Groomers, pet boarding facilities and veterinary practices share a special bond with their customers and they provide valuable services for animals in their care. And for these reasons, their businesses transcend the transactional.
This means owners of pet services businesses need to ensure that their businesses, customers and pets are protected when the unforeseen occurs.
Pet care professionals will deal primarily with two types of insurance: small business insurance (to protect their own livelihoods) and pet insurance (for animals in their care). The following addresses some FAQs about both types of insurance.
Why is it important for pet care professionals to know about pet insurance?
With U.S. pet owners spending just shy of $2 billion on pet insurance in 2020,1 pet care professionals of any stripe are bound to field questions from confused customers on pet insurance pricing, coverage and claims. Veterinary practice employees are most likely to deal with pet insurance directly, but some customers, confused by the relatively new insurance offering, will turn to their groomers and daycare providers as knowledgeable pet care professionals.
How does pet insurance work?
Pet care professionals should be aware that most pet insurance operates within a reimbursement insurance model. (Note: There are a few insurers that will work to pay the veterinarian directly.) In general, customers pay for the cost of their animal’s care up front, then are reimbursed by their pet insurance company for the treatment amount, minus the deductible, copay and any uncovered expenses. Reimbursable treatment typically includes new injuries or illnesses (not pre–existing conditions) occurring outside of policy waiting periods.
Are there multiple types of pet insurance available? And what’s most important for my customers?
Pet care professionals should understand the different types of pet insurance on the market today. While offerings vary from provider to provider, many offer wellness care coverage, accident–only coverage or accident plus illness coverage. Usually offered as an add–on, wellness care plans typically cover routine preventive care such as vaccinations, parasite screenings, teeth cleanings, and flea and tick products.
Accident and illness coverage, on the other hand, deals with unexpected events. This is where pet insurance can be a much–needed lifeline for pet owners. As veterinary care becomes more advanced, it also becomes more expensive—the average cost of unexpected veterinary care for dogs and cats is between $800 and $1,500.2 Unlike wellness care (the costs of which are relatively low and predictable), costs associated with accidents and illnesses are much more sudden and expensive.
What does having insured customers mean for a pet professional’s cash flow?
Cash flows are the lifeblood of all small businesses (pet professionals included), but managing them is tricky; three in five small business owners say they’ve made a poor business decision because they were worried about cash flows.3 When unexpected expenses hit (like equipment failure, theft or fire damage), lack of cash flows can lead to long–term problems from which many businesses don’t recover.
Pet insurance can help veterinary practice owners ease cash constraints. One study by the AMVA found that owners of insured pets spend 29% more treating dogs and 82% more treating cats than pet owners without coverage.4 And, benefits extend to the pets themselves: With owners less worried about a sky–high vet bill, pets are more likely to receive treatment at the first sign of a problem (rather than in a worsened condition days or weeks later).
While they typically won’t deal with pet insurance directly, insured customers are better for groomers and daycare providers, too. Veterinary visits (both surgeries and routine care) are the biggest annual expenses for dog and cat owners.5 With those amounts capped, insured customers free up more of their household budget for other pet goods and services like boarding, enrichment, grooming, toys and accessories.
How else can pet professionals protect their cash flows?
By ensuring they’re properly insured for both property and liability risks, pet care professionals can ease the impacts of disastrous events on their cash flows. In addition to protecting against common small business boogeymen like fire and theft, tailored pet business insurance can help pet services businesses recover from other complications that arise from working with people and animals (e.g., lawsuits associated with lost and stolen animals, customer medical expenses incurred from on–site injuries, and veterinary bills from on–site animal altercations.)
What types of small business insurance should pet care professionals consider?
With an array of small business insurance options on the market, pet care professionals need to make sure they’re properly protected with the right types and amount of coverage. They should focus primarily on two types of insurance: workers’ compensation and business owner’s policy (BOP).
If you have even one employee, workers’ compensation insurance is required by law in almost every state. This type of policy covers employee medical bills and lost wages if they become ill or injured on the job. If an injured employee files a lawsuit, it can also help cover legal fees and court costs.
BOPs combine general liability and property insurance into a single, cost–effective package designed specifically for small businesses. For pet care professionals, this can protect from legal bills and other expenses related to client injuries, theft of equipment or products, and damage to business equipment or customer property.
What else should pet care professionals consider when exploring small business coverage options?
Understand the risks associated with your business. Like with any type of insurance, it’s easy to ignore small business insurance until you actually need it—and by then it’s too late. (This is also the case with pet insurance.) By proactively researching the offerings on the market, pet care professionals will realize it’s accessible, affordable and necessary to protect themselves from the financial strain associated with unforeseen incidents. Don’t let a customer or employee accident, fire or malicious act destroy the business you’ve spent years building.
Recognize that not all small business insurance is created equal. The convenience store next door or the beauty salon across town will require different types of coverage than your pet services company. Compared to other types of small businesses, pet care professionals incur another layer of risk; they’re not just dealing with human customers, but also their furry family members.
By considering the unique risks associated with pet care businesses and seeking out the coverage options to match, pet care professionals can achieve the peace of mind that their business, customers and pets in their care are covered when unexpected events arise. ✂️
1. In-Force Gross Written Premium (GWP) North America. (2020). NAPHIA. https://naphia.org/industry-data/section-1-gross-written-premium/
2. Are you prepared for a pet emergency? Most Americans are not. (2018, June, 14). CNBC. https://www.cnbc.com/2018/06/14/are-you-prepared-for-a-pet-emergency-most-americans-are-not.html
3. State of Payments For Small Business. (2019, November). Intuit Quickbooks. https://quickbooks.intuit.com/payments/manage-cash-flow/#state-of-payments-report
4. Pet Insurance Offers the Potential of $7 Billion More in Veterinary Spending Annually, New AVMA Study Finds. (2020, July, 14). NAPHIA. https://naphia.org/news/naphia-news/pet-insurance-offers-the-potential-of-7-billion-more-in-veterinary-spending-annually-new-avma-study-finds/
5. Facts + Statistics: Pet Ownership and Insurance. iii. https://www.iii.org/fact-statistic/facts-statistics-pet-ownership-and-insurance