, administrative director for Accel Pest and Termite Control based in Virginia. 

She and others who oversee insurance for their pest control companies point out that prudent business practices can reduce claims and, therefore, overall costs for the company—especially since basic coverages such as workers’ compensation and automobile insurance are required by state laws. So, minimizing costs often is a matter of doing what you can to limit your exposure.

“With workers’ compensation and auto insurance, you don’t have a choice. You must have some coverage,” says Mike Rottler, chair and CEO of Rottler Pest Solutions based in Missouri. “And I never go with the state minimums, especially if you want to stay in the business. The minimums are usually nominal. You don’t want to overspend. But you want to protect your assets.”

LIMITING AUTO EXPOSURE

Costs for automobile insurance in particular have skyrocketed in recent years. “Distracted driving is the No. 1 cause of soaring insurance costs today,” says Dave Bradford, CEO of Certus Pest based in Florida. That is true regardless of the industry, he adds. “Drivers on mobile devices, either texting or talking, is the main reason why auto insurance is high. Even hands-free has proven to be a distraction.”

But companies can implement policies that guide employees. At Certus, team members cannot use their cellphones, even if they are using a hands-free device, when driving. “Our cellphones won’t accept phone calls or text messages the moment our folks reach 10 miles an hour or higher,” Bradford says. “Map functionality and 911 still work. But if there’s a phone call that they must take or something that they must do on their device, they must pull over to work on their phone.”

The potential consequences of doing otherwise are detrimental to their safety or the safety of others, he says. “And the more significant the volume of claims activity a company has—and the rising severity of the claims activity—will directly impact your cost of coverages.”

Rottler says his company has adopted similar programs. Since 2008, he has also served on the board of PestSure, an insurance company that specializes in covering pest control businesses. “I have seen the progression of what claims look like and what causes them,” Rottler says. “The auto claims are horrendous, and it is a bit of an epidemic these days.”

His company has nearly 300 vehicles on the road, and all of them—including those for sales, managers, and technicians—have cameras that monitor a driver’s behaviors. If there is an event, the cameras capture key data, such as whether brakes were applied. The camera vendor oversees the analytics from an incident and provides a report. 

“If they had to swerve to avoid a pothole, no big deal,” Rottler says. If it is something else, he and his team can ascertain whether people were rolling through stop signs or driving too fast. “It is helping our employees become better drivers, and it ultimately is about getting them home safely every night.”

The camera operation costs about $50 per month per vehicle, he says. “It’s worthwhile. You don’t want your people injured, and you don’t want them hurting someone else.”

Rottler often gets questions from industry peers on whether his employees have privacy concerns. While some workers initially might ask questions, they quickly realize the program is in their best interests. “Significantly more times people get out of trouble than get into trouble,” he says. “And no one has walked into my office to say they have a problem with it.

“I feel bad for our drivers. They are out there trying to drive a commercial vehicle, and people are on the phones constantly,” he adds. “It can be really treacherous.”

Long ago, insurance companies might have offered various safe-driver discounts for such programs. “In today’s world, there isn’t anything out there that is an auto discount,” Rottler says. “Nowadays, any savings comes in fewer claims.”

THE BIG THREE

Auto coverage is one of the three basic insurance lines that all companies should have, with the others being general liability and workers’ compensation. “Those are the three big cost drivers for pest control companies,” Rottler says.

Like auto insurance, workers’ compensation insurance is best approached through the lens of being proactive. That starts with appropriate hiring policies, which might include drug tests and thorough vetting of a candidate through background checks.

“There’s a lot of worker safety training,” Rottler says about his company’s approach. “You need to be aware of the factors that impact your rates. It is about running a good business and taking care of problems quickly.”

Property insurance, in conjunction with general liability insurance, shouldn’t be overlooked, he and others say, especially if you are leasing, Bradford says. The lease should spell out who is responsible for property insurance, and you should ensure you have it, he adds. 

The more significant THE VOLUME OF CLAIMS ACTIVITY A COMPANY HAS - AND THE RISING SEVERITY OF THE CLAIMS ACTIVITY - will directly impact your cost of coverage.

-Dave Bradford, Certus Pest

OTHER PROTOCOLS

Creating a safety-minded culture, implementing safety protocols, and training can reduce avoidable accidents and incidents. For example, companies can train technicians on navigating attics and crawl spaces where a single misstep could damage a ceiling or break a water line, Bradford says.

“That doesn’t have as much to do with coverage as it does your internal safety and training procedures,” he says. “It’s about being mindful about how they complete an inspection to avoid unnecessary damage.”

But when there is an accident, companies need to react right away. “It’s important to have processes in place on how to handle accidents when they happen and ensure any actions that led to the accident are addressed with the employee immediately,” Lund says.

