Home Health Care Prevention Series Introduction

Many of the home healthcare agencies that we cover are relatively new in their industry and others find their profit margins low enough that they feel they need to cut corners to make ends meet. If your agency, center, or office fits into one of these two categories we have put together this next posting series specifically with you in mind. This doesn’t mean that if you don’t fall into one the categories above you should ignore our next set of posts, you might get some good information as well, it just means you should scan them for gaps in your own program or for confirmation that you are on the right track.

So our next series of posts beginning the first week of April will cover some of the things that your agency can do to prevent mishaps that can create liabilities that can, potentially, put you out of business. Since the first thing your caregivers do when they go to work in the morning is drive to the consumers home we thought we would kick off the series with auto accident prevention. Other topics to look for in this series will be Patient Transfer Injuries, Workplace Violence Prevention, Sexual Harassment, and more. Stay tuned.

Home Healthcare Agencies Think They Are Covered, But Are They?

In our conversations with many of our home healthcare clients we find that there tends to be a common gap in their coverage that most of the agencies never even think about. Most agencies are quick to take out professional liability and get, or try to avoid getting, workers comp coverage but if they don’t own their own company vehicles it never crosses the owner’s mind to cover him or herself from the employee, contractor, or even volunteer having an auto accident in their own car while on the clock.

Why Should I Care?

Take, for example, the case of a social service agency that had an employee using his own car in the performance of his job. He hit a pedestrian in a crosswalk who decided to sue the agency instead of just the driver. The agency felt that since the employee was using his own car they were not liable. It cost the agency $1.1 Million to find out they were wrong.

“But I don’t have any employees, just independent contractors. And they use their own vehicles.” This is the response we usually get but what these owners don’t realize is that it really doesn’t matter whether the person is an employee or not or even who owns the car. If someone is performing some task for your agency and the person has an accident, you may be found liable.

So, What Can I Do?

There are three basic things you can do to protect your agency from auto accidents you weren’t even present for. You can screen (let’s use contractors since they are so popular) contractors both before and after hire, ensure the contractor has adequate driver training in addition to any other training provided, and ensure that you and they have proper insurance coverage through a reputable insurance firm like Fowler Insurance Services.

Screening: A home healthcare agency should first ensure they have a clear company policy in place that reviews a contractor’s personal auto coverage both before hire and every year thereafter. Then you should also screen the contractor’s MVR before hire and every year thereafter.

Training: Once the contractor is on board you should ensure they complete one of many web based or other driver training classes. Some of these classes are even provided free of charge, just ask your insurance company. We would be glad to help you find one.

Adequate Insurance Coverage: Whether your agency owns its own vehicle(s) or your workers own their own doesn’t matter. Whether the agency workers are employees, contractors or even volunteers you may still be liable. If you own a home healthcare agency and you have people using their own cars to perform tasks for your agency or even to drive to your client’s homes and back each day, then you need to have employers non-owned auto coverage added to either your general or professional liability policy or your commercial auto policy if you own your own vehicle(s) as well. Do you want your agency held liable because your contractor caregiver rear-ended a fellow motorist on her way to your client’s home to start work for the day?

“But it’s extra and my agency is already running on slim margins. We just can’t afford to add anything extra.” We understand your margins are thin but liability judgements can kill the business you have spent $1,000’s building. Protect yourself!

Who Can I call?

Justin Fowler and his team at Fowler Insurance Services go to extraordinary lengths to help you fill all the gaps in your financial armor. Not only do we carry workers comp, professional liability, surety bonds, and commercial auto policies, we even have programs specially designed to accommodate the slim margins experienced by even newer home health care businesses. The customer service is outstanding as well. For more information and a quote give us a call at (866) 657-5670 and protect your home health care business today.

Mitigating Risks for Home Healthcare Agencies

The costs of running a home healthcare agency, whether offering medical or non-medical services, are high and profit margins are slim to begin with. According to the Houston Chronicle, these agencies must worry about licensing fees, marketing and recruiting, office expenses, reimbursements, and insurance costs. More than that, there are the problems with waiting for Medicare payments for hours billed, legal advice  to ensure state and federal guidelines compliance, and paying employees or contractors.

