All Your Insurance Questions Answered (Gavin Studner Pt. 2)

[ 00:00:24 ] Hello and welcome everyone to Home Care U. Thanks for joining us live today. I'm Miriam Allred, head of partnerships here at Careswitch. For those of you joining us live for the first time today, Careswitch is a freemium model home care agency management software. We're the first of its kind to launch a free model. So, if you are still on paper or don't love your software or looking for a new alternative, head over to Careswitch.com to check out our software. I also want to start by saying happy April, or happy spring, or happy Q2—whatever this moment in time is for you. I hope you are doing well, and I appreciate you spending some time with us today to learn more about insurance.

[ 00:01:16 ] So a couple of housekeeping items before I introduce our guests and before we get into today’s discussion. We are in a Zoom webinar, so at this point in time, you’ve probably used Zoom a million times, but let me just go through a couple of things. You’ll find a chat box and a Q&A box here. We would love to have you engage with us and ask questions as we go. So don’t be timid in asking all of your insurance questions today. To kick us off and kind of start some engagement, I’d love to hear who’s joining us for the first time today. So, find that chat box, jump in there and put 'first timer' or

[ 00:01:50 ] 'first'. If this is your first time, make sure to click the subscribe button and then the bell icon and is your first time in a live home care youth session um and like I mentioned ask questions as we go we want this to be a dis a discussion and conversational and no dumb questions or stupid questions today insurance is a pretty complex topic and so we want to make sure you leave with the answers that you came for so without further ado I will I’m excited to be joined by Gavin Studner. Gavin is a sales executive at Odell Studner insurance brokers and consultants Gavin great to have you with us for those that weren't here last week why don't you go ahead and introduce yourself briefly talk about your background and home care and insurance and anything else you want to share with us today absolutely I will break the ice and say this is my third home care you second one presenting last week and this week but I was on for Jeff’s presentation I think last month

[ 00:02:44 ] so proud to be a third timer and a fourth and a fifth whenever the next ones are my name is Gavin Studner from Odell Studner Group for those who are not familiar with our firm we are headquartered in king of pressure Pennsylvania we have About 95-96 employees, um, we have been in business dating back to 1927 and my great-grandfather and, um, a corner shop insurance firm at the suburbs of Philadelphia with just a few people. And we've grown since then and proud to be one of the largest regional national insurance brokers with uh specialization in temporary staffing and home care. So, home care is all I do; home care is all I love. So, um, it's a pleasure to be here with you all and hopefully be able to share some knowledge.

[ 00:03:28 ] Awesome, you're the home care insurance guy, I'm going to just label you as that today. So, thanks for being here. Um, last week we took a deep dive on workers' compensation. Comp, we covered that topic, you know, start to finish, went from zero to a hundred in that hour. If you have questions about workers comp, I urge you to go back and listen to that episode; it was really deep. Today, I'll preface and say we're going to kind of zero out a little bit and talk about home care insurance 101. Today, we're going to go wide and not as deep and cover all of the different insurance types or coverages that your home care agency needs to have, so

[ 00:04:15 ] all of the different insurance types that you need; and we're going to talk through scenarios, Gavin and I were just before this call talking about you know it's one thing to talk About what the coverage is and what it means, but it's another thing to talk about the applications and what it actually looks like in your agency. So, we're going to talk through a lot today, so take notes, I know I've got a pen and paper to kind of jot down thoughts as we go, but follow along with us and like I said, ask questions in the chat so we can cover a lot of ground. So have a great day and I hope you guys enjoyed today's talk. Thank you so much for watching and we'll see you next time bye-bye. Let's start at ground zero, Gavin. Talk to me about the most basic coverages that a home care agency must have.

[ 00:04:55 ] Most basic coverages that a home care agency must have. Okay. So, for licensing purposes, an agency typically has to get professional liability, general liability in order for them to even get licensed. Then we go into other coverages that they need, which is auto insurance. They typically need property insurance, although a lot of people aren't having that conversation. They need to have workers' compensation. That is basic. Auto, professional, general liability, and workers' compensation. And they should definitely have property as well. Basic, basic. That's great. We just needed to establish that baseline. One thing that I want to clarify, you mentioned what they need to be a licensed business, which we're going to talk about in a second. So, what do you mean by that? Is that the baseline? That's what they absolutely have to have opening their doors.

[ 00:05:46 ] Typically, the states require you to have workers' compensation, professional liability, general liability. You have to show a certificate of insurance that you have those in place. So yes, before opening your doors, you have to have that in place. We have agencies who people come to us in the last-minute scramble. I didn't put this in place. I need this to finish my licensing. I have clients lined up. I have employees waiting on me. And it's a last-minute scramble. And it's not fun for us. And it's not fun for them. So, we always recommend, yes, you need to be proactive. If there's anybody on here who is in the early stages of even thinking about opening up an agency, be proactive. You can always get your insurance set up ahead of time and then start it later.