Sometimes, companies might resolve an incident on their own, such as paying out of pocket for a fender bender. While that might seem prudent, Rottler says that if there are complications later, the insurance carrier might deny the claim. “[But] if they have it on record and anything occurs down the road, you have the right to run it through your insurance,” he says. 

BEYOND THE BASICS

Cybersecurity has become an increasing concern nationwide and can be obtained as a separate policy. As with other insurance, prevention and training—particularly awareness—are critical. “We make sure our employees are routinely reminded to watch out for scam emails and to check the source before clicking into any links,” Lund says.

Such training can help prevent disasters, Rottler says. Business operations must be protected, as well as sensitive information that customers give the company, such as credit card numbers. His company has had some scares over the years, so he is intent on staying vigilant. “It’s disturbing. There’s so much phishing going on and so many different scams,” Rottler says. 

His nephew works in the company’s IT department and will send out test emails to see if employees have followed training. For example, employees should know that managers aren’t going to send an email asking them to buy gift cards, one of the schemes that is increasingly common among cyberthieves.

“And accounting isn’t going to ask you to change your bank account in an email,” Rottler says. “They’re going to pick up the phone and make a call.”

KNOW THE DETAILS

Before you sign on to any policy, experts also say you should know the details and have a trusted insurance agent or broker who will give you an honest assessment.

“There are a lot of policies out there that don’t always have great coverage,” Rottler says. For example, some might exclude coverage for critical elements such as termites. “You need to put some thought into it and have a good broker or a good organization where you are confident they have your best interests at heart.”

Lund points out that company owners and managers cannot be experts in every aspect of their business. They need a network of other professionals who can fill the knowledge gaps. “Having a broker we can trust—and who is knowledgeable about both general business insurance and industry-specific needs—has helped us focus on day-to-day operations,” Lund says.

A representative who understands your business will find the best rates but also look out for your overall interests, Bradford says. That means the rep will have taken the time to know your culture, your risk tolerance, your credit­worthiness, and your liquidity. 

“All of those come into play as it relates to limits and deductibles,” Bradford says. He has used the same broker for 14 years, spanning a time when he was in other industries. “If you build trust in that person to watch out for you and your business, it gives you peace of mind and makes things simpler.”

Depending on the details, a low-cost policy might not have the best terms, and a representative who is advocating for you will be able to sort that out, experts agree.

“In the end, I try to look at insurance as something you have to have,” Rottler says. “But it’s really important to run your business in a way that you don’t need it.”

Maximize Your Savings: NPMA’s Exclusive Member Benef its  

As a pest management professional, optimizing your business operations and reducing costs are always top priorities. NPMA offers a suite of money-saving programs designed exclusively for its members.

PBC PEST CONTROL INSURANCE: INDUSTRY-SPECIFIC PROTECTION

At the forefront of NPMA’s cost-saving initiatives is the PBC Pest Control Insurance program. Program Brokerage Corp. offers customized coverage tailored specifically to the unique needs of pest control businesses. Its status as the Official Endorsed Broker of NPMA underscores its commitment to providing comprehensive protection at competitive rates.

BEYOND INSURANCE: A SUITE OF SAVINGS

While insurance is crucial, NPMA offers several additional money-saving programs:

1. ARM Solutions: NPMA members receive an additional 10% more accounts on top of their purchase of ARM’s debt collection services.
2. Continental Tire: Members can access significant discounts of approximately 30% on passenger and light-vehicle tires, helping to reduce fleet maintenance costs.
3. FedEx Advantage through PartnerShip: This program offers exclusive discounts on FedEx Express and FedEx Ground services, as well as savings on less-than-truckload freight shipments and competitive rates on full and partial truckload shipments.
4. Holman Fleet Management: Holman Small Business Solutions provides comprehensive fleet management services, with exclusive benefits including the first month of every new lease at no charge and waived processing and handling or lease activation fees.
5. Nissan Fleet Program: Members can take advantage of exclusive discounts on new Nissan and Infiniti vehicles, significantly reducing the cost of expanding or upgrading company vehicle fleets.
6. Seay Management Consultants: NPMA members have free access to human resources consultants for questions and concerns, plus a 15% discount on more comprehensive services.

LEVERAGING YOUR MEMBERSHIP

These money-saving programs represent just a fraction of the value NPMA membership provides. By taking full advantage of these exclusive offerings, pest management professionals can significantly reduce their operational costs, improve efficiency, and reinvest savings into growing their businesses.

As an NPMA member, you have access to a wealth of resources designed to support your business’ success and financial health. Don’t miss out on these opportunities to boost your bottom line while receiving industry-leading products and services.

To explore these programs in more detail and start maximizing your savings, visit npmapestworld.org/memberbenefits.