Stay-at-home orders during COVID-19 have kept many cooped up at home along with their furry family member. During this time, many people also decided to add to their households, causing an unprecedented wave in dog adoptions across the U.S.

That upsurge in the number of people opting to become dog owners during the coronavirus lockdowns will likely cause an increase in the costs of bodily injury claims due to dog bites, says Canopius, a global specialty (re)insurer.

Nuclear verdicts, or social inflation, has troubled the insurance industry for years and was arguably the most significant threat facing insurers until the COVID-19 health crisis. Social inflation is often associated with significant auto or commercial claims. Dog bites, however, have been a largely unreported facet of social inflation despite increasing claims costs, says Canopius.

“The appeal of canine companionship has experienced an unprecedented boom during lockdown. Many owners assume their home insurance will cover any associated liability, but with ever-increasing medical and legal costs due to social inflation, more and more insurers are excluding all or certain breeds of dogs,” says Andrew Fowles, deputy head of delegated authorities and president of Canopius US Insurance.

More than 4 million dog bites occur each year in the U.S., with associated liability claims totaling $797 million in 2019 — an increase of 134% since 2003, Canopius notes. When considering that New York and Los Angeles saw a 70% increase in pet adoption during the lockdown, with fostering in some cities up by 90%, Canapoius expects dog bite claims to rise for 2020.

“A perfect storm of simultaneously-surging costs and frequency is therefore becoming evident,” Fowles adds, “and giving rise to a specialist standalone market to indemnify dog owners should their pet cause harm or injury to others.”

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