Insurance, Legal & Taxes

Even Pet Groomers Need Company Attorneys

by Grooming Business in Box®

Unfortunately, many pet grooming business owners and owners of other service traders overlook forming and nurturing good working relationships with professionals. Your business needs them regardless of whether you think you need them. Effective handling of your legal and insurance needs can dramatically impact the success of your pet grooming business. Carrying the heavy workload of owner, manager and groomer can deprive you of the benefits derived from your professional working relationships.

If you are a new career seeker, it is never too early to make introductions with an insurance broker (notice we didn’t say “agent”) and an attorney. Every business needs adequate and complete insurance coverage and an attorney’s counsel to help you form your company and to be just a telephone call away as the need arises. You shouldn’t need an attorney often, but they are invaluable for the pet grooming business owner hiring employees, forming contracts and applying for business loans, and using pet care business forms of a legal nature.

An attorney who understands business affairs can save you dollars and protect your business with legal safeguards. You should have an attorney right from the start of your business. Don’t wait for an unfortunate situation to occur before finding an attorney. The importance of a good working relationship with one cannot be overstressed. Don’t be shy. They understand and admire your intent to create and protect a new business.

Be honest. Advise them you are working within a budget. Ask if they can do the work you require for a “project fee.” Don’t be shy and do not inquire about their fees. Ask them to advise you when a project exceeds an agreed budget. Sometimes you can assist them with the work and reduce their fees too. They understand. Enjoy the peace of mind that can come from knowing your attorney is just a call away should an unfortunate incident arise. Your attorney wants you to succeed.

You should discuss employment, business and personal liability issues, pet care liability, related business forms with legal implications (see below), and possibly tax planning with your Certified Public Accountant (CPA). Attorneys are helpful in reviewing and negotiating contracts and leases. Less than 1% of pet grooming business owners we surveyed asked an attorney familiar with employment law if their groomers hired as independent contractors were legally classified as such. Yikes!  ♦

Grooming Business Insurance

Operating a pet grooming business without proper and adequate is an uncalled-for risk. You care for beloved animals and are responsible for persons entering your commercial property, including pet owners, vendors, employees, and occasional drop-in visitors.

Some grooming business owners go to an “insurance agent” and are told they do not offer commercial business insurance for groomers. Other agents do sell business insurance covering common liabilities to all businesses. But how many grooming business owners ask if that also covers accidents to the pets they serve, including accidents that are actually the fault of groomers making mistakes? Few! Grooming business owners often overlook professional liability coverage. We recommend you consult with a business insurance broker, not an insurance agent.

Excerpt by Award-Winning Author Madeline Bright Ogle, Ph.D. From Problems to Profits in Pet Grooming

An insurance broker is different from an insurance agent. An agent works for one company while a broker can select from a wide range of insurance companies. This allows you to select fullest coverage for the lowest cost. Insurance companies are just beginning to understand the needs of pet grooming salons. I t is unlikely that an insurance agent can provide you with adequate coverage from one company. Get to know a competent broker in your area. Acquaint him with your business so he can design a policy unique to your needs. For years, some insurance companies have been reluctant to provide coverage for pet grooming salons. The reason is that salons did not have professionals standards, adequate staff training, or good hygiene. Following The Madson Management System will correct these deficiencies.
Copyright 1989, 1997, 2017 Madeline Bright Ogle All Rights Reserved

Insurance brokers are specializing in pet industry vendors. Others may be brokers but unfamiliar with the needs of pet care vendors. They may have never insured a pet care business before. Describe your business clearly to them so that they can also help derive your insurance needs. You must ensure all of your business property, including fire and theft. You must insure your liability for people on your business property. Now, what becomes more difficult is ensuring the valuable inventory of pets you care for each day. This is the tricky part, finding a company that provides adequate coverage for the loss of a pet. Potentially, a pet could be worth thousands of dollars in a lawsuit. In fact, it could be worth more, including damages when a pet is harmed or death resulting from negligence involving the pet care your business provides. Yes, like doctors, attorneys, and other professionals, the pet grooming business owner faces “malpractice,” and finding “malpractice insurance” for a pet grooming business is difficult without some good leads and a competent insurance broker. What we think of as malpractice is more readily understood as “professional liability.”

Here’s some assistance. We have been advised that the following companies are insuring pet grooming businesses. However, we do not guarantee that their coverage includes all the coverage you require, especially malpractice insurance. Let your insurance broker know that these businesses have provided coverage, at least in the past.
Travelers
Hartford

Insurance coverage is not always a legal requirement, but it is vital to own adequate insurance. Once you hire employees, you will need worker’s compensation insurance. Some states may require bonds too. Again, ask your insurance professional for assistance.

Minimize Your Risks

As a pet grooming business owner, you face pet care liability issues. You are liable for the services you provide. If you injure a pet, you are liable for a potential lawsuit. For that reason alone, an examination of every pet’s condition before you accept it for grooming should be the standard order of the day. Question the pet owner to see if the pet suffers any physical ailment or is under a veterinarian’s care. If the pet is under veterinary care, you must know if grooming could worsen the condition. If you have any doubt, require a written release from the veterinarian providing the care. Don’t be embarrassed to ask for this clearance. You are expressing sincere concern for the pet, and that is expected of the professional pet groomer. You never need business so badly that you accept risks, either.

Pre-existing health conditions, matted coats, allergies, aged pets, and disabled pets pose potential liability risks. In fact, skin ailments aggravated by grooming or grooming products are not uncommon. You must limit how much stress you will put a pet through to de-matt its coat, draw the line when necessary and advise the pet owner that it is in the pet’s interest to remove the coat instead of requiring it to endure the discomfort and aggravation of de-matting.

