Jackie Bougatsas from Wallace Risk Insurance shares two examples of typical claims made against pest managers, with recommendations on how to avoid these kinds of situations.

Wallace Risk Solutions was due to host the inaugural Talking Inspections seminar on March 20, 2020, however, due to COVID-19 it was postponed.

Part of the day was devoted to claims – sharing information with pest managers about the typical kinds of claims we see here at Wallace Risk Solutions, the reasons behind them, and what we are doing as an insurer to help reduce the frequency of them. It was planned to be an educational session where pest inspectors would be able learn how to avoid common pitfalls of the job, ones that have potentially serious consequences.

We thought we would share two of the real-life case studies we had prepared for the day with you here.

Allegation 1:

Claimant alleges termite damage was present and not noted by the pest inspector and failed to note a significant termite infestation at the time of inspection.

Amount Originally Claimed:


Final Amount Settled:

$170,000 – (actual costs of repair)

Third Party Cost i.e. Lawyers/ Experts:



• Initially the pest inspector’s prospects of defence were good on the basis of:

1) The claimants did not follow the inspector’s recommendation to treat the property to prevent termites from infesting;

2) From the outset, claimants had not had the damage assessed (instead only requested details of the inspector’s insurer so that rectification works could be carried out).

• Once expert opinion was sought, the pest inspector’s prospects of success declined significantly on the basis of:

1) Expert opined the termites would have been in the house for approximately a year at time of the inspector’s inspection;

2) The pest inspector did not comply with requirements for ‘tapping’ or ‘sounding’ the walls and timbers.


• Avoid statements being put in reports i.e. ‘the subject property is structurally sound’.

Such a definitive statement cannot normally be made as only about half the property is visible to make such a determination. Many parts of the structure including foundations, footings, wall framing and other structural elements are often concealed, obstructed or not readily accessible at the time of inspection.

Any definitive statement that cannot be substantiated must be avoided as it makes it extremely difficult to defend in the event of a claim.

• All communication about the treatment of the dwelling should be in writing.

Allegation 2:

Claimant alleged the pest manager’s internal spray left noticeable run-off streaks to numerous walls inside the property, affecting paintwork.

Amount Claimed:

None demanded

Final Amount Settled:

$4000 – amount offered

Third Party Cost i.e. Lawyers/ Experts:



• On balance, the pest manager’s liability was difficult to dispute but before the insurer agreed to settle, the insurer recommended that the pest manager give consideration to the following:

1) Whether the problem had been caused by the pest manager’s application of the product, or was it a common problem with the product generally?

2) Had a quote has been obtained to fix the problem?

3) Whether the pest manager had agreed that the walls had been damaged by the spray (i.e. caused by streaks)?

4) Was this an uncommon event in the pest manager’s experience?

5) The pest manager’s knowledge on how/why it may have occurred in this particular instance?


• Possible prevention tips:

1) Ensure chemical is mixed correctly to the manufacturer’s recommendation;

2) Avoid excessive spraying to walls;

3) Ensure backpack sprayer does not contain residue from the application of other chemicals.

In the above-mentioned cases the insurer paid the agreed amounts to the claimants and also paid the third-party costs (lawyers and experts).

So how did these outcomes affect the pest managers’ premiums? In the first case study, the insured was offered renewal terms with an increased premium and excess. In the second case study the insured was offered renewal with no change to premium or excess. Insurers don’t only look at the amount that is claimed, they also take into account the frequency of these claims occurring when determining a pest manager’s premium and excess amounts.

These are just two examples of the kinds of claims we are seeing, which we hope provide pest managers with a few pointers on how to protect themselves when undertaking their everyday work.

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