[ 00:06:28 ] You have about a 30-day window of when you get your insurance quotes in when you can find coverage. So be proactive. Start thinking about this now for when you're ready to launch. Okay. That makes sense. And insurance probably isn't super top of mind when starting a business. You know, I think of like this checklist of what you need to start a business or a home care agency specifically. Insurance probably, you know, falls somewhere in the middle. And so, like you said, you know, make sure you're proactive and thinking about insurance when you're starting up. Absolutely. And a lot of people think, okay, well, we talked about it last week. Insurance is your second-largest expense line for home care. And so, they think, okay, I'm just going to put it all, you know, I'll just buy coverage. I'm going to do this. I'm going to put it all in. And that's really the best way to do it. Stay in the same business for like, you know, a few days beforehand, I have to start thinking of it like auto insurance or homeowner's insurance. You go on to progressive.com or Liberty Mutual or Geico, type in your name, your zip code, you know, driver's license number, boom, spits out a quote. Commercial insurance is not that simple. It takes, it's a longer process. It's a longer runway. So, give yourself time.

[ 00:07:40 ] Is it also safe to say, you know, when we're talking about licensure and home care, there's licensure and non-licensure states, coverage and essential coverage vary state to state. Is that a safe assumption? So unlike workers' compensation, coverage is the same state over state. It's not where you have competitive states and monopolistic states like workers' compensation. Professional liability, general liability, those coverages are the same across all states. Auto, property, outside of workers' compensation, these are all coverages that cross state lines. So, this is, when it comes to state regulations, everything outside of workers' compensation is a lot more straightforward. But when we talk about regulatory issues, governing boards, workers' compensation is a lot more nuanced state to state. Okay. Okay. I'm glad we made that distinction. That's useful for me to understand.

[ 00:08:37 ] And then it's more standardized. Whereas last week with workers' comp, you know, there's a lot of state-by-state nuances. So that's really helpful. So, let's, you know, go a layer deeper on these essential coverages just to make sure we're clear on what they are, what they cover, and what the use case is. So, let's start with professional liability. You know, that's kind of the generic essential coverage, but just to make sure we're all on the same page. Explain. What that is, what it covers, and why it's essential. So outside of workers' Compensation, this is your most important insurance coverage to protect you and your insurance, your agency, by using insurance to protect you and your frontline. So really what it is, is it protects you against mistakes made by your caregivers while out in the field.

[ 00:09:28 ] It's also like E&O insurance, if anyone's ever heard of that, errors, and omissions. If you make a mistake. In your professional duties as a caregiver, and your client sues you, or as bodily injury or property damage due to your negligence or your fault. This coverage is going to protect you from a legal defense standpoint, from a settlement standpoint, so that you're not paying out of pocket in the event that your caregiver, who's again, it's hard to control in home care your caregivers while they're out in the field. It's a very different industry rather than manufacturing or construction where you're on site with them. This protects you from what they do that causes accidents out in the field. Okay, okay. Can we talk about a claim in this instance?

[ 00:10:17 ] I know you're explaining where this covers the caregiver, etc. Can you think of a claim to better paint the picture here? I can think of some multiple claims, absolutely. This is, again, a very concerning area for us. I think it's really important for home care agencies and why it's required that you have it. So, we had a claim where a caregiver, remember the McDonald's claim where they dropped hot coffee? Somebody, and it was too hot, and it was a multi-million-dollar lawsuit, and it made a big deal. We see claims for that as well. Where a caregiver will drop maybe tea or coffee accidentally on the client. Mm-hmm. And it's going to affect elderly individuals. So those burns are going to be severe. And we see claims in that area where the normal people wouldn't think about that being a claim.

[ 00:11:13 ] But it is. You injured your client due to your negligence. You tripped. You spilled. And they got injured from your caregiver. That's one. Another one that is, unfortunately, a quite common occurrence is last week we talked about slip trip fall accidents for caregivers in the bathroom. It's very wet. It's typically a smaller enclosed environment. That's workers' compensation when your caregiver gets injured. But if your caregiver slips, trips, or falls in the bathroom while they're holding up your patient or your client, and they get injured, that's no longer workers' compensation because workers' compensation is for your employee only. That's professional and general liability where the client is injured because your caregiver slipped. Mm-hmm. Okay. So, this is a third-party coverage to protect you against your client getting injured due to essentially your fault.

[ 00:12:09 ] Sometimes there are times where caregivers don't go into the bathroom with the client because, you know, we're dealing with more elderly, strong-headed individuals who want to be left alone in their private time. That's okay. There are times where a caregiver is outside of the bathroom waiting to be called in to the client. But the client slips or trips by themselves in the bathroom. And God forbid, you know, they break some bones, or they die by falling, we've seen it where family members end up suing the home care agency because the caregiver wasn't in the bathroom at the time. Even though the client might have asked and requested to be alone because the caregiver wasn't there to assist, that ends up falling on the agency. So, it's a tricky situation for home care agencies to avoid.

