Meeting our seniors & disabled population’s health care needs through   thoughtfully designed, safety conscious insurance coverage for the business owner, while protecting both the patient, and their caregivers/employees in the Home Health Care setting.

With the baby boomers rapidly aging, their growing health issues have sparked an enormous need to expand businesses caring for the elderly.   Additionally, disabled people have the same needs but may not be elderly. Two types of businesses that care for the elderly and disabled are home health care agencies and assisted living facilities.

These two industries are considered the least restrictive options for health care, allowing seniors and disabled persons more flexibility and control over their own living arrangements. Patients and their families may see home health care as the most attractive option so they can both retain their autonomy and remain in their home near their family.

Providers in these fields bear a great responsibility to care for people in an ethical and caring manner. Intense scrutiny is placed on each industry to provide quality care. Both the home health care and assisted living industries are highly regulated in every endeavor they undertake: by law enforcement, governmental licensing agencies, government insurance carriers, private health insurance carriers, workers compensation insurers, the medical profession and even the insurance carries which service these industries needs directly. Safety for all, especially patients and employees, is an extremely important concept in insuring both of these industries and directly impacts a provider’s rate for your insurance premiums.

So as a business owner analyzes what insurance coverage you want for your agency, safety needs to be a factor in your decision making in order to protect all concerned.

In order to address this vast topic this article will be divided into three sections:

1. Home Health Care Agency Insurance
2. Assisted Living Facility Insurance
3. Workers’ Compensation and employee safety protocols for both types of industries.

Section 1.  Home Health Care Agency Insurance

Home Health care providers, whether for profit or non-profit, fall into the SIC Business Insurance code 8082 Home Health Care Services.  These entities should have all of the generic insurance types below:

• general commercial liability
• worker’s compensation,
• business auto (hired and non-owned),
• business personal property insurance, mobile medical equipment, durable medical goods
• commercial real property insurance, or commercial renters insurance
• commercial crime and employee dishonesty, bonds, damage to client’s property
• Inland marine or property in transit.
• Equipment breakdown, Loss of income
• Professional liability
• Data Breach and Cyber Security

Some of these coverage’s are standard policies and are available through most commercial insurance carriers as part of a business owner’s package with supplements and or endorsements. The State Department of Health where you are operating may have a minimum amount of liability you must carry if you do business in that state. Additionally, if you accept Medicare or Medicaid your general and professional liability must meet their certification requirements.

However, due to the gestalt concept of providing care in the privacy of the clients home, there is less direct supervision and real time scrutiny of the staff as the actual care takes place  by the agency. The agency has a duty to to ensure  adequate care accompanied by an obligation to protect the client from abuse or neglect by the employee providing the care; yet  alternately imposing a greater responsibility for the employee to be a guardian for the client and report unsafe conditions or abuse by another in the home, and take appropriate actions, even if unwanted by the client.

In order to protect the agency, the business owner must be acutely aware of this double edged sword and carefully choose coverage which ideally incorporates the best safety practices used in this industry.  Some types of insurance listed above deserve more in depth discussion due to the nature of the services provided to the client.  Some of the options discussed are not available through every carrier and your agent may need to find carriers who specialize in providing coverage for this field.

For instance, Professional Liability is absolutely necessary and critical in this field because you are delivering health care. Strategically, there are some different options.  You may prefer a carrier who provides coverage for every member of your organization including employees, volunteers, medical directors, students, independent contractors and the Board of Directors.  This option may be cost prohibitive and the agency might consider having professional liability for its medical staff and requiring each doctor or nurse to carry their own excess professional liability policy in addition to the agencies; with the agency being an additional insured on the staff’s individual policies.  This is akin to a hospital requiring physicians to carry medical malpractice or professional liability in order to be on staff.  It may also be referred to as Primary and Contingent Medical Professional liability.  You might also want to look at obtaining a large umbrella or excess professional liability policy for directors, administrators and officer’s liability as they may not be in the medical profession.

The doctrine of respondent superior  is the legal theory that holds the employer liable for the negligent acts of employees while acting in the scope of employment. As part of your agency’s duty to care for the client, you are responsible for the patient’s life in some cases where they are extremely ill or near the end of life.  If the employee fails to show up or walks out and the patient is left unattended you are liable.  If the employee arrives intoxicated whether from alcohol or drugs or other substances and makes a mistake you are liable.  If an employee is careless and lets a patient burn themselves while smoking you are liable.  I am sure you can see the pattern here and realize this field has an extremely high exposure for liability.

