A home health care agency provides an incredible value to a community it serves. Such service makes it possible for the elderly, and other community members who need it, to receive medical services and emotional support. The caregivers help with administering medicine, tracking medical appointments, and anything else that a patient might need.
As we all know, insurance is a must-have expense for every business owner. Businesses rely on different policies to keep them away from having to pay thousands of dollars of out of pocket expenses to cover common (and not so common) business-related incidents such as liability and property claims.
Let us ask you this –
When evaluating insurance quotes, have you ever been tempted to go with the cheapest one?
Of course, you have! After all, careful budgeting is an essential tool to help your business grow and succeed. So why is choosing the cheapest policy not always the best move?
A business that provides home health care aide services like yourself needs to be very careful when selecting a policy to make sure all your unique exposures are covered.
As the name suggests, a home health care agency’s employee provides not only companionship and emotional support but also non-medical help for the elderly and people with disabilities. Any industry that has anything to do with providing assistance is prone to lawsuits.
That’s why the right insurance for a home health care business is much more important than the “right” price. Saving a few hundred dollars now, might mean paying thousands down the line when a claim happens.
Let’s take a look at the types of home health care liability insurance such as general liability and malpractice insurance; we’ll take a look at the differences between them and what types of claims they cover. We’ll also talk about the factors that contribute to the cost as well as what strategies you can employ to potentially save some money on the premium without sacrificing your coverage.
Let’s get started!
Home health care liability insurance
Home health care insurance coverage consists of two distinct liability coverages: a General Liability) and a Malpractice (also called an Errors & Omissions or a Professional Liability)
The two policies insure you against entirely different types of exposures, and both are necessary to ensure a financially sound business should a claim arise.
General Liability coverage and its exposures
General Liability is a part of your home health care Insurance portfolio and is there to protect your customers, vendors or any third party that comes in contact with your business and might get injured or whose property might get damaged as a result.
This type of liability is typically carried by every business regardless of the industry they are in, and is often contractually required by vendors and clients.
Below are some claim examples for this type of coverage:
- A client comes into your office to inquire about the services for her elderly grandmother. As she walks through the door, she trips over a rug and sustains injuries as a result of her fall.
- A mailman is bringing in your mail when he trips and falls on a wet floor and sprains his ankle
Professional Liability coverage and its exposures
Unlike the General Liability policy, home health care Malpractice insurance is much more specific. It protects you and your employees against claims alleging negligence or misconduct.
Whether the wrongdoing was actual or perceived, the lawsuit costs thousands of dollars to defend. A Professional Liability policy covers any costs to defend the lawsuit (attorney fees, court fees and so on) as well as any settlements.
The most common claims against home health care providers are from professional duties negligence.
Below are an example of such claims:
An employee showing up late (or not showing up at all) at the patient’s home. As a result, the client misses a critical appointment or forgets to take medication, and his condition worsens.
The factors that affect the cost
Home health care insurance providers take into account many factors before determining the Cost of a policy, with each individual and business having its own factors.
Unfortunately, there is no way to predict exactly the cost that your company will incur. After all, your operation is unique with its unique needs. A ballpark figure for a Professional Liability policy is roughly $500 a year per 1 million for a small company. General Liability policy costs less since the claims tend to be less severe and not happen as often. For a General Liability policy, you can expect to pay around $400 per year.
As mentioned above, the cost is largely determined by your company’s unique factors.
The scope of your responsibilities – the severity of the claims is primarily determined by the scope of the responsibilities that your employee takes on when caring for the patient. Do they just do light housekeeping duties and provide emotional support? What about the patients? How severe of an impairment or health issue do they have? The worse the client’s condition and the more chances for your employee to make a mistake the higher the rate will be
The number of employees caring for the patients – the more caregivers you have, the more chances for an error and thus a lawsuit.
Claim history – When determining your rates, an underwriter looks very closely at your past claims history. If you had claims in the past, they would want to know exactly what happened, and what measures were taken to address the problem and reduce the likelihood of it happening again.
How I can save money on premiums?
You wouldn’t be a savvy business owner if you didn’t try to save money where you can. While the insurance company determines the rates, you have some say in what your premiums look like.
One of the most significant ways to save money is to develop a solid risk management program. Not only will this show your underwriter that you are a safer risk, but it will also help you reduce the claims, thus making your claim history more favourable and allowing the carrier to give you a discount.
A risk management program works on identifying potential risks to your business (such as lawsuits and their most common causes) and addressing these issues before they even begin. For example, a big part of a risk management plan is employee training on procedures, interaction with the patient, etc.
Another example would be employee training on responding to a crisis, what to do if they are involved in a lawsuit etc.
Another way to affect your premium is changing up your deductible and liability limits. Since this affects your coverage, be very careful when you decrease your liability limits or increase your deductible.
Many companies also offer miscellaneous discounts such as paperless policy, online billing, no claim history and paying for the policy in full. Take advantage of all these if possible.
When it comes to home care agency insurance coverage, the right insurance policy is crucial. As you can see from examples, above, one mistake can make an already delicate condition worse resulting in many hospital bills and emotional anguish to the patient and his family. Your clients rely on their caregivers to be their eyes, ears, and memory. Extreme attention to detail is needed, but of course mistakes and accidents can happen.
Even though the cost of the insurance policies may seem outrageous, the unfortunate reality is that we live in a very litigious society and healthcare is one of the riskier industries there is. A few thousand dollars a year for a policy that you may not use that year is a lot. We get it! However, the cost to defend yourself from the lawsuit can cost you thousands if not hundreds of thousands of dollars, your business and even your personal assets.
BizInsure can help you explore your options by providing instant quotes from leading insurance companies. Let us know if we can help!