[ 00:12:59 ] So it's a tricky situation for home care agencies to avoid claims when it comes to professional liability. But those are some of the more claims that we do see. Okay. And I'm glad you made the distinction of, like, workers' Comps and general liability, like, where some of those lines are because I know that was a little bit gray for me. I'm putting you on the spot, but I'm curious, are there misconceptions or instances where you may think that something is covered under general liability that isn't? You know? Can you think of any examples of what an owner may assume is covered under this, but in reality, isn't? Some people think that their auto is included under their professional liability, general liability policy. It's typically GL and PL, general liability, professional liability, are handcuffed in the same policy.

[ 00:13:48 ] It's actually always that way where they're the same policy because they go hand in hand. Some agencies think that their auto liability is included under that. Not true. That's a whole separate coverage, which we'll get to. But that's probably the most common misconception that we hear that they think is included in this but it's not. Perfect. That's a really good example of assuming that another type of coverage is lumped in under here when in reality it's not. I think that might be a good segue, seeing someone's in here. Is auto typically covered under corporate umbrella policy? Let's transition into auto. I want to dive deeper into auto and property because I think that's where a lot of questions and misconceptions lie. So, let's move towards auto insurance.

[ 00:14:38 ] Can you cover high-level what's included, what's not included, and what some of those misconceptions are with auto? Sure. So, with auto insurance, sometimes owners have vehicles that are owned under the corporate name and wanted to be included in the corporate policies. Which they should be if they're in the corporate name. So, you have the owners, executives, cars. And you have the caregivers, cars. They're driving in between clients. Sometimes they're doing errands for clients. Those are what you typically have inside your auto package policy, your auto policy, within your package policy. So, one question that we typically see is can employees use their own personal autos under your auto policy? So, like I said, you have your owner, executive, cars specifically stated on the policy that you want to be included.

[ 00:15:37 ] And you have the employees. For the employees, what you have is called hired and non-owned auto. And what hired and non-owned auto is, is hired coverage is used for when you or your employee drives a rented, leased, or borrowed car for the business. For the caregiver specifically, it's the non-owned section of the hired and non-owned coverage. And what non-owned is, is it's for employees that use their own cars for business purposes. So, it's not for caregivers that drive to and from work to them from their house, but it's for the in between. So, if they're going from client to client for business purposes, work purposes, that means they are driving on behalf of the business. That's your non-owned exposure right there. Or if they're running errands for clients, again, that's for the business.

[ 00:16:34 ] So that's where that non-owned, hired, and non-owned piece comes in. And it gets concerning. It's a very, very important coverage to have hired and non-owned auto within your auto policy. And I get concerned when last week, a couple of weeks ago, time just seems to be going by. So fast. I had a conversation with a sizable home care agency. There were $40 million in revenue. You know, that's top 1%. You think that they would have their policies in place and be covered. But the concerning piece was, was that the owner's policies were placed through Progressive online through the corporate name, which is okay. You can do that. You can go through a broker and place it through Progressive. There are also corporate policies as well through Progressive.

[ 00:17:28 ] But there was within that Progressive policy, there was a non-owned and hired line item. But it was only for the owners and their vehicles listed. It wasn't for the caregivers themselves. So even though hired and non-owned was listed on that Progressive commercial policy, it was only specifically for the owners and the vehicles that are listed on that policy. Not for their hundreds of caregivers. Not for their hundreds of caregivers that are out on the road doing business. So, I don't want an agency to get concerned if there are smaller agencies on the line or middle market agencies that, oh, my gosh, this is very concerning. I should have known this. There are very large agencies that this falls through the cracks and they're not aware. And that's okay. Yeah, really interesting.

[ 00:18:23 ] And I'm wondering if we're kind of indirect. I'm not directly answering Raymond's question here about, you know, what's covered under the corporate policy. Maybe an action item here is, Raymond, you could maybe clarify. Some people may be part of a franchise group and there may be coverage at the franchisor or corporate level. And, you know, there may need to be some steps of reviewing those policies in depth. Like you just said, you know, the non-owned part covering the caregivers. Like that's a huge element here that was missing that, you know, maybe an agency needs to go upward to see what's covered in their policies. Definitely. After this, I always recommend take some notes, look at your policies, ask any questions you have afterwards. You mentioned the franchisor-franchisee relationship because it's very interesting.

[ 00:19:16 ] So the franchisor's responsibility is not to come in and protect the franchisee. The franchisee is a DBA. They are doing their own business, own operations, own entity. What the franchisor has is something called vicarious liability. So, if a client sues the franchisee and the franchisor, the franchisor has their own coverage to protect themselves against acts of the franchisee. So, the franchisor will not come in and protect the franchisee. It's up to the individual franchisee to go ahead and get that coverage covered. That's needed. And it's funny you say that because that's a very common thing that we hear. My franchisor is going to protect me. They have the coverage. I'm okay. No, that is not the case. Okay. And I don't know all these nuances. So, it's good to hear you vocalize this.