We highly recommend that you use a “Release and Hold Harmless Agreement” to protect your interests when grooming a pet that poses some risk. Of course, you may refuse services entirely, and a notice should be clearly posted in your business. However, where it is reasonable in your judgment to groom a pet, and even if you have a release from a veterinarian, it is a good idea to ask the pet owner to sign the Release and Hold Harmless Agreement. A sample is in the business book From Problems to Profits in Pet Grooming. Many groomers share their forms through social media. Beware! Take the form to your company attorney before using it. State laws vary; some states require specific clauses to be added to these forms meeting local and state laws. Otherwise, the form signed by your clients could be ineffective and end up offering no protection.

Remember, not all ailments are evident. A “trick knee” may never show itself until there is a problem with it. Interview your new customers and record the results, including health conditions on your records for each client and their pet(s). As a general rule of thumb, if you consider a pet to require your “special care,” you should have a signed release from its owner. If you know the pet is under veterinary care, there is no room for question; you should have a signed release form on file. Save all signed release forms for future reference too.

Another warning. Some pet groomers forget to ask regular clients, “Have there been any health conditions with your pet since your last visit?” The smart business owner asking this question minimizes their exposure to legal recourse should a problem occur with the pet while under their care. In 1998 there were legal cases where the Judge in each case expected that a pet care business owner would inquire about the CURRENT health condition of each pet before providing services. TAKE HEED! This is one of the most commonly overlooked procedures in the grooming industry. You are taking money for providing services, and therefore, in consumer law, you are expected to be a knowledgeable professional and, therefore, know it is important to verify that since the last grooming, there have been no changes in the pet’s health that might be affected by grooming. You can’t use the excuse that the pet owner should have informed you or you forgot. These excuses have been demonstrated in Court to have nil effect for the benefit of the business, which is expected to know better since he or she is charging fees.

Every grooming business needs insurance, but are specific types of coverage unique to pet groomers? Yes, and most groomers overlook this coverage. In fact, most insurance companies don’t offer them! You will hear insurance sales tell you there is liability coverage, but is it really for animals and not just people? In states where pet owners can sue for more than the replacement cost of their pets, do you have coverage for lawsuits seeking compensation for “pain and suffering” caused by the harm or loss of their pets in addition to the replacement of pets? I hope so! In some states, pain and suffering lawsuits can easily reach $50,000 or more.

If you aren’t working with an insurance agent or broker that specializes in pet grooming business insurance, your insurance quote may not include all of the elements recommended for complete professional coverage for a grooming business. Below is a list of elements we would expect for a commercial salon or shop, some of which would be included in a mobile grooming business, but of course, mobile groomers needed additional elements of coverage. Additional coverage elements not mentioned below may also be required, depending upon your location, contracts and agreements, codes of law, and other factors. Please inquire with your insurance professional about all insurance coverage you require.

Your insurance policy is likely to list most of the categories of coverage listed below, except those in red are of great importance. Most insurance companies do not provide Animal Floater or Professional Liability coverages unless they are specialists in grooming business coverage. To the best of our knowledge, only two companies currently provide those coverages, and they are made available to insurance brokers specializing in the pet care industry. Never assume you have these coverages; the odds are you don’t unless you work with insurance specialists in the grooming industry. Both of these coverages are essential in states that allow pet owners to seek damages and compensation beyond animal replacement costs should their pets be harmed or die as a result of your services or during their time in your care.

For example, a grooming business is struck by fire, and pets die. Your fire coverage may cover the building and contents, but what about pets? Fire coverage does not usually cover the pets beyond possibly the replacement cost of the pet victims. What if the fire was a result of your negligence? Fire coverage is not likely your negligence leading to a fire and resulting in pet victims, but professional liability might provide some relief. Many general policies not specifically written for pet groomers do not cover pets that escape your business. If these pets are permanently lost or killed, such as running into a street and being hit by a car, you may have a substantial lawsuit filed against you. You need animal floater and professional liability coverage. In fact, there have been incidents where escaping pets ran into the street and caused an accident between two or more cars. The grooming businesses were actually sued by the insurance companies providing auto insurance to the drivers.

• Coverage Limit Deductible
• Animal Floater
• Professional Liability (“malpractice”)
• General Liability
• Fire Legal Liability
• Medical Payment
• Accounts Receivable – Transit or Home
• Accounts Receivable – Your Premises
• Ordinance / Law Coverage
• Non-Owned / Hired Car Liability
• Valuable Papers
• Loss of Business Income
• Business Computer & Media
• Employee Dishonesty
• Money & Securities (Business)
• Glass
• Mobile Vehicle or Pick-up and Delivery Vehicle (if appropriate)

It may not be enjoyable to sit down and carefully study your insurance policies, but how else will you know you have the full coverage you require? We suggest you only work with insurance brokers specializing in the pet industry.   ♦

OSHA

Owners of one-person businesses are still subject to applicable Occupational Safety and Health Administration (O.S.H.A.) regulations. This misunderstanding is prevalent among pet grooming businesses where the owner and manager are also the pet groomer. We suggest you contact the U.S. Department of Labor, O.S.H.A. division, via their website at http://www.osha.gov. It is a very complete site.

Two of the key issues of OSHA affecting employee safety and well-being are 1) hazardous materials and 2) noise. Grooming involves both to some degree. Groomers store chemicals in addition to natural products in the form of various grooming supplies. You must have a list of ALL chemicals for an inspector, including a label for each container. Noise is certainly a side effect of grooming. Dryers, more dryers, clippers, and dogs barking all add to the noise, affecting employee health and stress levels. Fortunately, there are great improvements in grooming machinery, drastically reducing noise levels, including shop vacuums that nearly whisper. You will see more and more of these product improvements; take a look at the next trade show you attend. Wonderful! Even the dogs and cats you care for endure less stress in a more quiet environment.