How to Insure & Bond My Home Health Care Business

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In order to present your health care business as bonded and insured, you must comply with local and state regulations. In many states, you cannot obtain a home health business license until you provide evidence of sufficient coverage. Operating a business that is bonded protects consumers in the event that something unexpected occurs, such as employee negligence or theft. Business insurance generally aims to minimize the owner’s liability. For instance, if an employee gets injured at a client’s home, insurance will cover the employee’s claims so that the owner’s personal assets are not jeopardized.

Review applicable regulations, which vary by state. For example, you must submit a surety bond of at least $500,000 to obtain a home health agency license in Florida, while the requirement is $10,000 in New Jersey. The U.S. Department of Health and Human Services provides information online regarding home health agencies. Find a link in Resources.

Contact different bonding companies and complete their applications. Most bonding companies require extensive company information and run background checks to review the business. Your personal credit history might be evaluated before a company makes a decision. Some companies require all owners to file personal statements.

Obtain insurance premium quotes from multiple companies and ask if any discounts are available. You should consult with local and national companies that extend coverage to your area.

Determine whether your state’s licensing authority offers bonding and insurance coverage. For instance, the Virginia Department of Health does not provide surety bonds but accepts coverage from any licensed company in Virginia. Ask for referrals to local carriers when no state sponsored program exists, especially if you have been denied by other companies or have poor credit. The Small Business Administration is another source of help if you cannot get coverage. Find a link in Resources.

Select your coverage, which can be greater than the state’s minimum requirement. Pay all premiums and obtain proof of payment as well as certificates to send to the regulatory agency.

Tips & Warnings

  • Be prepared to wait several days before receiving an approval about your bond and insurance applications. Credit scores and credit history play important roles.
  • If the company's coverage lapses, you must renew quickly or risk state penalties plus financial liability.

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