[ 00:20:10 ] You know, we've got some franchisees on the call today. So just bringing awareness to some of this is a good place to start. You know, we don't want to get into all the nuances of what this looks like. Yeah. But bringing awareness so that, you know, franchisees know what to be watching out for and how to review their own policy so they can know where to make adjustments. Absolutely. Absolutely. So, again, not to get too deep into the weeds on things because this is a 101. There's a lot of coverages. There's a lot of definitions and examples. So, I won't get too deep. Let's just round out auto insurance with a scenario. I want to make sure this is really crystal clear because I see this a lot.

[ 00:20:49 ] Scenario: Say an employee is running an errand for a client and gets into an accident. What does the business insurance, auto insurance cover? And if and when does their personal car insurance kick in? Or, you know, like where is the overlap and what's covered where? So, I'm going to try not to dig deep. But, again, I'm an insurance nerd. So, it's very hard for me not to because I learned this at the dinner table. At a very young age about insurance. When it comes to specifically the caregiver driving on behalf of the agency, they're driving in between clients, let's say. So, a claims example. A caregiver is driving from client A to client B. That's driving on behalf of the agency to the next job.

[ 00:21:42 ] If they get into an accident, there are two things that can happen. One: their personal insurance is primary. So that will kick in. And then the corporate insurance is secondary. So, you kind of have two layers. Personal insurance layer and then corporate insurance layer second. There are some insurance policies that require home care agencies to collect certificates of insurance or it's blanking auto ID cards. To show that your caregivers have proper insurance in place. Some policies state that if your caregiver does not have personal insurance in place, we will not drop down and protect you. So, it's actually very nuanced and very interesting. You have to dive deep into the policy, into the weeds, to see if you are with a carrier where, okay, if my caregiver doesn't have their own personal insurance on their auto, will my corporate insurance protection policy, drop down and protect me in this case?

[ 00:22:51 ] Or is it that they don't need a personal auto policy in place, my corporate will protect me anyway. So, there are nuances when it comes to this that it depends on each carrier, you're with and the policies. I cannot tell you how many agencies just think that 'hey, I'm going to get the auto policy. I'm good. I got a package policy. I'm fine. I got to focus on running my business. And we get it. You have to focus on running your business. But the coverages and the wording within these large insurance contracts is so important. And that's just one example. That's perfect. That's like probably the most specific use case here that I have heard and I'm aware of. So, I think we covered that really well.

[ 00:23:35 ] And part of this like 101 is just like piquing interest and bringing awareness to this thing. So, we're not going to keep drilling down there, but it's like you just explained what happens, why, and what to do about it. And now the owners know. The owners can kind of take action there. The last thing on auto insurance, we talked about non-owned and hired. Just to clarify, can those be added to existing packages, or do you purchase those separately? And what's your recommendation there? So those should be included in your package. So, you have your general liability, your professional liability, and then you have your auto. Those should all be included together. Now, if you have company-owned vehicles. There are some insurance carriers that will not insure company-owned vehicles, so you might have to place it separately.

[ 00:24:22 ] Kind of like that example of how I said the progressive commercial policy had to be placed separately for that company because they have five owner vehicles on that policy. So, it had to be placed separately. Now, be careful when you do that because, like I said, the hired and non-owned has to extend to the entire corporation, not just those individuals on that policy. Okay, perfect. Yeah, I just wanted to make that very clear of where that gets packaged. Good question. Awesome. Let's move on from auto. That was really good. Let's talk about property insurance. That's another one that's standard across the board. And so, let's start with what it is, kind of a specific use case, and then any misunderstandings that come with property insurance. Sure.

[ 00:25:09 ] So property insurance protects you and your personal property that's owned by the business. Okay. That's pretty straightforward. Misconceptions, absolutely. A lot of home care agencies rent space in offices. They don't own a big office building. They are renting space. So, the common response I get from agencies who don't have property insurance, which is very common for agencies not to have property insurance, unfortunately, because they're not having the conversation with their broker. The broker should be having the conversation with them, actually. And so, they'll be saying, 'I'm renting a space. I'm leasing. I don't need to have property insurance in place. This isn't my building. I don't own the building. I don't need it.' My question is, well, do you not have property in your leased or rented space? Do you not have computer equipment?

[ 00:25:59 ] Do you not have office equipment? Do you not have anything in there? And usually the question is, well, we do, but, you know, maybe $15,000. Well, okay, you have $15,000 worth of stuff. And the building burns down. You're just out $15,000 worth of stuff. Whereas you can pay pennies on the dollar to have that insured and protect yourself if the building does go down. Because your business personal property is your property to insure. Even if it's somebody else's starts to fire in the office building, they're not protecting you and your personal property. That's first party. That's for you to insure. Not for them to insure. That's not their job. So that's common. That's number one. Number two is that I'm going to try not to make things complicated and make it really high level.

[ 00:26:53 ] There is within your general liability policy, it's weird. Within your general liability policy, there's a line item for damage to rented premises. And then there's a limit right there. And you think that wouldn't that be under the property section? Because it's damage to rented premises. Pretty self-explanatory if I cause damage to a premises that I rent. But it's included in your general liability policy. And typically, it's thrown in for $100,000 limit. Well, if you use an average of, you know, $150 a square foot, and you have a $10,000 space that you're leasing, $100,000 is not enough to cover the space that you lease. So, I recommend everybody on this call. If you go ahead and take the amount of square footage that you lease and you multiply it by 150, that is the average limit that you should have under your damage to rented premises limit under your general liability policy.

