2016 Pool Service Insurance Claims – Lesson Learned

The year in claims

We have no doubt that our members are some of the best pool service companies in the country. You can eat, breathe and sleep safety measures but even the best in the business occasionally have accidents. When it comes to avoiding lawsuits, knowledge is power. What’s critical for your business is to make sure that knowledge doesn’t come the hard way.

Here are some of the insurance claims filed this year, and tips to avoid them happening to you:

• Commercial Apartment complex: Routine weekly service was performed to check pool equipment was functioning properly and water chemistry was in line. All equipment is housed in a standalone equipment room, to be clear there was no equipment repair performed. Later that day a gas leak from the heater caused an explosion injuring swimmers in the Spa close to the equipment room. The injured parties filed a lawsuit against the property management company, the property owners, the service company and the company who installed the equipment.

There was not much our member could have done to avoid this, sometimes freak accidents happen and that’s why it’s important to carry insurance. What is important to remember if you find yourself in a similar situation, don’t admit fault and remember all of the other parties being sued are trying to pin it on you. Be cautious of that when making statements and make sure you call Inszone right away to discuss.

• Residential pool: This is a new account for this member, homeowner requested they clean the scale off of the glass tile after the first service. After the cleaning was complete, the homeowner alleged the tile was damaged because of the cleaning and demanded it be replaced.

Keep in mind this is 15-year old tile, it will have cracks, chips and be discolored in places. Looks like the homeowner was trying to get a free remodel job out of our member. Be mindful of this when taking on new accounts with existing issues. Utilize a service agreement, document with photos and have the customer sign to the fact these are the pre-existing conditions you aren’t going to be held responsible for. Since tile cleaning is outside the scope of your normal service, we also recommend you utilize a separate agreement for the specialized service requested.

Remember, as soon as you work on “damaged” areas it then becomes your work. Every insurance company considers this faulty workmanship which will not be covered. They have no duty to defend you in court if a claim isn’t covered, even when it’s a frivolous case like this. Call your Inszone agent to make sure you have the enhancement added to your CPA policy.

• Residential pool: Member was draining pool and the septic tank and sewer systems were not clearly marked. Pool water was drained into the septic tank for a short period of time which caused toilet overflow and water damage to the inside of the home. Homeowners’ insurance company demanded member pay for the cost of repair.

Moral of this story is to take your time when dealing with displacing water. If it’s not clear don’t guess, the damages add up quick for a small mistake of only a couple minutes. Also remember with cases like these you’re normally up against the homeowner insurance company’s team of lawyers, not just your customer and cousin Vinny fresh out of law school.

• Residential pool: Member performs the regular service, homeowner hired another company to remodel the pool. Homeowner requested the member drain the pool to prepare for the remodel contractors coming in. The remodel contractors had unforeseen delays with the materials and the pool sat drained for over a week. It rained and the pool floated/popped out of the ground. Member received demand for cost of repairs from the remodel contractor’s insurance company since he was the one who drained the pool.

There are a variety of liabilities with a drained pool in a backyard for any extended period of time. Aside from the potential to pop up someone could fall in and badly injure themselves very easily (especially children). Anytime you drain a pool make sure a service agreement is used specifically for this reason. A signature agreeing you won’t be responsible for damages or injuries due to a drained pool is worth its weight in gold.

• Residential pool: Member takes on a new account, the pool was recently built and another company did the start up. A month later, homeowner has a pool party and guest’s feet are cut on plaster which has become coarse and sharp. Homeowner blames it on the member stating the water chemistry was what caused the plaster to deteriorate. Homeowner then terminates the service company, pays another company to re-plaster the pool and demands the remodel bill be paid by the service company after work has been completed.

Similar to the previous example of a new account, utilize a service agreement prior and inspect/document the pool prior to taking on the account. Keep a well-maintained log listing chemicals used, water chemistry, etc… week after week. This type of situation could easily happen with a construction defect as well, the hold harmless agreement in a service contract will help protect you should that happen.

Pat Grignon

Vice President

(p) 916.503.6359

(e) pat@capoolassociation.com