By Stephen Tweed

I was sitting in my office early one afternoon when the phone rang.  It was a young woman who identified herself as a paralegal working for a law firm in Pasadena, California. She asked if I would be available to talk with an attorney in her law firm about serving as an expert witness in a lawsuit.

My first reaction was, “I don’t know anything about being an ‘Expert Witness’.  I don’t think I can help you.”  But I was curious, so I agreed to a conversation with the attorney.  This short conversation led to a two-year adventure of serving as an expert witness for a home care company and the owner who were being sued by the previous owner for anti-competitive practices and copyright infringement.  

Over the next two years, I …

• Flew from Kentucky to California for a 90-minute deposition.
• Conducted research on the defendant company and their local marketplace
• Flew from New York to California to testify at trial, only to have the judge declare a mistrial and reschedule for six months later.
• Few from Kentucky to California to testify at trial – what an amazing experience. 
• Having the parties settle out of court after our testimony for an undisclosed amount.  

One Huge Lesson

The one big lesson I learned from this experience that will benefit you as a Home Care Company Owner … “Be properly insured.”

I learned that the cost of a lawsuit like this is not the judgement against you and your company. It is the cost of defending the suit, and your time and stress during the process.  These owners spent over $500,000 and two years of their life defending a lawsuit asking for $1.7 million dollars.  We know that their insurance company eventually agreed to settle the case for an amount that was not disclosed.  

Expert Witness in Three Lawsuits

Since that case, I have been retained by law firms to serve as an expert witness in three other lawsuits.

• This case – the previous owner of a home care company suing the buyers for unfair competition and copyright infringement
• The same seller suing a hospital system failing to uphold the contingencies in their contract
• The family of a home care client suing a home care company for negligence after a caregiver quit, and moved in with the client who later fell, was hospitalized, and died.
• A consulting firm suing a home care company for copyright infringement. 

In all of these cases, the cost of defending the suit was far greater than the judgement paid by the defendant. 

Five Types of Insurance You Need

Over the past fifteen years, we have worked with insurance broker, The Solutions Group, to help home care company owners understand their potential liability, as well as make sure they are properly insurance.  Back in 2015 we wrote a research report examining the types of insurance you need.

• General Liability – this covers These risks include bodily injury, property damage, personal injury and advertising injury caused by direct or indirect actions of you or your employees. That’s a fancy way of saying that injury to a third-party, whether physical (bodily injury) or mental (personal injury) and damage to their stuff (personal property) is covered under general liability
• Professional Liability – also known as “Errors and Omissions”, covers damage to a client due to the actions or inaction of you or your staff. For example, if your home health aide ignores bed sores, or treats them outside of the standard of care, you have a professional liability claim.
• Non-Owned Automobile Insurance – is designed to cover your agency in the event that an employee is involved in an accident while on the job using their own vehicle or the client’s vehicle. The injured party will sue the caregiver, the caregiver’s insurance company, and the caregiver’s employer – that’s you.  
• Crime Coverage – also known as “Bonding”.  This covers you and your company in the event that an employee is accused of a crime.  The most frequent incidence of crime is a caregiver accused of stealing from a client.  Coverage for theft from a client is called ‘Commercial Crime Coverage’ or ‘Employee Fidelity Bond’ but is typically referred to in the industry as ‘Bonding’.
• Employment Practices Liability – covers you against claims of wrongful termination, sexual harassment, discrimination, invasion of privacy, breach of contract, emotional distress, and wage and hour law violations. We have had several members of our Home Care CEO Mastermind Groups undergo a U.S. Department of Labor audit for minimum wage and overtime violations.
• Cyber Liability – protects you and your agency from liability related to loss or theft of information, HIPAA violations, or unauthorized use of employee information.  

Other Insurances You need

In addition to these various types of liability coverage, you also need insurance to cover your building and its contents from fire, windstorm, or flood. And you need to carry Workers Compensation Insurance to cover injury to an employee while on the job.

Talk with The Solutions Group

Review your insurance coverage at least once a year to make sure you are adequately covered.  I suggest working with an insurance broker who specializes in covering companies that provide in-home care to older adults.  As you know, the Home Care business is unique, and we face some issues that many employers do not, and a general insurance agent will not be familiar with some of our unique issues.

We suggest that you talk with the home care insurance experts at The Solutions Group … a Home Care CEO Resource Partner.  

Jason Miller, VP New Business, The Solutions Group, San Antonio, Texas

Phone: (210) 618-0314 | email: jason@solg.net