However, all the insurance types shown above still may not be adequate to protect the agency from liability for its employee’s intentional acts.  Under general commercial liability, neglect of a patient by an employee while acting under the scope of employment as shown in the examples above should be covered by your general liability policy but usually intentional harm to the client is not.

One might think commercial crime might provide this protection. Commercial crime insurance does cover dishonesty in terms of both money and inventories belonging to the company and a rider or supplement can be purchased to protect the client’s property.  You also need to ensure that the situations covered include employee’s acts, error or omissions in administration of the employee benefit plan, or fraud on the part of a medical director or administrator, and legal expenses to defend a case again a director or administrator.

Unfortunately, neither general commercial crime insurance does not cover assault, battery, elder abuse, sexual abuse or exploitation, of the client, or any other intentional tort by an employee. These are often exclusions under the policy.  The health care industry has a heightened duty to protect its clients as they are considered vulnerable people.  Statistics are alarming regarding the frequency of occurrence of intentional abuse.

Therefore, you also need to exercise due caution during the hiring process by always identifying whether the employee has previous violent or criminal history or mental health concerns which might place a client in danger. In that instance you can be directly negligent for injuries inflicted on the basis of negligent hiring or negligent retention if you retain an employee after becoming aware of previous bad acts.  Additionally, even if you have an assault and battery insurance supplement your knowledge of this employee’s past behavior or if you should have known this information, may allow your carrier to decline coverage depending on the wording of your policy.

Insurance coverage for assault and battery (a/k/a abuse and molestation) by agency employees is  not widely available but it is very necessary. This  insurance type must be purchased as  a supplement or endorsement in addition to general liability but given the high  risk exposure for this type of claim it is one you should obtain if at all possible.  More insurance carriers are offering this coverage as awareness of the problem grows. If your carrier does not offer this option, solutions such as part of a business package, supplements and stand-alone polices are available through carriers such as but not limited to:  Solutions Group, Hanover Home Care, Cincinnati, Philadelphia and Markel who specialize in insuring this industry.

Conversely, you may have a patient who harms an employee.  The patient may be abusive or impaired by their condition.  Patients may have Alzheimer’s disease, senility, other mental health disorder or be delusional and think they are being attacked in some way.  You’re first instinct may be to abruptly terminate services for this patient. This is a very risky method of dealing with the problem.

This reaction may leave you liable for  “patientabandonment” which is another tort that you can be liable for. You must take steps to ensure the patient health care is undertaken by another provider or give a sufficient notice with reasonable time for the patient to obtain care by another health provider.  This is usually covered under professional liability insurance but scrutinizes your policy to ensure that it is not excluded, and purchase a supplement if needed.

Today more clients also want options that suit their individual tastes and desires not just what is available through the usual channels. Innovative housing options are available as an adjunct to home health care.  One such option is the “med cottage” which is basically a kit which allows the patient to turn their garage or other building located on the property where they are residing into a state of the art hospital room for the family member who needs care. Another option is taking an ordinary out building and outfitting it specifically for the patient through a licensed contractor specializing in medical construction.

Should your agency work in one of these buildings,  or an ordinary house, medical equipment will most likely be used by your staff.  You want to make absolutely sure that you have insurance which covers both specialized medical equipment and durable medical goods and equipment. It is likely that you or the client will have to rent or lease some of the medical equipment.  Sometimes Inland Marine Insurance covers this need but you need to be sure it is spelled out whether damage by your employees to rental equipment is covered. Additionally, you need Medicare certification and surety bonds if you provide or supply the durable medical goods to the client, as part of your services.

Harm to a client could also result from a defective machine but would normally be covered by products liability coverage on the part of the manufacturer.   However, improper cleaning and sanitation on the part of your worker resulting in harm to the client could be negligence on the agencies part.

One last type of insurance is critical to the Home Health Care Agency and that is data breach & cyber security.  This is particularly true because you are dealing with medical records subject to HIPPA. You want to make sure you are covered for the actual expense related to the breach as well as any fine or penalties levied by any government entity for a HIPPA violation associated with the breach.

Comprehensive insurance is your best suit of armor in the home health agency field. Protect yourself, your staff and your patients  accordingly.