Why Do It At All?

Rarely do owners of home healthcare agencies go into business to become rich. Rather, they do it because there is a need and they have a passion to help seniors who cannot help themselves that usually begins with helping their own aging family members. The bonus to this is that they also hope to make something of a profit for their efforts while helping others in the process. The problem is, by providing this service they also take on a great deal of risk.

What Kind Of Risk?

There are actually three kinds of risk that home healthcare agencies most commonly face that are mitigated by insurance agencies like Fowler Insurance Services. Professional liability protects against a client suing the home healthcare agency or its employees. Commercial auto protects against the risks of employees and contractors using their personal vehicles or agency fleet vehicles on the road. Workers compensation (workers comp) protects the home healthcare agency should an employee or contractor get hurt on the job. For the purposes of this article, we will concentrate on workers comp because there are a great deal of home healthcare agencies that seem to be misinformed on this issue.

Do I Really Need Workers Comp?

In speaking to home healthcare agencies we have come across many that hire independent contractors believing that they will save money on both taxes and insurance. The reasoning is that since they file a 1099 instead of a W2 they will not need to pay taxes for their workers, deduct taxes from the workers paychecks, or provide workers comp for their workers. We are not the IRS so we will not address the first two issues above but if you own a home healthcare agency we highly recommend you review this article. We will, however, use the following example to explain why every home healthcare agency needs to have a workers comp policy in place.

Contractor Hurt At work

As an example, let’s say that a caregiver that is also an independent contractor for a home healthcare agency is working in a client’s home. This particular client is overweight and needs physical help bathing. During the course of a bath the client begins to fall and the caregiver, instinctively trying to catch the client, falls also resulting in a broken leg. As an independent contractor the caregiver finds they have to pay the entire cost of the hospital visit. Worse, since they cannot work with the cast on her leg the caregiver finds she does not get paid until she gets the cast off. With bills not getting paid and medical bills extremely high, she decides to seek financial protection in court by suing her home healthcare agency. The court would find that because the contractor works for only one agency, that agency controls how often and how much the contractor works, and that the home healthcare agency controls the contractor’s behavior at work that an employer/employee relationship exists regardless of the contract the two signed. The court would then also find that the home healthcare agency is liable for the costs of the hurt contractor and, worse, that the agency is in violation of workers comp laws and exacts fines and fees accordingly. Suddenly the home healthcare agency finds itself losing a court case that costs them millions of dollars that could have been avoided by paying the extra couple of thousand per year in workers comp premiums.

What Can I Do?

Whether a home healthcare agency chooses to hire employees or independent contractors they should make sure to purchase a workers comp policy and keep it in place. Doing so is a whole lot cheaper in the long run than losing a court case for millions of dollars. Some might think, “that won’t happen to me, I only hire contractors that I know and have been friends with for years.” The reality is, almost every case like this that has come to pass happened with contractor ‘friends’ that were ultimately lost in a court of law. This can happen to you.

Who Can I Call?

Justin Fowler and his team at Fowler Insurance Services are headquartered in San Ramon, CA and are licensed to write insurance policies in CA, OR, WA, NV, AZ, TX, FL and NY. With more than sixteen years industry experience without a single complaint, this is your go-to agency for both personal and business insurance. Not only do we carry workers comp, professional liability, surety bonds, and commercial auto policies, we even have programs specially designed to accommodate the slim margins experienced by even newer home health care businesses. The customer service is outstanding as well. For more information and a quote give us a call at (866) 657-5670 and protect your home health care business today.

Home Health Care Business Sued for Wrongful Death Due to Elder Abuse

Home-based care has come under increased scrutiny over the years and is becoming even more comprehensive as time goes on and hard lessons are learned. Case in point, a home health care business was recently sued for wrongful death due to elder abuse. The home health care business provided in-home, non-skilled, around the clock care to an overweight client that had severe medical issues including alcohol addiction, COPD, and dementia. When the client was taken to the hospital for end stage emphysema, the hospital staff found the client had stage IV bed sores. It was discovered later that the caregiver had been issued a written warning concerning the issue by his supervisor some seven months prior to the hospitalization and death. The suit alleged that the caregiver’s staff was not physically able to assist during toileting, bathing and exercising to prevent the bedsores and that lack of care and movement accelerated the breathing issues that ultimately lead to the client’s death.

