SMALL BUGSBIG BITE OUT OFPROFITS

INTRODUCTION

Bedbug infestation is one problem wheresleeping on it won’t help. In recentmonths, the news media wrote orbroadcast numerous stories aboutexposure to bedbugs. They’ve reportedinfestations forcing prominent retailcompanies to close stores for pesticidetreatments. The Brooklyn, New YorkDistrict Attorney’s office experienced abedbug outbreak, as did a national movietheater chain. The Internal RevenueService discovered bedbugs in theiroffices in Philadelphia and Covington,KY. The list of locations afflicted withbedbugs to varying degrees is endless, andthat’s the point. Bedbugs may be found instores, movie theaters, restaurants,daycare centers, schools, hotels, offices,hospitals, airports, cruise ships, trainsand buses and airplanes and single familyhomes. No location is immune topotential bedbug infestation.

BACKGROUND ONBEDBUGS

So what is a bedbug? How does it feedand survive? How does it travel? Whatare the signs bedbugs are present? Howcan we get rid of them?

A bedbug is a small, apple seed-sized, flat,reddish-brown insect. A bedbug is aparasite, biting humans and feeding offour blood. A fully fed bedbug can swell tothree times its normal size, dramaticallychanging in appearance to the pointwhere it may look like a different insect.It can survive months between feedings.

YOU SHOULD KNOWSTRATEGIC OUTCOMES PRACTICE

April 2011 – Issue 20 www.willis.com

Bedbugs are attracted by our warmth and thepresence of carbon dioxide given off by ourrespiration. Typically they live about 10months, but some species can live longer. Onthe positive side, these bugs are not known totransmit diseases to humans; however, theirbites can cause allergic reactions in somepeople.

Bedbugs do not fly; they crawl and rely onpeople to transport them from place to place,frequently hitching a ride on clothing, inluggage, backpacks and briefcases. They alsohide in furniture, such as headboards, nightstands and mattresses, folded clothes, seamsof walls, carpeting and other fairly darklocations. The transport of furniture orclothing, whether by a retailer selling newproducts or owned by private individuals, canbe the means of moving bedbugs from oneplace to another.

IDENTIFYING THE PRESENCE OFBEDBUGS

Usually, the first sign of bedbugs is their bitemarks appearing on a person’s body, typicallyaround the face, neck, arms and back. Othersigns include rusty red or brown or dark spotson mattresses, sheets and pillows or clothmaterials and the presence of exoskeletons.

This issue of You Should Know isone in a series of brief articlesdesigned to keep our clientsabreast of significant breakingnews in the claim and loss controlareas that could affect theiroperations or exposures.Additional information about thisand other topics can be obtainedfrom your Regional StrategicOutcomes Practice Associate.

GETTING RID OF BEDBUGS

Bedbugs are resilient creatures. They are resistantto many pesticides. Common eradication andtreatment practices include:

n The employment of licensed pestmanagement companies to apply chemicaltreatments

n Judicious use of effective chemical pesticides,usually requiring several treatments

n Using non-chemical pesticides, such asdiatomaceous earth

n Removal of clutter where bedbugs can hiden Applying heat treatment (steamers)n Vacuuming (mattresses, carpeting,

upholstered furniture, curtains) frequentlyn Sealing cracks and crevices to remove hiding

places1

LEGAL IMPACT ON LANDLORDS

Last year, Governor David Patterson of New Yorksigned the Bedbug Disclosure Act, which requireslandlords to disclose to a potential tenant thehistory of bedbugs in the building for the previous12 months. Other legislation is being introduced inthe New York Assembly to give New Yorkresidents a tax credit if they were forced to replacefurniture infested with bedbugs. The lawsaddressing bedbug infestation is relativelyundeveloped across the nation, but it is growing.Legislation, mostly focusing on landlords, wasintroduced in CT, NJ and OH. In Maine, Title 14M.R. S.A. went into effect on July 11, 2010. Thislaw states that landlords will inspect and treatfacilities if the presence of bedbugs is suspected.We can reasonably expect legislation addressingbedbug infestation to continue to expand in manystates.

INSURANCEIMPLICATIONS

The jury is still out on how the law and insurancewill respond to the various situations that may

arise. Obviously, the application of the lawwill vary from state to state and jurisdictionto jurisdiction. There is discussion of newlegislation being passed to address thissituation.  For example, New York State isconsidering legislation requiring insurancecompanies to offer their insureds somecoverage to address this problem, but no onecan predict the direction this will take.

From the first-party property insuranceperspective, whether or not the presence ofbedbugs is an occurrence of loss and damageunder a policy is a serious question.  Also,most commercial policies have a vermin andinsect exclusion.  The insurers tend to look atthese outbreaks as “maintenance” situationsand not subject to coverage. From the liabilityand workers’ compensation perspective,insurers will need to respond to claims andsuits that are sure to follow.

CONCLUSION

So, don’t sleep on this problem – develop aplan. Create a plan that will addressremediation and removal of these insects, aswell as dealing with potential issues involvingyour employees, customers and visitors.There are consultants and contractors whocan assist you with developing a strategy forremediation and managing the various issuesassociated with this problem.

HELPFUL WEBSITES

n University of Kentucky, College ofAgriculture website

n National Pest ManagementAssociation website

n U.S. Centers for Disease Control andPrevention website

n U.S. Environmental ProtectionAgency website

n State and local governments, see localwebsites

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CONTACTS

For further information on this pesky issue and how to protect your business, please contactyour local Willis Client Advocate®, your Willis Claim or Risk Consultant or:

James FosterStrategic Outcomes PracticeCasualty Risk Control732 239 8400jim.foster@willis.com

Jeff SiebertStrategic Outcomes Practice National Director Casualty Claims757 628 2304jeff.seibert@willis.com

For on other claim and loss prevention issues, please visit willis.com.

The observations, comments and suggestions we have made in this publication are advisory and are not

intended nor should they be taken as legal advice. Please contact your own legal adviser for an analysis of

your specific facts and circumstances.

1 Taken from the Joint Statement on Bedbug Control in the United States from the U.S.Centers for Disease Control and Prevention (CDC) and the U.S. Environmental ProtectionAgency

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