[ 00:27:51 ] So if that limit's too low, which typically it is, it doesn't cost much, ask your broker, how much does it cost to increase it from $100,000 to maybe $250,000? It's truly pennies on the dollar. I love that level of specificity. You know, here's what it is. This is what you can do to go and double check. So, to clarify, you know, that's a line item under your general liability. Property is separate. Does it make sense to leave that line item, say at that $100,000, and then to increase your property insurance? Or I guess where is the overlap of those two coverages? So great question. So, if you own the property, you own the building. That goes under a property policy. Same with your personal property that you own.

[ 00:28:40 ] That is under a separate property policy. If you lease or rent, that's where you have your damage to rented premises, and that's where you have to have that limit. So, it depends on if you lease or if you go ahead and you own the property outright. Got it. Got it. I missed that distinction, but that makes sense. No, it's a good question. We get that a lot. It's good. There's a lot of nuances here, and I'm trying to keep up. It's insurance. It's meant to be confusing. Seriously. And I'll just kind of pause here, too. Those of you that are listening in live, thanks again for being here. If you have more nuanced questions, ask those in the chat, and we'll answer those because I want to make sure we get into enough nuance of these questions that we have.

[ 00:29:20 ] The last question that I have on property that I want to be clear is I hear a lot of times these new owners want to use their home or their condo as their office location. And in some states, I understand that that's okay. Kind of like the auto question, where does business property insurance coverage overlap with, say, their own home auto insurance plans? It's interesting because a lot of insurance carriers do not want to insure your home. That's why you have homeowner's insurance. It's very different. I mean, GEICO will go ahead and insure your home. But there are carriers like Hartford that will not insure your home. That's not their purpose. They're for corporate policies. What we typically do and recommend for clients who have home offices is: We say, go ahead, you can put your business personal property, the property you have in your home that's under the business, you can put that under the corporate policy itself.

[ 00:30:27 ] And you have your separate homeowners’ policies. There are some carriers, very few, who will go ahead and insure your home. And they will go ahead and say: Well, if the owner owns their own house and they're 100% or 50% owner in the legal corporate entity, then we will include it under the property section of your corporate policy. Very rare, not common. There are some agencies taking it a step further that just go ahead and take their homeowners insurance and expense it back to the company. Because they're operating outside of the company. And for tax purposes and accounting purposes, they do that, just an expense back to the company. It's a write-off. So, I'm not going to get into the accounting part of it. I'm definitely not an accountant. But there are multiple ways to go ahead and go about that.

[ 00:31:17 ] Okay. That's perfect. And we can kind of leave that where that is. Because I was curious, yeah, what that looks like. And it sounds like there are ways to do that. And there are different approaches that you can take. It's just kind of up to you. It's up to the insurance provider, the carrier, and kind of what you have set up personally. Exactly. Exactly. Insurance is meant to be confusing. I didn't understand when I got into the business why they made it so confusing, especially with getting into property and putting it under the general liability and everything else. My guess is to keep us in business. On our toes. No, but you're doing a great job of like dumbing it down for people like me that just this is not my wheelhouse.

[ 00:31:58 ] But I need to have like a baseline understanding of what my coverage needs to look like. So, let's kind of end there on property. One that, yeah, Wynette is asking about, and I've got it on my list here too, is abuse and molestation liability. Can you speak to what that is and when an agency needs to have that coverage? Yeah. So, I see that. She said what policy does that fall under? Yeah. So that's included in your general liability, professional liability package. And for home care agencies, it's typically always included. If the carrier knows that you're a home care agency, which they should if they're running your business, they always include that. It just depends on what limit they include that in. So, some carriers will do a small sublimit of $25,000, just a throw-in coverage.

[ 00:32:54 ] Other carriers will do $100,000. Some will do $300,000. It's become a much more difficult coverage to get higher limits on. And it's because there have been a lot more frequency of claims. And when you have sexual abuse and molestation claims, they tend to be higher dollar as well. So, carriers have in the past where they will go ahead and offer, you know, throw in $1 million worth of coverage or $500,000 worth of coverage, it's now becoming less and less. And it's because carriers are getting hit on that coverage. It really protects against physical abuse, sexual abuse, mental abuse. It's a third-party coverage against your agency. So, if you're working with children or vulnerable adults, this is a coverage that you need and you probably already have within your package as a matter of fact.

[ 00:33:48 ] Okay. That's perfect that it's covered. It's in there, you know, kind of as a line item. And you were speaking. Speaking to the limits, is there anything that an agency can do themselves to increase that limit? Like, is that a conversation with your broker about your business? Or is there anything else that they'll look to adjust that limit? So, some carriers do not offer any increases on those limits. Some carriers will increase the limit for a price, like anything else. It really depends on the carrier that you're with. If you're with one of the big four carriers for home care in the nation, they will go ahead and they probably already have, you know, pretty high limits. And you can go ahead and ask if they can bump it up.