Consider the Cost

Considering how slim the profit margin is for any home health care business it may seem very tempting to cut corners in such areas as the hiring process, training, and proper insurance coverage. This, however, is not a good idea since losing a suit like the one outlined above will cost the home health care business a minimum of $500,000 plus legal fees and court costs. Usually when a life is lost the judgement is more than a million. This kind of hit to the bottom line is likely to shut down any but the best funded or well insured home health care business. Professional liability insurance from Fowler Insurance Services that can mitigate that risk suddenly seems like a no-brainer doesn’t it?

Three Things You Can Do

There are actually many things that any home health care business can do to avoid a suit like this but they all boil down to three basic things; Train, Educate, and Protect.

• Train - This refers to the hiring and training process that should be used on the employees of any home health care business. This means in-depth background checks, regular on-going training processes, and regular unannounced supervisory follow-ups.
• Educate - This refers to educating the client and family members rather than the employee. This means making both the client and family members aware of policies, procedures, and working methodologies then encouraging them to participate in the process as well.
• Protect - this refers not only to state and county oversight but also to proper legal and insurance protection as well. This means either keeping an attorney on retainer or one to refer to at any time and purchasing and keeping appropriate insurance policies in place and updated with growth or changes to your home health care business.

Who Can I Call

Justin Fowler and his team at Fowler Insurance Services are headquartered in San Ramon, CA and are licensed to write insurance policies in CA, OR, WA, NV, AZ, TX, FL and NY. In business for more than sixteen years without a single complaint, this is your go-to agency for both personal and business insurance. Not only do we carry workers comp, professional liability, surety bonds, and commercial auto policies, we even have programs specially designed to accommodate the slim margins experienced by even newer home health care businesses. The customer service is outstanding as well. For more information and a quote give us a call at (866) 657-5670 and protect your home health care business today.

Do I Really Need Earthquake Insurance?

We get asked this question very frequently, " Do I really need to purchase Earthquake Insurance?"  There is no easy answer to that question and the topic deserves some important consideration.  I evaluate the situation based on a few objective components, including your maximum exposure and the probability of loss.  Using these factors, you can quantify your risk and probability of loss to determine your maximum probable loss.

Maximum Exposure

If I look at your amount at risk, that is the amount of money that you are really risking in event of a total catastrophic loss scenario.  Basically, the ground would have to open up and swallow your house for you to collect.  Minor or event moderate damage due to earthquake would likely be your responsibility, due to the high deductible on the policy.  So in this respect, I ask you to quantify the equity that you have in the property and use that as your maximum amount of value at risk.  If your home has very little equity, then you really do not have much personal wealth at risk. 

Probability of loss

If you look at the USGS prediction of earthquake likeliness for Danville Ca, or San Ramon Ca local area, there are three faults that directly surround this area, the Calaveras, Mt. Diablo, and Greenville faults.  In the next 30 years, they have a 11%, 3%, and 3% chance of sustaining a 6.7 magnitude or greater earthquake.  The Hayward fault has a 27% likelihood of having an event in the same period and would also likely be significant in Danville, Ca.  You can take a look at the map here:

http://earthquake.usgs.gov/regional/nca/wg02/images/percmap-lrg.html

The likelihood of a total loss due to fire or earthquake seems to be about 0.6 -1.0% from what I can determine using the loss cost factors provided by industry publications.  That being said, these figures are mostly anecdotal and not scientific.  Assuming that the above is true, it would make sense to purchase earthquake insurance based on the amount of money you have at risk (equity in the home).  Intuitively, it seems like the exposure to earthquake loss is lower than that of a total fire loss, which may be true.  However, we gladly and rightfully feel justified to protect our homes against a total fire loss at a fairly well accepted figure of 2% chance of total loss, it seems to make sense to purchase earthquake insurance even if the real exposure is somewhat lower than 2%.

