Is Colorado’s Pet Sitting Law Another Insurance Quagmire Waiting to Unfold?

If it barks like a dog…

A new Colorado law that enables people to sit up to three pets without needing a license looks pretty much like just another piece of the growing gig economy.

People can sell their services though an app to others who have a pet or pets that need sitting without going to a full-fledged kennel or boarding facility.

And just like its ridesharing and rental property gig economy cousins, this new business segment will likely have a few growing pains — including the typical insurance issues that arise when someone takes the risk of running a business of any size.

Colorado recently updated the state’s Pet Animal Care Facilities Act to allow people to care for three or fewer pets without the licensing required to be carried by kennels or dog day care businesses.

One of the driving forces behind the change was dog care app provider Rover, which, much like Uber with ridesharing and Aribnb with rental properties, provides a virtual marketplace for would-be entrepreneurs.

Unlike the order of the process that unfolded when Uber and Airbnb were starting out, where insurance came far after those industries were established, requiring pet sitters to carry insurance was among the first issues being discussed.

However, for now, insurance requirements have largely been relegated to the dog house.

Additional homeowners insurance, general liability or some type of business insurance, none of that is required, according to Nick Fisher, program manager at the state Department of Agriculture, which oversees the Pet Animal Care Facilities Act and all it encompasses.

One reason is because insurance isn’t required for licensed pit sitting businesses either.

“Currently with pet animal facilities, we don’t really require they have to have insurance,” Fisher said. “That’s incumbent on the facility to do that.”

The preference is to avoid overregulating businesses, he said, adding that the department is focused on ensuring these businesses maintain at least the minimum standards for safety, cleanliness, having proper enclosures and other aspects of the physical facilities.

“We don’t get into people’s financial records or insurance records or anything,” Fisher said.

Having the benefit of having seen the swell of interest and insurance issues that Uber and Airbnb created, however, the topic of insurance was at the forefront of conversations when the folks at Rover first approached the state to change the laws to permit the firm to operate in Colorado, according to Fisher.

It was initially proposed that the company would be responsible for requiring people offering pet sitting services through apps like Rover to have proper insurance. The idea was that the app maker would provide $25,000 of insurance for each person who was registered, and the company would provide additional liability, according to Fisher.

That turned out to be easier said than done.

Creating insurance regulations, and hiring investigators and others to ensure the regulations are followed and that bad actors are dissuaded, turns out to be a costly prospect.

Fisher said estimates showed it could cost taxpayers up to $2 billion.

“As they went along, they realized we would have had to create a whole new program for it,” he said.

As a bill to update the law to enable pet sitting wended its way through the legislature, the idea of having a fiscal note attached to it made its prospects of passing look much less promising, so the insurance aspect was dropped and the number of pets an unlicensed person could sit was limited to three, Fisher said.

A spokeswoman for Rover declined to comment for this article, but pointed to a section of the company’s website containing information about “Premium Insurance.”

The coverages listed are for “Owner Pets,” valid for injuries to the pet owner’s pet in the sitter’s care, “Sitter or Dog Walker Pets,” valid for injuries to the sitter’s resident pet as a result of contact with the pet owner’s pet, and “General Liability,” for claims for bodily injury to a person other than the sitter or pet owner.

The webpage details claim filing procedures and coverage exceptions, which include damage to the sitter’s personal property, injuries to the sitter, treatment costs for medical or veterinary bills as a result of pet illness and pet sitting bookings made outside Rover.

But it doesn’t include information about the carrier, limits or premium costs.

Just because Rover appears to be encouraging insurance coverage, doesn’t mean people will buy it.

And that means someone like Carole Walker, executive director of the Rocky Mountain Insurance Information Association, may eventually have to go around educating Coloradans who are pet sitting to earn a few extra bucks on the importance of insurance.

Just like she did when the app-based ridesharing and vacation rental crazes cropped up.

“If you’re the pet sitter and you’re taking dogs into your home, that raises issues like what kind of liability do you have,” Walker said.

When Uber came to her state and others, local insurance associations often took it upon themselves to put out messages to the public that personal auto insurance doesn’t cover a driver who is conducting ridesharing activities. It was a similar situation when Airbnb came along.

Walker said she hasn’t yet heard concerns raised over the new pet sitting law by RMIIA’s homeowners insurer members, but she is already on point with the message that consumers must consider the risks when running a pet sitting business.

“Any small business that you’re running out of your home, you need to look at separate business insurance for that,” she said. “In this shared economy, as we’re just trading out services and starting out businesses though apps and online, we need to understand that there are insurance consequences that affect you.”

Walker and her association counterparts in other states may find themselves pretty busy if they feel compelled to get the message out about pet sitting as a gig.

Pet services are growing tremendously, according to the American Pet Products Association.

The pet services category was $5.76 billion last year, which includes grooming, pet sitting, boarding, walking, yard services and training.

The services sector of the pet industry is expected to experience the biggest growth next year as well.

“As people increasingly treat their pet like family members it makes sense that interest in the professional services, such as pet sitting, offering quality care for our canine companions is on the rise as well,” Tierra Bonaldi, with the APPA said. “We certainly have taken note of the increased popularity of Rover.com specifically and all the news surrounding it and would say that it appears to be hitting the pet space with tremendous acceptance and recognition.”