[ 00:34:35 ] But again, it's a difficult coverage to increase right now just because of the marketplace. Okay. I wanted to, yeah, just clarify that. When you say big four, do you have those names on hand? People may be asking like, oh, who are those big four? I do. I don't want to give all my secrets away. I will give you the biggest one, though, which is our biggest writer. We do a lot of business with Philadelphia Insurance Company. They are. And I'm not just saying that because we're headquartered right outside of Philadelphia. Nationally, they are by far the largest when it comes to writing home care. Okay. Okay. Yeah. Just curious there. Good question from our audience. Probably butchering that. Do we have to have a broker, or can we deal directly with the carrier?

[ 00:35:26 ] That's a good question. That is a good question. From my perspective, you have to have a broker. There are places called direct writers. And basically, what a direct writer is, is you're paying the same amount as you would if you're going to a broker because you're dealing with an agent for that direct writer. So, for instance, when you go to State Farm for your personal insurance, let's say, you're dealing with an agent at State Farm who makes commission, just like a broker does, and then they place your business with State Farm, the only carrier they represent. The problem is, is when you do that and you go directly to a State Farm, if you have a claim, you are fighting the insurance carrier one on one. And not everybody here is maybe an insurance expert.

[ 00:36:13 ] If you are, then go ahead and fight on against the insurance carriers. But typically, you need a broker. You need a broker in between who knows the insurance lingo, who knows the insurance contracts and what to look for to help get your claim resolved in a timely fashion because we've heard horror stories. When it comes to commercial insurance, it's not the same as personal insurance where there are a ton of direct writers. There are a handful of direct writers out there, and typically they're not for the home care industry. You might see them for, like, manufacturing clients, but not for home care specifically. Okay. Yeah. That makes a lot of sense. And I'm glad that that was asked. And it's okay for you to be biased here.

[ 00:36:54 ] You know, you're a broker, but you explained that well and that you can go either route. But there are pros to going with a broker when it comes to commercial and when it comes to home care specific as well. Yeah. And it's kind of like, yeah, that's actually perfectly said. Let's go ahead and leave it at that. Okay. Okay. Let's transition into the next question. So, I'm going to jump into talking about some of the coverages that are often missed or misunderstood. I know we've kind of talked about, like, the baseline coverage. There are other insurance coverages that agencies can opt in, you know, respectively because they want to, or they need to. An example would be, like, cyber liability. You know, that's one that we could discuss.

[ 00:37:44 ] So talk to me about, you know, what some of those coverages that are likely to be missed. What are they? Sure. So less common outside of the ones that we discussed. You have your cyber liability. You have your crime insurance. You have employee practices liability insurance, which is a very hot topic that we talk a lot about with clients. And then you have your umbrella policy as well. Umbrella policy is very easy to explain. The other ones are much more nuanced coverages that need to be covered. They need to be discussed. Okay. Let's go really high level on the three that you mentioned. And let's start with the buzzy one, employment practices liability. What is that coverage? Sure. So, employment practices liability really ramped up after the Me-Too movement.

[ 00:38:36 ] And what it is it protects an agency from their employees and third parties for home care agencies. It's your clients. And it states that there may be claims to an agency from a certain agency, but it's your clients. So, you also have criminal Denver staff. You can provide coverage to meet your clients against specific claims to sexual harassment, discrimination, due to age, sex, race, gender. You name it. When it comes to employees, it can be wrongful termination, discrimination, retaliation claims where you go ahead and you fire them for X, Y, Z reasons. They go ahead and get an attorney because an attorney will pick up any case these days and they go ahead and sue you. This coverage protects you from a legal cost defense standpoint and also settlement standpoint as well. Employees and third-party clients who sue you on behalf of your employee. Okay. Can you speak to a scenario or a use case here of what this would look like in practice?

[ 00:39:40 ] Yeah. It's a little more difficult because, obviously, it's tricky, this coverage when it comes to claims, because brokers typically are not allowed to be too involved with this type of claim; you have a lot of turnover in the home care industry and you have a lot of caregivers who may not be at the top of their game, and providing the services that your client requires, and you may need to terminate that employee. The employee may come back and say you wrongfully terminated me because of my age. I'm 65 years old. The client said that I can't handle them and hold them up; You fired me because of my age. You discriminated against me; it could be because of race. It can be because of gender. There is a spectrum of reasons.

[ 00:40:35 ] But remember we live in the great United States of America where anybody can sue for anything and everything. So, this is a coverage that unfortunately a lot of home care agencies aren't having conversations with their brokers about or they're willing to self-insure because the coverage can be more expensive. And what I always say is, a coverage is typically more expensive because you have a higher exposure to risk. Carriers need to charge you dollars for the risk that you have. And if that means that you're paying more in the premium, that means you have a higher risk. It's kind of like, as you grow as an agency, your insurance costs are going to go up because you're larger and you're going to have more risk. So, you're going to be paying more.