Other people

This is a very common question that customer ask " What do most people do?"  Most people do not buy earthquake insurance.  I believe they perceive it to be a much lower risk than fire damage - which it may well be.  They also get thrown off by the high costs of the coverage and the high deductibles.  I only have a few customers that have purchased earthquake insurance and most of them had significant equity (greater than 50%) in their properties - in fact most of them were owned free and clear.  I can say that the California Earthquake Authority collects about $600 Million in premiums each year, which means that about 600,000 - 900,000 Californians are paying for earthquake insurance, or by my calculations about 5% of homeowners are actually buying this coverage.  I don't know that I would use what others are doing as an important decision making factor, but at least you can put this into context.  I believe many people take significant risks without knowing what they are really getting themselves into.

Recommendation

If you have a sizable amount of equity (over $100k or a large percentage of your net worth) AND there is 62% percent likelihood of a 6.7% or greater earthquake within the next 30 years in the greater bay area, I would recommend purchasing earthquake insurance.  It is 99% likely that you will not have a total loss due to an earthquake.  It is also 98% likely that you will never suffer a total loss on your home due to a fire.  To suggest that you go without fire insurance is laughable.  However, to suggest that you pay extra to protect against earthquake loss seems excessive to a lot of people, I'm not really sure that the facts justify the aversion to purchasing earthquake insurance, especially if you have significant equity in your home.

If you cannot justify the expenditure, I would at least recommend the following mitigation steps.  1) install a gas shutoff valve on your gas meter.  This typically costs about $350 to install, but it cuts off the gas flow to your house which can reduce the likelihood of an ensuing fire. While fire damage is covered under your standard home policy even if it was started by an earthquake, it is far safer for you and your family not to have a fire.  2) If your house is built on a crawlspace you could have your property retrofitted for earthquake safety.   This is a fairly commonplace procedure and most contractors that offer these services can usually retrofit a typical single-story house for around $3500.  If your house is built on a slab foundation, I do not believe there is anything extra you can do, but it may be worth checking with a licensed retrofitting specialist contractor to determine if in fact there are any preventative measures that can be employed.

One Large Auto Insurance Mistake

Auto insurance contracts have very specific wording that makes it extremely difficult for the average person to fully understand how their coverage applies in varying situations. That is why independent agents like us still have a job. We can explain the contracts to you and if we are good, point out the problems you will run into as circumstances in your life change and evolve.

Consider the following scenario: Your teenage son or daughter is finally driving and out of an abundance of exuberance and a strong desire to be responsible, he/she goes and gets a job delivering pizzas driving the family car. You applaud his/her sense of industry and appreciate his willingness to contribute to the family economy. If you are like most people, you probably didn't think to yourself, "I should probably call my insurance agent and ask him if there are any exclusions that apply to this situation.."

There is an even more commonplace example that happens all the time. Suppose you have been out of work for a while or are between jobs. Exhausted from trying to find work, you decide to start your own business. Let's say our example involves a you who is exceedingly handy and can fix things around the house. Now you are running a handyman business. You print up some magnetic signs from your local sign store, affix them to your car, pile a bunch of equipment into your car, and voila! You are up and running, a proud new small business owner. Or perhaps you are great at fixing computers and travel to and from clients offices working on them and transporting equipment to and fro. Again, I'm sure the last thing that was on your punch list of items to accomplish was a call to your insurance agent to find out if there are any

Both of these scenarios are very commonplace. They have one major thing in common: both involve business use of a personal automobile that is excluded under their personal automobile insurance policy. Now, each company handles this situation differently but universally business use of a personal auto policy triggers a very specific exclusion that you won't realize until it is too late, unless you call your agent to seek counsel ahead of time.

The best advice I can give you is to always remember to check in with your agent whenever you change your driving habits, start a business, or make any life changes that may affect your coverage. It is always better to have a conversation with your agent and make certain than to assume something will be covered. If you have questions about a scenario regarding any insurance matter, you can always call one of our counselors and we will give you our opinions and advice at no charge.

6 Easy Tips for cheaper Home Insurance

I am sure you don't like to pay for Home Insurance, but it is a necessary evil for most of us. However, just because you have to carry Home Insurance, it doesn't mean you have to pay through the nose for it. If you try these 6 easy tips for cheaper home insurance, you may notice a big difference in your bottom line.

