In a 1954 film entitled "Naked Jungle," Charlton Heston plays a plantation owner in a remote jungle of South America who does battle with a miles-long siege of red army ants. Most of the film keeps the audience in edge-of-the-seat suspense, anticipating the arrival of the deadly creatures bent upon destroying all of Heston's property, not to mention anything and anyone they happen to come upon en route. In the end, Heston defeats the army ants, but only at the cost of losing his entire plantation and personal fortune.
While it would probably, and hopefully, be an exaggeration to say that we face a fate similar to Heston's, this summer could bring swarms and armies of insects in numbers the likes of which we have not seen in the past. The culprit, of course, is the dreaded El Nino.
The El Nino phenomenon occurs when Pacific Ocean waters naturally warm off the coast of South America. It affects weather patterns--as we have unfortunately seen. El Nino has already brought tornadoes, floods and drought to Americans this past winter. What does it have in store for us this summer?
Bugs. And the problem is going to be a two-fold one for independent agents. Agents' clients who are homeowners are likely to experience infestations of termites that are not covered under the typical homeowners policy. And agents with clients who are pest control operators will have to inform them of the additional exposures they might face because of the little, yet very hungry critters.
It's not just termites. The smart money says that this summer, El Nino very likely will produce an unusually high number of uninvited guests such as flies, ticks and mosquitoes. The Entomological Society of America, which represents 7,500 insect-studying scientists, has issued its first-ever warning. "Moderate winter temperatures resulting from El Nino have produced ideal overwintering conditions, favorable to higher-than-normal survival rates in hibernating insects," the warning said.
But what about termites? In fact, the traditional homeowners policy excludes damage from subterranean pests, such as many breeds of termites. The independent insurance agent with a substantial book of homeowners clients should know to inform his/her insureds of the personal exposure they face should the termite terror become out of control. Even more important, the agent should be able to inform these homeowners clients of the importance of making certain that the pest control firms or termite specialists they employ are properly insured.
"Traditional termite infestation areas have not dried out since the fall and the North has not gone into the deep freeze," says Dan Troge, underwriter at The Brownyard Group, a major insurance broker and program administrator. Troge cites the opinion of Dr. Nan-Yo Su, an entomology professor at the University of Florida, who points out that some states that are usually only marginally affected by termites, such as South Dakota, are sure to see increased termite damage. And places such as Georgia or the Carolinas, where the bugs usually die in winter, may experience year-round termites.
Troge says that if termite infestation is caught early, most homes can be saved with minimal damage, as long as the invaders aren't Formosan termites, which come from Asia and are extremely resistant to pesticides and can number in the millions with a single colony that can stretch a city block. Some of these termites have been known to munch through concrete to get to the desired wood dinner.
Entomologists say that Formosan termites don't like to venture north of 32.5 degrees latitude--about Savannah, Georgia, or El Paso, Texas; but that could change if global temperatures rise. Entomologists say also that the less fearsome subterranean termites have caused problems for New York, where higher temperatures, beginning in January, allowed the pests to remain close to the earth's surface during months when the cold usually forces them to go below ground. The result has been an extended breeding season and heavy swarming.
While there is no danger in the biblical sense--no plagues of frogs and locusts--exterminator bills can run into the thousands of dollars for a single home. Real estate deals can fall apart. Renovation or new construction projects can suffer delays. And then there are the environmental restrictions on the types of pesticides that can be used to get rid of the problem, especially over the long-term.
Since most homeowners insurance coverage does not provide protection for underground infestation, the only recourse that a home owner has is to make certain that the pest control operator employed is properly covered, according to Troge. "Pest control operator insurance must be tailored to fit the pest management termite specialist," he says. "Some companies sub-limit termite and others exclude certain species. The key to proper termite coverage is to have an insurer which provides wood destroying organism inspection and does not have sub-limits for termite damage."
Troge says that the Brownyard pest control programs have been designed especially for the pest control industry, and he says also that they are intentionally the broadest commercially available policies on the market. Included is a state-of-the-art general liability policy for the established pest control operator who needs and appreciates all the "bells and whistles," such as: sudden and accidental pollution, automobile pollution and transit coverage, among other things.
Dan Reardon, underwriter at Secure Insurance, located in West Lawn, Pennsylvania, also specialists in providing coverage for pest control operators, says that the insurance market is currently "soft" for this type of exposure. "There are 10 or 12 companies out there that offer products. But, as always, the key is to read what is being offered and make an informed decision."
As for El Nino, Reardon says that there is little need to panic, at least from the insurance standpoint. "I don't see El Nino changing the way insurance companies write pest control operators. Most policies are currently based on negligence. I don't see that changing regardless of the El Nino effect."
But El Nino or not, Troge says that pest control operators are a special breed of risk and need to be dealt with by specifically gearing programs to their needs. Julianne McNeil of the North Carolina-based JMI Associates, describes how her firm wanted to offer pest control operators in the state and the North Carolina Pest Control Association a program that would satisfy members' needs.
Working with Troge, she says, her firm was able to put together a program that addresses difficult-to-place exposures, such as transporting pesticides and herbicides from job sites in company vehicles.
For the small agency with pest control operators listed among its book of business, dealing with such complex exposures can present errors and omissions dangers. Seeking out specialists, especially with the El Nino threat, might be a good idea. *
©COPYRIGHT: The Rough Notes Magazine, 1998