[ 00:41:18 ] This is really useful. And I'm putting you in a hot seat and we're getting into a little bit, a bit of uncomfortable territory because this coverage is so hairy, um, but really good response there, um. Correct me if I'm wrong, I'm thinking that this is a coverage that is probably more reactive, you know, say an agency encounters a claim in this territory, you know, then it's going to signal to them that they need this coverage. But this type of coverage should really be bumped up into the essential category because of home care and because of who we're dealing with and what happens in this industry is that a safe assumption. I love the way you think.

[ 00:42:00 ] Unfortunately, insurance comes with a cost, but I would, I would love to place this more so in the in the essential realm, um, but because it's a little more expensive, it tends to not be essential for home care agencies which is, which is understandable. We already talked about insurance being your second largest expense line there's that risk-reward that agencies have to weigh, um. What I always say is find out what the cost is and then determine. That if your risk is worth the reward, and having the coverage, that's what I always recommend. Just find out, yeah, that makes sense in all of the agencies this doesn't be exact numbers but in all the agencies that you've worked with or are working with, could you throw out a ballpark of what percentage of agencies have this coverage?

[ 00:42:48 ] I can tell you less than 10, okay, that's low; that's what I was curious like what percentage do less than 10, yeah, and the reason is because they don't want to make that investment and those who do have either heard of others who have had claims or are risk adverse and don't want to take the chance of. Of there being a claim so while for our clients we always put it on the table, so every renewal we have a renewal proposal. You go through all the coverages: what you have, what you don't have. Within what you don't have, we say employment practice liability: you don't have this, you don't have this, you don't have this, you don't have this, you don't have this. This is what it does; this is what it protects you from.

[ 00:43:25 ] This is what the cost would be for this limit; this is what the cost would be for this limit. And then you go ahead and make a business decision. But it's always on the table as an option, and you can decide you know what, maybe not this. Year but I'm going to accrue to start having it next year and you go ahead, and you put dollars aside to have that coverage, okay. This is really interesting; we're talking about things that probably aren't talked about much or enough, and so I like when we get into this this realm um, really quickly. I want to leave yeah about 15 minutes for these last few questions um, really briefly. Can you just overview cyber liability? What is it and when should an agency have that?

[ 00:44:03 ] So, cyber liability is an extremely nuanced coverage; where you like to call me the expert, and I appreciate that it takes a true, true expert to explain cyber liability. And exposures, and that's why in our office we have our own cyber liability expert. Where all they do is just analyze insurance contracts for cyber, it's constantly changing so they're staying up to date with regulations and carriers in the space and changes in coverages because insurance contracts are this thick and if one thing changes you have to know about it because it could affect your client's business. So, cyber liability has picked up a lot over the past decade, where it used to be not a lot of premium the purchase coverage 10 years ago. Now, it's more expensive, not as expensive employment practice liability.

[ 00:44:55 ] But it's more expensive, and it depends on your industry; it depends on your size. Always depends on, on your size, and your industry. How much you're going to pay, but in the healthcare industry, and I'm going to for a second put home care, and healthcare, and human services industry, and say it has become a very difficult coverage because you are collecting personal identical information not just for your employees which many businesses already do, but on your clients as well. You're collecting their information, as to, you know, their sex, their race, their contact information, social security numbers, maybe credit Card information and you're holding on to that even if it's in with a your own cloud storage system, you're responsible for managing that so a client saying they now we collect it but we pay a third party to manage that, you're responsible for your clients' information and collecting it and putting it there.

[ 00:45:53 ] You chose that vendor, you decided to do it. You're going to be brought into a lawsuit, you're going to be held liable. So cyber liability pays for things like forensic expenses, legal expenses, um injuries like settlements, um fines and penalties from the government because there's always going to be fines and penalties. For releasing personal identifiable viable information, public relations management there's a lot of coverage within cyber and it's very nuanced, okay let's leave that one there I think like you're explaining it's really nuanced but you did a good job of overviewing you know what that is and what that looks like and I would just say you know have a conversation with your broker if you haven't already about cyber and if that's something that you need to be implementing at this stage.

[ 00:46:41 ] Let's cover crime coverage, high level, what is what does that look like? Crime coverage think of um theft of property First, your employees stealing from you. And third-party, your employees stealing from your clients - in a nutshell, what for home care agencies the biggest exposure is to crime. There are other things like forgery and alteration, like forging checks, stealing money um, counterfeit currency, fraudulent, and electronic funds that are transferred out of the business into another account. You don't really necessarily have to worry about that as a home care agency because a lot of times the owner also handles the finances as well. But if you do have a C-suite built out there, have been claims that we've seen for multi -A million dollars, where a CFO or COO is funneling dollars over a number of years into a separate account that they created but truly it's their own personal account, that's crime coverage um, but really the biggest exposure is

[ 00:47:49 ] third-party employee theft where caregivers stealing from a client, okay which unfortunately is more common than it should be, so that's why this coverage exists. Absolutely, yeah it unfortunately is more common and we had a claim last year where um you know there were there was a claim made, a lawsuit brought, where a caregiver was stealing from a client over a period of time and they noticed things Missing and it came to a head, so it's a recommended coverage absolutely okay, a few more questions I have thrown so much your way and you're doing amazing, and I can't believe we're 50 minutes in here. Um, I want to talk about, well before we get

[ 00:48:34 ] into some of these questions my mind is going towards how much does all of this cost and I know that's very relative and specific to a lot of different things, but is could you throw out even a percentage like you know, last we were talking about how insurance workers comp is your second-largest expense now I'm thinking of like all of these coverages and how much an agency should or is spending. On this, could you attach it to like a percentage of revenue, or I don't know any frame of reference of like how much all this costs; it's such a good question, it is not standard because in that sense it depends on the state.

