BONDING AND INSURANCE
A large number of quality professional pet sitters are not bonded or insured. Insurance is very expensive and bonding is worthless unless you have employees. Being bonded or having insurance does not guarantee quality or that customers will use you. Your own reputation is the best guarantee of quality. This page will answer most of your questions about bonding and insurance. Anyway, here is what I have dug up. Better print it out as it is long.
NOTE: To get the insurance and bonding that is talked about on this page, you MUST be a member of PSI, PSA, or NAPPS, NO EXCEPTIONS.
BONDING - THE MYTH EXPLODED
In regards to bonding, here is what I found out after much discussion with Western Surety Bonding. A bond for a sole proprietorship that has NO employees is totally WORTHLESS. According to Western Surety, "A bond protects the employer from dishonest acts (theft) caused by an employee or IC (Independent Contractor) of the employer. It does absolutely nothing for the pet sitting client." I suggest you read this statement 3 times.
Here is an interesting loop-hole: If you bond an IC, which bonding companies will usually allow, the IRS will automatically consider the IC as an employee of your company and you then have to pay for Workmen's Comp Insurance and take out Federal and State withholding taxes. NEVER bond an IC or you will be dealing with the IRS and your state's tax and insurance commissions.
A sole proprietor will not do dishonest acts against themselves. You would not steal from a client's home, but an employee might. That is why you might have a bond. This is not a performance bond. You are not roofing their home, building an extra room on their home, or paving their driveway. You are caring for their animals. A bond is not an insurance policy nor is it paid out like one. You, the employer and not the client, must file the claim with the bonding company. For a bond to be paid the covered person must be arrested, tried, convicted and sentenced. Then and only then will the bond be paid. Then the bonding company goes after the person that they bonded to recover their losses. If you paid out the money to the bonding company for yourself, then for the bond to be paid....(see above). You have spent money foolishly for something that you will never use.
When a prospective client asks me about bonding I explain how a bond works and why we don't have bonding. Then they understand and we go on from there. I have only lost one client because I wasn't bonded and frankly, I wouldn't have accepted the job. The wife was extremely paranoid and I feel that they were looking for a way to scam the system. I walked out on them. Some sitters feel that instead of taking a minute to explain bonding and why they don't have it, they would rather pay out the $150 a year and not worry about it. (Stupidity and laziness constantly keeps creeping in.) The only one that makes out on a bond is the bonding company. They don't even do a background check on who they are covering. They just collect the fee. You can actually hire a convicted thief on parole and the bonding company won't check.
INSURANCE FOR PETSITTERS - MAYBE
Business insurance to cover your equipment and property is a good idea. Pet sitting insurance is not necessarily required however, it may be a good idea. If you are not clumsy and have waivers in your contract, you can get by without insurance. Most regular insurance agents have no idea what Care, Custody, and Control is. You need to call the company underwriters for the insurance company you are interested in yourself. Do not allow the agent to call them. If you must go to his office for the call, fine. Then you personally should talk to the underwriting department. I have contacted many companies and they all consider me a groomer until I tell them what I do. When they find out that the owner will not be on the premises, they will not offer coverage. A groomer doesn't have to worry about the 3 C's, so pet sitting insurance doesn't apply.
The cost for insurance coverage varies depending on your annual A/R from pet sitting. The minimum premium is around $325/year and you must be a member of PSI, NAPPS, or PSA to get it. If you don't want to spend the high annual dues to one of these organizations, then you can't get pet sitting insurance. There is a $1 million coverage for accidental damage, but there is also a $250 deductible. In most states, the homeowner's insurance is primary carrier because the sitter has permission to be in the home. Therefor the homeowner's insurance carrier will pay and you will be liable for the deductable (usually $250) which is the same deductable to your pet sitting insurance company so you can't send in the claim. You have now paid out $325 for something that you probably will never ever use. If someone wants to go after you in court for damages, then the insurance might be a good thing if the claim is substantial. It is up to you.
Health and accident insurance is not available unless you contact Blue Cross or some other insurance company directly and "that ain't cheap". PSI does have a limited Health and Accident insurance as a group plan through a major national insurance company, but to date, nothing has developed that is affordable. Since I am retired military, We have Tri-Care For Life for Janis, which is only available to retired military, and I go to the VA. This gives Janis and I unbelievable coverage at a fraction of the cost of private insurance.
Hope this helps you out. If you have any other questions, feel free to contact me. Good luck and happy sitting.
Doug Foote