Business | PPC107 June 2022

Peter Knowles, Director at animal-related industries insurance broker Cliverton, looks at the opportunities of diversifying pest control services and the importance of managing the associated risks.

To say that the past year has been trying and tiresome would be somewhat of an understatement.

The vast majority of companies hunkered down to survive the volatile economic conditions or reinvigorated their business model to seize new opportunities, with very few emerging from the pandemic unscathed and unchanged.

For small business owners, an entrepreneurial spirit, industry insight, and business acumen put them in the advantageous position of adapting swiftly to a changing market.

The pandemic was indeed a time fraught with worry about health concerns and financial hardship, but it was also a time of resilience. The number of businesses that diversified their activities was evidence of this.

From distilleries turning their hand to producing sanitisers to restaurants creating ‘at-home’ kits for their most popular dishes, almost every industry saw business owners get creative to meet evolving needs and bolster their compromised income.

The pest control sector was no exception.

Pest control professionals were deemed key workers during the pandemic after the industry lobbied local MPs for recognition that pest management services were essential.

Though this classification provided some stability, the industry still felt the economic squeeze keenly.

In response, pest control professionals diversified their operations, widening their offering to include services such as cleaning and disinfection, driven by the demand for increased hygiene and sanitisation.

Risky business

With any new venture comes new risks. It is imperative that pest control professionals who have branched out into other services, or are thinking of doing so, address the gaps in their knowledge and potential gaps in cover.

This can be achieved by seeking expert advice from industry specialists and obtaining comprehensive insurance that adequately meets the evolved needs of the company.

Pest control professionals should also take the opportunity to check the full extent of what they are covered for. 

Pest control comes with a myriad of risks: damage to properties being treated, use of pesticides, working at height, disposal of trade waste, use of specialist equipment like falconry or firearms. The list goes on. 

Some insurers will automatically provide insurance for the use of rifles and shotguns and include public liability for the use of birds of prey for pest and vermin control.

Seeking public liability cover for third party injury or property damage caused by negligence whilst carrying out pest control service may also be a prudent business decision.

It is worth noting that often insurers offer discounts for being a member of professional bodies - like BPCA.

By becoming a member of such an organisation, pest control professionals can underline their commitment to upholding professional standards to prospective clients and benefit from lower premiums.

Businesses adapting their offering for a new purpose should also check if they need to comply with different regulations and put measures in place to ensure they are effectively managing the risks of both the core and extended services.

Post-pandemic outlook

Some pest control professionals may have seen the expansion of services as a stopgap until the effects of the pandemic dissipated and ‘business as usual’ resumed.

According to the Office of National Statistics’ latest ‘Business insights and impact on the UK economy’ report, the percentage of businesses trading in mid-August 2021 was up to 90%, a significant improvement from the 71% reported in January 2021.

However, the road to recovery is set to be long and arduous. 

When asked how their turnover compared with normal expectations for this time of year, the percentage of businesses reporting a decrease in turnover was 30%.

Furthermore, 37% of businesses reported less than three months’ cash reserves.

Though many businesses are returning to a state of normality, finding sustainable solutions to the new economic environment looks to be a challenge for some time. 

Therefore, many businesses – pest controllers included – may continue to offer extended services on a more permanent basis or longer than first intended or expand their offerings. 

Whether the extension of services is planned as a temporary or long-term measure, pest control professionals need to ensure that shrewd business planning, prudent risk management, and clarification of any insurance or regulatory requirements are established from the outset.

For those who have already commenced operations, retrospective business mapping and contingency planning can help mitigate against any ensuing risks and future-proof the business.

Failure to take such action could be a costly oversight that spells the end of the new venture and the core business.

After weathering the storm of the pandemic, this is the last thing pest controllers – or indeed the industry – wishes to face.

Insurance for pest companies

Cliverton offers discounted insurance for BPCA members. Make contact today to talk about all things pest control insurance.

cliverton.co.uk/policies/pest-control-insurance
01328 857 921

Source: PPC107