Home care insurance can be confusing. Coverage exists to protect your business against a broad range of risk exposures, often using terminology you may not be familiar with.
We created this insurance 101 for home care businesses article as a refresher, to help you easily understand your home care insurance coverages, key terminology and important policy document and claim information.
Insurance 101 for Home Care Businesses: Insurance Basics
Home care insurance is designed to protect you from the specific risks you face as a home care business. At any time, claims of mistakes, damages, accidents, injuries or misconduct could put your business at risk. Home care insurance helps defend your business against these claims and their associated costs.
Home care insurance exists to protect your professional reputation, property, financial security and more. Most home care businesses need several types of insurance coverage to manage their risk. These coverages protect you from the most common exposures in the industry:
- General Liability—Protects against a variety of claims of bodily injury, physical injury or property damage.
- Professional Liability—Protects the business against claims of negligence or failure to perform professional duties.
- Workers’ Compensation—Protects against claims for lost wages and medical costs of an employee injured on the job.
- Hired and Non-Owned Auto—Protects against claims of bodily injury or property damage when transporting clients on the job.
- Theft Coverage—Protects the business against allegations of burglary, robbery or other theft by an employee.
- Sexual Misconduct Coverage—Protects the business against costs associated with a sexual misconduct claim.
Other exposures may exist, depending on your business, so some home care businesses also need coverage for:
- Employment Practices Liability—Protects the business against claims of hiring, firing and general workplace discrimination.
- Business Auto—Protects against claims of bodily injury or property damage when operating your fleet vehicles.
- Property Insurance—Protects against damage of your business property due to fire, flood, hail, earthquake or wind.
Insurance 101 for Home Care Businesses: Important Insurance Terminology to Know
To help understand your insurance options, policy coverage and claims process, it’s a must to understand some key insurance lingo.
Insurance Coverage—Your coverage is the amount of risk or liability your insurance company agrees to be legally responsible for paying in the event of a qualifying insurance claim for a loss that you suffer.
Named Insureds—This will be you, the policyholder, and/or your business entities you wish to cover under the insurance policy. When applying for coverage, make sure all necessary parties are named as insureds on the policy. Coverage will exclude those entities not named on the policy.
Declarations—The first page of an insurance policy is known as the policy declarations. It specifies the named insureds, policy period, location of premises, liability limits and other key information. Make sure this information is correct and keep the document for your records as proof of your insurance.
Covered Loss—A covered loss is a financial loss for which your insurance company will pay insurance benefits according to the terms of your insurance policy. Covered losses are specifically defined in your policy documents.
Perils—A peril is an event that may damage covered business property, such as your business’s equipment or buildings. Some perils are named perils, such as the fire, flood, hail, earthquake, and wind perils that may be noted in your insurance policy. Your policy may also list excluded perils, which are perils that will not be covered by your insurance.
Endorsements and Exclusions—An endorsement adds specific coverage to an existing insurance policy. An exclusion is a condition or event for which the policy does not provide coverage. Often endorsements and exclusions appear together since it is easier for insurers to exclude certain broad coverages and then add back in more specific coverage with endorsements.
Policy Limit—Your insurance policy limit is the maximum amount the insurer will pay for a covered loss. With some policies, you can choose your own limit, with higher limits resulting in a more expensive policy. Some insurers offer shared limits that are shared between a group of insureds. At Lockton Affinity, we offer individual limits, so you always have access to your full policy limits.
Insurance Deductible—An insurance deductible is the amount of money you agree to pay out of pocket for a covered loss in the event of a claim, with your insurance covering the rest up to your policy limit. Your deductible will apply each time you file a claim.
Insurance Claim—An insurance claim is a formal request for coverage of or compensation for a covered loss. When you file a claim, the insurance company will review your request and approve or deny the claim. Understanding your coverage and following the correct process for filing a claim helps ensure that your claim for a covered loss will be approved.
Insurance 101 for Home Care Businesses: Important Insurance Policy Information
When you purchase insurance coverage for your home care business, you’ll receive important insurance policy information in the mail or via email. Be sure to watch for your policy documents and read through them when you receive them. The policy documents will contain important information about your coverages and how to file a claim.
Ensure all your information is correct, especially named insureds, policy coverage, limits, endorsements and exclusions. If you find a mistake in your documents, contact your insurance representative right away. Errors discovered early can usually be corrected, limiting your business’s exposure to excess risk.
For more information about insurance for home care businesses, contact Lockton Affinity.