Hospice Liability Insurance

Here are some of the factors that determine insurance premiums for hospice care professionals during the underwriting process:

• Type of services. A hospice physician or nurse who provides medical care can expect higher insurance rates than a social worker, chaplain, or home companion who provides emotional or spiritual support.
• Business property and equipment. It'll cost more to insure hospital beds and specialized medical equipment than basic supplies to assist with bathing and dressing.
• Number of employees. A larger workforce brings a higher risk of employee accidents and mistakes, which raises the cost of workers' compensation, general liability, and similar policies.
• Annual revenue. Increased business revenue is associated with higher risks and more frequent claims, which results in higher insurance costs.
• Business location. Crime rates, population density, severe weather, property values, and other regional factors affect how much you pay for business insurance.
• Coverage limits and deductibles. Policies with higher limits cost more but cover more expensive claims. Choosing a higher deductible can lower your premium, but your insurance won't activate until you pay the full amount.
• Claims history. A hospice professional who has filed an insurance claim in the past will pay more for insurance than one with a clean history of claims.

Yes, hospice care workers and facilities typically must carry malpractice insurance. Here are the top reasons you need malpractice insurance:

• State laws require coverage. Some states require malpractice insurance for doctors and other healthcare professionals to practice clinically or to participate in state-run programs that assist with claims. More often, regulations require the employing home healthcare agency, assisted living facility, or nursing home to carry liability insurance.
• Your employer requires insurance. You will likely need malpractice insurance to work for any healthcare network or healthcare facility, such as a home health agency, hospital, or medical office.
• Hospice professionals face high risks. If a patient or family member files a lawsuit over a medication error or negligent care, you could end up paying hundreds of thousands of dollars in attorney's fees, court-ordered judgments, or settlements.

In addition, you might need general liability insurance to sign a lease, qualify for a loan, or get licensed by a state health department.

Even when insurance isn't required, you should consider carrying it to protect against costly lawsuits and qualify for contracts. Otherwise, a single accident or mistake could financially devastate your business.

When choosing liability insurance, it’s important to understand whether your policy is claims-made or occurrence-based, as it affects when you’re covered—and for how long.

• Claims-made policies provide coverage only if the claim is made while the policy is active (or during an extended reporting period, if added). This means if a lawsuit is filed after your policy ends, you’re not covered, unless you purchase tail coverage.
• Occurrence coverage, on the other hand, provides protection for incidents that happen during the policy period, even if the claim is filed years later. These policies are typically more expensive upfront but offer long-term protection for past services.

For example, if a hospice nurse assists a patient during their policy period, but is sued years later after the policy has ended, an occurrence policy would still cover the claim. A claims-made policy would only provide coverage if it was still active in the year the claim was filed or extended with tail coverage. 

General liability insurance is most often sold as an occurrence-based policy, while professional liability / malpractice insurance is typically a claims-made policy. Understanding the difference can help you avoid unexpected gaps in coverage—especially in fields like hospice, where claims may arise months or even years after care is provided.

You should consider buying tail coverage if you leave a job, retire, or switch insurance carriers. Tail coverage provides protection for incidents that happened while your malpractice policy was active, but were reported after the policy period ended.

For example, if a nurse fails to document a hospice patient's allergy, the nurse could face a lawsuit months later when the allergy is triggered. Tail coverage would pay for a claim submitted even after the nurse had retired and canceled their coverage.

Since medical malpractice claims can arise months or even years later, tail coverage ensures protection against lawsuits for patient care performed in the past.

Hospice care providers often buy these coverages as part of a comprehensive risk management strategy to protect their practice and career:

• License defense coverage pays for legal fees and other costs if you face an investigation or malpractice lawsuit that could affect your status as an RN, CNA, or other board-certified healthcare professional. It's often available as an add-on to your professional liability policy.
• Needlestick or occupational accident insurance (OAI) protects against injuries from needles or sharps, as well as exposure to blood and other bodily fluids.
• HIPAA defense coverage covers legal proceedings, fines, and penalties related to HIPAA violations, and can typically be added to medical professional liability insurance.
• Employment practices liability insurance (EPLI) covers legal costs if a hospice care professional is accused of wrongful termination, discrimination, or other violations of employee rights.
• Abuse and molestation coverage pays for legal costs related to claims of sexual misconduct or abuse, such as neglecting to conduct a background check.
• Directors and officers (D&O) insurance shields board members and officers from legal costs related to decisions they made on behalf of your business.
• Excess liability insurance, similar to commercial umbrella insurance, boosts the coverage of your general liability policy or professional liability policy once the limit is reached on a claim.

These additional coverages help ensure you’re protected against less common, but potentially costly, risks in your practice.

Hospice care agencies and professionals can take several steps to reduce their insurance premiums. Here are some of the ways to keep costs low:

• Shop around. Insurance carriers often sell similar policies at different rates. To find a good price, compare insurance rates from trusted carriers with Insureon's easy online application.
• Pay the annual premium. You can choose to pay your premium once a month or once a year. Insurers offer a discount when you pay the full annual amount instead of monthly payments.
• Work with an agent. A licensed agent can help you find coverage that fits your risks and your budget, without any extra add-ons you don't need. They can also navigate the insurance market to find cost-saving bundles and the best rates for your business.
• Keep continuous coverage. Stopping and starting coverage is a red flag for insurers, and may end up costing more in the long run.
• Choose higher deductibles or lower limits. Policies with higher deductibles and lower limits cost less, but make sure you can easily afford the deductible, as it must be paid in full before you can collect on a claim.
• Manage your risks. Proper documentation, clear communication, and other risk management techniques can help you avoid disputes and subsequent lawsuits.