Tag: 8829

6 Types of Insurance every Home Healthcare Small-Business needs.

Home Health Care is one of the fastest growing industries in the country. With the baby boomers moving up in age, the need for these services is growing larger every year. The need for proper insurance in these businesses is also becoming more important. For a business owner, most of the clients in this industry are nearing the end of their life. Most are not in good health. Many get hurt or are sick frequently. Protecting your business from mistakes or court costs is crucial in this industry. Below are 6 types of coverage every Home Health Care Business should carry.

Home Health Care

  • General Liability
  • Professional Liability
  • Business Personal Property
  • Hired and Non-Owned Auto
  • Workers Compensation
  • Commercial Crime/Employee Dishonesty

 

General Liability

General Liability (GL) Insurance, in most cases, is the most important insurance coverage a home health care business can obtain. In most states it is required by law and it is usually the first line of insurance purchased by a business. It protects your business from most liability exposures other than automobile and professional liability. Other coverages are usually added to this depending on the business needs, but all businesses need General Liability. Unlike Workers Compensation Insurance this coverage protects your business from liability to third parties.

 

Professional Liability

Professional Liability Insurance is coverage for professional businesses that give expert advice or provide technical services for a fee. It is designed to help protect a business against any claims of negligence. Therefore, professional liability insurance helps business owners defend themselves from lawsuits and helps pay the damages awarded in a civil lawsuit. Professional liability insurance is commonly referred to as errors and omissions (E&O) or medical malpractice.

 

Business Personal Property

Business Personal Property Insurance is usually an addition to a Commercial Property Insurance Policy. It protects your business from damages to your buildings and property of your business. The personal property of your employees and the personal property of others you might be responsible for. In most policies it also provides additional coverages including: debris removal, pollutant cleanup, preservation of property, fire department service charges, increased cost of construction, electronic data, newly acquired or constructed property, off-premises property, valuable papers and records, outdoor property, and nonowned detached trailers

 

Hired and Non-Owned Auto

This type of auto insurance coverage is for when employees of a home health care business use their own vehicle or a rented vehicle to do company business. This can be as simple as an employee running to the grocery store to buy snacks for a meeting, an employee using a rented vehicle while away at a conference or using a rented truck to transport your equipment.

 

Workers Compensation

Workers’ compensation insurance differs from most other forms of business liability insurance. That is because it is specifically designed to cover your employees and not third parties. Workers Comp covers insurance claims by employees in the event they are injured on the job. The function of workers compensation insurance is to insure a business is not liable for most accidents that occur on the job and employees have comfort knowing their doctors bills and some lost wages will be covered if they are hurt on the job.

 

Commercial Crime/Employee Dishonesty

This type of insurance coverage is mainly for employee theft of money, securities, or property. Most policies include some or all of the following types of employee crimes: forgery or alteration, computer fraud, funds transfer fraud, kidnap, ransom, extortion, and counterfeit money. It is usually written with a per loss limit, a per employee limit, or a per position limit.

Insurance For Home Health Type Businesses – W-2 – 1099 – Leasing

The home health care industry is one of the fastest growing business types in the U.S. As the American population grows and the life expectancy becomes longer the population needing health care type services at their home continues to increase. In my experience home health companies are servicing the elderly, the mental or physically disabled and people with permanent disabilities that require constant care.

There are three types of home health agencies that can have a drastically different impact on the business insurance coverages.

  1. Business that employs all as W-2 employees
  1. Business that chooses to employ all as 1099 independent contractors
  1. Placement agency that places their employees with a third party employer

The first type is the easiest model to insure for professional liability, third party crime coverage and workers compensation coverage. Being employed on a W-2 status, these are direct employees and the ownership of the business has the right to direct, control and fire.   Insurance companies prefer this set-up.   Business owners MUST make sure their third party crime bond extends coverage to the client’s home.

The second type is the most difficult to insure. For the third party crime coverage, business owners must confirm that coverage is specifically for “independent contractors”. For the workers compensation coverage there is a specific question on the application asking about “sub-contractors” and whether they are insured or uninsured. You must answer the question “Yes, the business is using sub-contractors”. If you are covering the 1099’s under your policy the business owner must also answer “Yes, the sub-contractors are uninsured”.

The third type is different from the two above because the business owner is not purchasing a policy to cover their tax id number. For a placement agency, the business owner is “leasing” their employees to a “Leasing Company” aka “Professional Employer Organization” aka “Staffing Agency”. The staffing agency is insuring under their tax id number specifically for workers compensation. If the staffing agency requires the business owner to purchase their own professional liability and third party crime coverage, the business owner must inform their insurance company and make sure coverage is acceptable.