- Shop Around

Don't hesitate to compare prices from several insurance companies. You may be able to reduce your premiums by a substantial amount. This may seem obvious, but research has shown that a surprisingly large percentage of people either just renew their current policy or get only one or two quotes. Some insurance web sites will automatically compare several quotes for you, making this one of the easiest ways to reduce your insurance bill.

- Combine your buildings and contents policies

You can often get a discount if you carry both buildings and contents coverage. This usually works out cheaper than getting the two policies from different companies.

- Pay upfront

Most insurers let you pay your premium in monthly installments. However, most companies will charge interest for this option. You are almost always better off paying a full year's premium in advance as it will work out cheaper in the long run.

- Don't file claims for small amounts

Making many small claims will almost always increase your insurance premium as your insurer may see you as higher risk. You may also lose any no claims discount your policy has. You are entitled to claim for anything your policy covers, however, you should ask yourself if making a small claim is really worth the hassle and possible future costs.

- Increase your home security

Believe it or not, beefing up your home security with better window locks, door locks, outdoor lighting, and/or alarm systems can result in lower premiums. Ask your insurer what you could do to get extra discounts.

- Reduce your coverage

Many policies will feature benefits that you may or may not need such as coverage for personal possessions while travelling, or 'free' legal advice. Make sure to through your policy to see what parts of the policy you really need. By cutting your coverage down you may be able to reduce your premium.

Saving Money on Auto Insurance

We all know the feeling of being bombarded with e-mails, commercials, billboards, and ads saying how much money we can save on our auto insurance by switching to another company. Insurance is a very competitive industry. Just because another company is offering a better rate doesn't mean you should instantly cancel your current Insurance Policy and switch to the cheaper one. There are a few things you need to check up on before you switch.

Here are a few things to watch out for before you switch your auto insurance to another company.

There are some situations where sticking with your current auto Insurance can benefit you, even if the rates are a bit higher. If you've been with one company for several years and they offer a credit that waives the first accident you have, you may want to stay or see if the other company can match it. Sometimes this is referred to as good driver discount, or accident forgiveness. These types of discounts can be pretty significant as most accidents can raise your rates by 40% for 3 years. The potential savings could be several hundred, or even thousands of dollars over that 3 year period. Keep in mind when you switch companies, you often lose the credit you've built up. If you have an accident with that new company you are going to regret not having that accident forgiveness.

Another thing to be wary of is teaser rates. You have to make sure the company you are switching to is not offering you just a teaser rate for the first 6 months to get your business and then bump you up 6 months later once they've got you on their books. Since auto insurance is a profitable industry, companies may offer you a low ball rate to get you to switch and then once they've got you increase your rates at the renewal. If the rate the new company quotes seems too good to be true, it often is. Make sure you do enough research.

Watch out for hidden fees. This is one that may surprise you. Many companies will charge you for making monthly payments, usually in the amount of $3-$5 a month. Over the course of a year that comes out to $36-$60. That one small fee can take a big cut out of your potential savings so make sure you factor that into the rates you are comparing.

A couple other things to keep in mind when shopping around for auto insurance are the new company's website and hours of operation. Make sure they are available for you. If they are only open from 8-5 and you work 8-5, when are you going to be able to call them if you have a question or accident? If you do all your business online you want to make sure the company you are looking at has a capable website that can help you 24 hours a day.

You can save money by shopping your auto insurance around. Just be sure to keep in mind the things I've mentioned to make sure the deal you're looking at is really a great deal.

Am I covered to rent a car?

Ever gone to rent a car and had the sales person adamantly suggest that you purchase the insurance from the rental car company? This usually feels like an unnecessary "up-sell" by the rental car company. However, there is a very good reason for their persistence and it isn't just to line their pockets. I'll try to describe some of the advantages and disadvantages of relying on your auto insurance contract and limitations that may be present.

First and foremost, you should read your contract. Do not rely on the fact that the well-meaning, anonymous person at the call center told you it was covered. What is written in the contract is what you have for coverage, regardless of what someone tells you over the phone.

