An Introduction to Home Health Care Provider and Business Liability Insurance

Baby Boomers are currently America’s largest living adult generation, with Millennials nipping at their heels.^[1] And they are retiring, which explains the surge in demand for home health agency (HHA) services. The parallel effect of this growth is an increase in jobs in the home health sector, particularly with regard to home health aides.

Home health or personal care aides provide physical and emotional support to the hundreds of thousands of Americans choosing to ‘age in place’. They are also invaluable to individuals who require assistance owing to illness, disability or cognitive impairment.

Even as home health agencies and aides continue delivering an important service, they face the reality of work-related risks. The workplace, in this case, is the client’s home, where injuries, damage and hazards can occur. The homeowner or care-receiver can very easily sue the agency in the event of an adverse event that results in some kind of loss or harm.

HHAs can protect themselves against potential liabilities and lawsuits without enduring significant financial penalty or reputation loss. Among the most effective and common actions is simply purchasing the appropriate insurance coverage.

Three types of insurance for home health care providers

1. General liability insurance

Imagine a scenario where an elderly patient falls and sustains a fracture while his home health aide is at his home. It is possible that his family may pin the blame on the aide for failing to pay adequate attention or not removing obstacles out of the patient’s way. General liability insurance will cover the client’s medical expenses and claim.

Say the home health aide accidentally knocks over and breaks an antique lampshade at her client’s home. Her home care agency’s insurance policy covering general liabilities will pay for the costs of replacing the lampshade.

General liability insurance may also cover slander, although slander cases are few and far between compared to slips, falls and property damage. It is not quite often that patients pursue legal action after learning that a home aide made false or derogatory statements about them.

A general liability insurance policy will pay only up to the specific dollar limit you purchase. You will need to pay for additional damages exceeding this amount.

Although home health care liability insurance is the first line of defense against general liabilities, HHAs have the opportunity to avoid complaints and claims by committing to consistent caregiver skills and training.

Slips and falls from slippery surfaces, obstacles, poorly lit areas, spills and wet floors, furniture and fixings can be avoided by staying vigilant at all times and exercising extra care when the care-receiver is mobile.

It is also possible for general liability or professional liability issues (discussed below) to occur from a lack of complete understanding around patient needs and preferences. Perhaps poor communication or a language barrier is to blame. Comprehensive training and background checks of home health aides can go a long way in preventing mishaps and conflicts in the place where care is delivered.

2. Professional liability insurance

If it is established that the home health aide failed to act in the way a reasonable personal care aide would have performed in the same or a similar circumstance, then negligence or malpractice charges are likely to follow.

The home health care industry prescribes acceptable performance standards that aides and their employers are expected to meet. Adverse outcomes are most often the result of falling below the acceptable standards of care and ethical conduct.

Any mistakes home health aides commit when caring for patients falls under professional liabilities, and is covered by professional liability insurance, also known as malpractice insurance.

Some examples include:

• The patient is admitted to hospital for the infection. Her family says that the home health aide forgot to or didn’t properly change the patient’s dressings from a surgery the patient underwent a week ago.
• The patient has to be rushed to the hospital after complaining of uneasiness. The doctor says that the patient’s condition is due to a medical error. The home health aide is blamed for his administering medication to the patient and a lawsuit ensues.
• The home health aide is transferring the patient from his bed to a wheelchair, and accidentally drops him. Liability insurance will cover any claims resulting from the incident.
• The patient develops severe rashes after suffering an allergic reaction to peanuts in her salad. The home health aide had prepared the salad and now the patient is asserting that the HHA must pay her medical bills.
• Professional liability insurance may also cover the loss of personal information. If the HHA or aide misplaces a file containing sensitive client information and the information is compromised, then the insurance policy can pay towards losses up to the purchased limit.

A broad liability insurance policy may cover libel and slander. It is best to check how insurance providers cover these specific claims. As a majority of HHAs are concerned with home health care business insurance coverage that covers claims stemming from negligent acts, bodily injury and property damage – all of which are pretty common occurrences, insurance carriers tend to focus on the two major types of insurance protection. Each may or may not cover the rarer claims; in any case, a combination of general liability and professional liability insurance is recommended for comprehensive protection.

3. Cyber insurance

Computers and mobile devices have become an inextricable part of the modern healthcare setting in today’s age of electronic health records. The risk of cyber-attacks lurks and patient health information is a popular target. According to a Healthcare Informatics article ^[[2]] 477 healthcare breaches were reported in 2017, affecting over 5 million patient records.

Although the scope for breaches in home health agencies is small, there is still a chance for protected health information (PHI) – which includes personally identifiable information and billing details – to be compromised. This can happen in multiple ways: theft of devices, loss of PHI or hacking.

Health records are susceptible to hacking as they offer an avenue to counterfeit victims’ identities for nefarious reasons, including illegal immigration and paedophilia. After records have been stolen by hackers, they usually seem to have ‘gone off the web’ for a while before emerging as long-term documents containing the victim’s personally identifiable details as well as health and pharmacological history. Forms may sell for $20 each on the deep web and the information in them is then used to create passports, driver’s licenses, Social Security Cards and anything that helps criminal elements assume victims’ identities. ^[3]

Data breach is a serious issue, whether or not identity threat is ultimately perpetuated. Cyber liability insurance is critical to mitigating the financial impact of claims against your HHA. The average data breach insurance claim in the healthcare sector is $537,000. ^[4] Legal defense costs and average settlement costs are also substantial and will severely dent any HHA’s coffers.

Cyber liability insurance can cover security and privacy liability, data recovery regulatory proceedings, privacy crisis expense (the amount spent on cyber security services to contain victims’ losses) and even access to a breach response team wherein experts can guide the agency to take the next steps after a breach. Although HHAs may not need all these coverage options, a basic cyber liability insurance policy is essential in any healthcare environment reliant on electronic storage and processing devices.

Questions to ponder before purchasing home health care liability insurance

Purchasing home care agency insurance can be quite overwhelming given the sheer number of options for healthcare organizations, including HHAs. A review of products from different home health insurance providers is helpful in making an informed decision. You will also want to assess these factors:

1. Gain a well-rounded understanding of your legal obligations and the home health care industry’s risks. A clear interpretation of regulatory, legal and ethical issues is necessary to ascribe responsibilities completely and unambiguously. This will help your agency staff and home health aides go about their professional duties with a full awareness of their rights and responsibilities.^[5]
2. Avoid making decisions strictly based on how much home care agency insurance will cost you. Claims can hit your agency even when you rigorously follow best practices and exercise utmost care. The appropriate coverage prevents the financial devastation possible in the event of an expensive claim or a class-action lawsuit.
3. Insurance agents recommend overestimating insurance requirements, and it’s not self-serving advice. Any additional protection becomes invaluable when you consider the potentially thousands of dollars you may spend on legal fees. Also, a high deductible and small premium may seem attractive on paper, but it almost always ends up being a poor choice as most businesses cannot afford high deductibles.

Finally, choose a reputed provider of home health liability insurance. A trusted insurance partner will always work in your best interest and provide a financial cushion on a continuous basis.

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