Home Insurance and Reinsurance Innovative Bedbug Insurance offered by Lloyd’s and AON

Innovative Bedbug Insurance offered by Lloyd’s and AON

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The growing bedbug problem affecting even some of the world’s top tourist destinations is likely to put the dampeners on many a summer vacation this year.

In response to the parasite’s resurgence, Lloyd’s underwriters have teamed up with insurance broker Aon and Global Excess Partners, an innovator in new insurance products, to develop a comprehensive bedbug insurance solution for travellers and the hospitality industry.

Sleep tight: Don’t let the bedbugs bite

If you thought bedbugs were a thing of the past, or just something you say to your children at bedtime, you would be wrong.

Bedbug infestations are on the rise and they are causing hotel owners, landlords and businesses a major problem.

A recent study from the National Pest Management Association (NPMA) and the University of Kentucky confirmed what many pest management professionals had long suspected –that bedbugs are back in a very big way.

“Bedbugs have made an astounding resurgence in recent years, ” says Missy Henriksen, of the NPMA, which recently launched a website dedicated to bedbugs. “In fact, according to a recent survey by the NPMA, one in five Americans have had an infestation or know someone who has encountered bed bugs at home or in a hotel.”

Critters on the move

Bedbug travel tips from Terminix:

  • · Check hotel headboards, mattresses and box springs for bedbugs and dark blood spots.
  • · Hang all clothing. Leave nothing lying on the bed or furniture.
  • · Avoid unpacking clothing and storing your clothing in the hotel’s furniture drawers.
  • · Store baggage on a luggage rack as far from the bed as possible.
  • · Vacuum suitcases when returning home, and immediately wash clothing in hot water.
  • · If you suspect your hotel has bedbugs, ask for a change of rooms.

Understandably the growing bedbug problem has people and business concerned.

High levels of infestations have been reported in the US and Europe. Hotels and public spaces in major cities like London and New York are reported to be in the grip of a bedbug infestation with New York topping the list.

“Epidemic is perhaps too strong, but bedbugs are certainly an area of growing concern, ” said Al Tobin of Aon. “Hotels have had to shut off blocks of rooms while they deal with bedbug infestations, potentially costing millions of dollars in lost revenues for larger hotel chains.”

While the majority of cases of bedbug infestation are in hotels, the blood sucking insects are also found in hospitals, cinemas, public transport and university dormitories.

Sleep easy insurance cover

Lloyd’s coverholder Global Excess Partners and Aon have come up with a novel bedbug insurance solution for hotels, landlords, corporate businesses and travellers. They have teamed up with pest control company Terminix in the US to combine insurance coverage with specialist pest treatment.

Previously, the cost of bed bug elimination and replacement of infested property was excluded in property insurance policies, said Tobin. Only hotels with loss of attraction coverage on their policies had any protection for lost business resulting from taking rooms out of service, he added.

“This is a comprehensive insurance product for bed bug infestation and a creative response from the private sector to address a growing national issue, “ said Tobin. “Lloyd’s has been fast to respond with this innovative solution, ” he added.

The bedbug insurance policy will cover lost revenue resulting from treating rooms, as well as paying for the cost of eliminating the infestation, said Tobin. The cover can be purchased by individual property owners or large corporates, such as hotels or cinema chains.

Don’t forget to pack your bedbugs

The insurance policy can also cover business or leisure travellers against the risk of bringing bedbugs home from a conference or overnight stay.

“Most people don’t realise that they can bring bedbugs back from a hotel stay when on a business trip and infest their home, ” said Tobin. “The policy can be sold as a corporate travel coverage or to individual travellers as an add-on to their travel insurance.”

A parasite to rival cockroaches

Unfortunately, bed bugs are the most difficult pest to treat, more so than cockroaches, ants and termites. Bedbugs are also very elusive –they are not only found in beds-and very hardy-they can live for a year or more without eating and can withstand a wide range of temperatures from nearly freezing to 50 degrees Celsius.

They are not known to transmit disease to humans, but their bites leave itchy welts and can cause an allergic reaction.

Bedbugs have a remarkable ability to “hitchhike, ” says Michael Potter, professor and urban entomologist at the University of Kentucky and author of the NPMA study.

Infestations are showing up in all the same places they did in the 1920s and 1930s, but times have changed, he says.

“We are in uncharted waters. There will be new challenges this time around including unprecedented movement of people from across town and around the globe; more clutter and belongings in which bugs can hide; less potent insecticides; and a mindset today that when someone is harmed they should sue.”

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