I'm going to describe the coverages that are provided in a standard auto insurance contract. Again, there is nothing really standard about this and each company may have altered the wording significantly so please, read your specific policy and do not rely on this article. (You can also call or email us if you would like us to review your auto insurance contract for free.)

There are two aspects that should be handled separately: Liability coverage and physical damage coverage. They are handled differently under the contract and you should know the distinctions. First, with liability coverage - that part which keeps you from losing everything you own if you crash and hurt somebody - the definition and specific language usually promise to protect you from claims for bodily injury and property damage that arise out of "any auto accident." These words are very specific and in this case designed to be fairly broad with respect to your protection from liability judgments against you from other motorists.

There are some exclusions that may apply to your auto insurance coverage. Generally, the class of operations is limited to private passenger autos. This means that if you rent a motorhome, a moving truck over 10,000 lbs, a motorcycle, or any vehicle that isn't a private passenger auto, you may not have any coverage under your auto insurance policy. Also, if you are renting a vehicle for business purposes, your personal auto policy is likely going to exclude coverage.

Physical damage coverage is handled quite differently. Most contracts use the term "Your Covered Auto" to describe what type of vehicle gets the benefit of your insurance policy's physical damage coverage. The definition of "Your Covered Auto" usually is limited to the following four classes of vehicles: 1) Vehicles listed on the policy 2) a "Newly Acquired Auto" 3) any owned trailer 4) a temporary substitute vehicle.

The last class is an important distinction. On the standard car insurance contract, a temporary substitute vehicle must be Non-owned, temporary, and used because your primary vehicle is out of service due to a) breakdown b) repair c) servicing d) loss e) destruction.

To spell it out in plain English: if your primary vehicle is in the shop, destroyed, stolen, etc. and you are renting a vehicle temporarily, the damage to your rental car will be paid for by your primary auto policy. However, if you are on vacation and choosing to rent a vehicle just for pleasure, the physical damage to that rental car is likely NOT going to be covered. Again, some companies will offer endorsements and include this feature, but as a rule, that is the way the contracts are written.

Now that we are a little more clear on what is and isn't covered in the car insurance contract, there is a very specific advantage to purchasing the physical damage waiver from the rental car company - it saves you time and may not be reported to your company. If you buy their physical damage coverage and damage the rental car, you can turn in the keys and let the company deal with fixing it. In addition to saving you time and inconvenience, the rental car companies have in the past added additional charges, such as lost of rental income, restocking fees, etc. which can add up in addition to the cost of the damage to the vehicle. Additionally, if there is no injury involved you may very well avoid having the accident in a rental car show up on your driving record, which will save you an average of $600 on your future auto insurance premiums after an accident.

When renting a car, please be sure to check your policy - ask your agent or broker to point out specifically in the contract where the coverages apply and how they are treated. If they can't point that our or are unwilling to show you, find an agent or broker that will take the time to help you.

Are you being overcharged for your Teen Driver?

One of the most expensive auto insurance exposures is a teenage driver. If you have high school aged kids in the house, you may have already realized this fact. While there are many factors that go into determining the price you are charged for insurance, the age of those driving vehicles in the household is one of the most significant.

In the past, insurance companies divided drivers into 7-8 different age bands. There was one bracket for 16-19 year olds, 20-23, 24-25, and so on. In recent years and with the advent of increasing technological investments, insurance companies have been creating almost yearly deviations in rating profiles to accurately price drivers with each additional year of driving experience. The idea was to more accurately and gradually adjust rates as the drivers gained more experience. However, it is unclear whether these changes have in fact affected the prices that parents are actually paying to insure their teenaged drivers.

At Fowler & Associates, we are going to conduct the mother of all comprehensive rating surveys to determine empirically what families with teenaged drivers are being charged and which companies are offering the best prices and incentives for families with teen drivers. Now more than ever, families are looking for ways to save money on auto insurance and need every penny to pay for the necessities in life. Over the next few months, we will survey thousands of households to uncover what parents of teen drivers are actually paying for auto insurance in many neighborhoods throughout California, as well as which companies are the most economical in each geographic location. We will post our findings here for your review and comment.

If you would like to participate, you can send us your contact information by filling out the contact form at the right of this web page. Check back for information as we complete this study.