How would you like it if one of your insurance clients burned down someone's house while exterminating bed bugs and then went on live TV to proclaim that he would take care of it—he has insurance!?
The exterminator in question used propane heaters to raise the temperature in the structure to 135 degrees, which is hot enough to kill the pests. He said he requires that residents leave and removes flammable items from the home. Unfortunately, in at least this case, one flammable item—the carpeting—was not removed and ignited, starting a fire that destroyed the duplex home. The fire went unnoticed in the empty home until it was too late.
I don't have access to the "insurance" form that the owner said will take care of things, but I do know that it's terribly bad business for an insured to invoke insurance even before the loss is reported. Unless he has a liability policy that has deleted pertinent exclusions, it would appear that the Damage to Property exclusions (j. (4) and (5), in particular) would prevent coverage being triggered for the instance. After all, he was working on the house (real property – exclusion j. (5)), and the damage arose from his operations.
There could be debate over whether he was working on the entire house at the same time, but I would argue that he was since the whole structure was raised to an internal temperature of 135 degrees. I think damage to furnishings would be excluded under j. (4), since they also were in his care, custody, or control.
There are other remedies to eradicate bed bugs, but at least one of those involves an insecticide that has been banned since 2007. The pests—despite a recent report that some were found carrying drug-resistant staph bacteria—are typically thought to be more creepy than dangerous. But we still worry about them hitchhiking home with us when we close up our suitcases at the end of a hotel stay. Getting rid of them is very important to most of us.
I wonder how many times one of you has flinched when hearing a client commit to "take care of things" through insurance. This exterminator probably would have been better off ending his TV interview by saying, "Well, at least I got rid of the bed bugs."
Do you think this exterminator's insurance will cover the loss? Have you ever experienced that unnerving feeling, listening to a client pledge that his insurance will apply to damage that might very well be excluded?
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