Preparing the Home Care Industry for 2021
This past year has brought significant changes to many industries as they navigated the effects of COVID-19. Below is an overview of the effects to the home care industry and what employers can do to be better positioned in the marketplace.
Impact to the insurance industry as a whole
Even prior to COVID-19, several key events occurred which began impacting pricing:
2018 California Wildfires – over $12 billion in losses severely impacted the reinsurance marketplace causing a ripple effect to insurers, many of which weren’t even in the property insurance marketplace.
AB 218 – This law was signed last year which eliminated many of the statutes of limitation for people to file child abuse claims. Though this related to those who work with children, the same carriers who insure the home care industry also work with industries serving children. Claims have risen 500% since January 2020.
Social Inflation – Recent trends have shown an increase in litigation, claims costs and plaintiff friendly legal decisions.
What impacts will COVID bring?
SB 1159 – The presumption that COVID claims will be compensable under workers’ compensation is severely impacting the costs towards California insurers. Recent estimates suggest over $2 billion has been paid to date.
Healthcare companies hit hardest – The vast majority of the claims are coming from the healthcare industry. With the heighten risk, we’ve seen carriers exit the marketplace and a hardening of the market for those remaining.
What can Employers do?
Make sure all your documentation is in order. This includes:
If you have had any incidents – proper documentation regarding what was done in response to the incident and if any changes were made moving forward to keep incidents from happening again.
Post all CDC, state and local health department required information and postings.
Make sure you are being properly represented to the marketplace. Most insurance carriers are improperly categorizing home care companies as healthcare risks. The exposures to a home care companies are far less risky than that of a hospital or health center. However, without proper discussion between your broker and underwriter, you will be categorized as a health risk. Make sure your broker is communicating the true exposure of where your employees work and what they do and the exposures they are truly facing to help you get the best pricing.
To discuss your situation and prepare for 2021, contact Rancho Mesa Insurance Services at (619) 937-0164.