Keven Moore on Insurance: Who could have
predicted the need for bedbug coverage?

Given the craze for the movie series Twilight, what would you say if I told you that you could buy an insurance policy to protect yourself from nocturnal blood suckers? Honest. Though it is a new Insurance product recently developed to address the costs associated with eradicating bedbug infestations that are rapidly spreading across America.

While driving recently in the Cincinnati area, I noticed a billboard advertising bedbug Extermination and was reminded at that moment that Cincinnati was the #1 city in America for bedbugs — Lexington was ranked 22nd according to Orkin’s recently published list of worst infestations in 2011. After a sudden urge to scratch an itch and a brief discussion with my colleagues, I learned that a client of ours recently had submitted a claim — that was paid — involving a bedbug infestation in a doctor office waiting room. This was a first for me as a Loss Control Consultant.

Infestations of any kind – bugs, cockroaches or rats- typically are excluded from commercial and personal lines insurance policies, and so is the cost of eradicating pests. This has always been viewed as maintenance expense, meaning it was not covered by your insurance policy.

With the bedbugs infestations spreading in U.S. hotels, motels, apartments, dorms, doctor’s offices, libraries, retail establishments, movie theatres, and homes, insurance companies are starting to take notice. And when there’s a demand for a product – no matter how outlandish – someone will likely supply it. So, little crawly creatures have spawned a new enterprise for insurance companies.

Unlike those other blood-thirsty parasites – head lice – bedbugs are extremely hard to eradicate once they infest, and those costs can be high. The expense to exterminate these bugs from your bedding, cracks in walls, headboards, seams of lampshades, carpet joins, furniture, and electrical outlets can range anywhere from $400 for a single room to several thousands dollars for an entire house.

I don’t know about you, but I don’t have an extra couple of grand lying around just to pay somebody to come in to hunt down bugs.

So early intervention is important and being a good loss control consultant, I would encourage people to pay a little extra attention to checking the mattress, headboard and box spring every time you change your sheets. If you are a business owner or manager your staff should be trained to recognize an infestation. If you happen to find one or two bedbugs early on, it is a lot less expensive and easier to treat than an infestation that has been running rampant for months.

These new infestations claims are starting to bring on a host of allegations from bodily injury, property damage, and even mental anguish. The financial damage doesn’t just include the extermination expense but also loss of income, and expenses from “managing the crisis.” For a business owner, lost time is money and is normally an un-insurable loss to you, so imagine how much time you would have to spend rebuilding your reputation as a business owner after an infestation. It would be rather overwhelming.

One carrier offering bedbug insurance has even included a 24/7 crisis hotline, and the services of an expert team to deal with regulators, public health authorities, customers, employees, and the press.

In time I speculate that we will see such coverage become mandatory from insurance carriers, as legislators are already starting to lining up to force carriers to offer it. In addition to this recent increasing demand from lawmakers, hoteliers and property owners are starting to ask for some form of protection too.

Bedbug Infestation occurs because female bug will lay up to 5 eggs per day and they can very quickly multiply while you rest comfortably. They are nocturnal, elusive and hard to spot. They resemble little tiny apple seeds in size and color, unless you have had a few that take up residency in your home for any extended period of time and in that case, they can grow up ½ inch long in size.

Aside from bite symptoms, signs include fecal spots, blood smears on sheets, and molts or eggs. Although bed bugs can live for a year without feeding, they normally try to feed every five to ten days. But that is exactly what makes it so difficult to get ride of these nasty creatures. You may think you’re rid of them only to find that they return weeks later.

Hotels on average today will spend about $600 to $800 per room to eradicate bedbugs, but this says nothing about the lost income if an infestation becomes public knowledge. With social media and websites today such as www.bedbugregistry.com, a business can be severely impacted financially.

According to the CDC, “bedbugs have been found in five-star hotels and resorts and their presence is not determined by the cleanliness of the living conditions where they are found.”

But I say tell that to Little Johnny’s mother when your son happens to invite Johnny over to spend the night, or just play Xbox. Having bedbugs can be stigma that follows your family or your place of business for a long time, so be aware, be proactive and ask your insurance agent about coverage.

Keven Moore is director of Risk Management Services for Roeding Insurance (www.roedinginsurance.com). He has a bachelor’s degree from University of Kentucky, a master’s from Eastern Kentucky University and 25-plus years of experience in the safety and insurance profession. He lives in Lexington with his family and works out of both the Lexington and Northern Kentucky offices. Keven can be reached at kmoore@roeding.com.