[ 00:49:17 ] that you're in, the territory that you're in, similar to kind of workers compensation there are states that have higher claims and higher claims payouts, we're going to be paying more, more money for your insurance; and there are states where there's not many claims and you know the jury system is not going to have a lot of high claim payout, so you're going to pay less; so when it comes to what you're going to pay, it. Depends on your location, it depends on your size, and depends of course, on your loss history as well. Okay, which that's useful to know you know people can think of like that as a frame of reference. I'm just like imagining in my head like a calculator, of like you put this information in, this is what you get, and then this is like about what you should be paying because I don't know...I don't know if owners are asking themselves this, but my thinking is like, 'Am I paying way too much?

[ 00:50:10 ] Am I not paying enough? Am I getting the coverage?' It's hard to know where they stand compared to other owners unless you have those conversations directly. so there was a question posted on the home care you um or maybe it was cares which is um Facebook page about how much are you paying for your insurance outside of workers compensation and somebody was saying 70 a month and somebody was saying you know a thousand dollars a month and there were these numbers and I came in and I and I wrote this thing where I was like essentially stop comparing you cannot compare you cannot you cannot compare because again it depends on your location your size your loss history and then on top of all that it depends on the carrier with you may be with a carrier because they're 70 a month Because they're not actually properly covering you, there's a reason why insurance is cheap like that.

[ 00:51:08 ] If that's the case, it could be because of your size, and you might be a startup. Sure, but on the other end, you might not be getting the coverages that you need. It might be a Swiss cheese policy, and at that point, what's the point in having and paying for insurance if it's not going to be there when you need it? Because one mistake and your business are closed. Yeah, I love I'm like so passionate and so eager to just get into this. I get that question all the time; I see it all the time, and it's the way that I - my mind works, like I there's A problem I need a solution, like I need, like you know, I just need to know where I stand.

[ 00:51:51 ] But your counter is fair, insurance is so nuanced and state-specific, and there's so many components to calculate that it's, you can't, you just can't compare it, which is fair, and that's where your broker, you know, back to like the broker concept, that's where they can be, you know, if you go with the broker concept, that's where the right high-quality broker, they should be the one to give you that frame of reference, tell you what you need, and then get you like, like a fair price on everything that you're, you're paying for, absolutely, like. Like I said, there are four big home care insurance carriers nationally, and I gave you one or you know the largest which is which is filled up an insurance company

[ 00:52:33 ] and a broker who has a lot of weight and has a lot of premium with those insurance carriers can also help negotiate lower premiums for the same coverages for their client, so going up the street to ABC Insurance Company on the corner might not be the same as going to you know another broker has a lot of premium with them, so um look every dollar matters for home care agencies especially these days and you cannot be insurance poor, you cannot be insurance poor but understanding the risks and the reward is extremely important when making a business decision 100 we've got a few more minutes here let's I know this probably warrants another 30 minutes

[ 00:53:14 ] but we don't have time but let's talk about you know high level a few things that owners can do today or this week or this month to cut down on their insurance costs what are some of the tips and tricks that you would recommend they start implementing now um we talked about last week on the workers compensation side be best in class explain to your broker and your insurance care why you are a premier home care agency what makes you different what makes It's so that when your caregiver is out there in the field, you're not going to have any professional liability claims or that you require upon signing a contract with a caregiver that they have auto insurance in place and you check to make sure they have proper auto insurance in place before hiring them, those things when presented to the marketplace make a difference, just like anything else, a story to the insurance carriers, makes a difference, so you're just not a big deal.

[ 00:54:10 ] Oh wait, another salad, another set of notes, another dissemination, another submission on the stack of a hundred submissions that they already have, explained. Why are you the best, and that'll certainly help. So, that's number one. Um, number two is packaging your policies with the same carrier whenever possible, that creates greater economies of scale, and thus, you can negotiate lower rates. It's kind of like going to the farmer's market you buy one apple for a dollar, but you can go ahead and maybe get, you know, two apples for $1.50. These things can be negotiated when you have greater economies of scale in the marketplace. Number three is with one of those four carriers. Those carriers know what they're doing. They're priced aggressively for the coverages they offer. They're designed for home care agencies.

[ 00:54:58 ] So being with one of those is extremely important as well. And we talk about cutting down costs, but I have to go back to it. But number one priority should always be protecting your business because your business is your baby. It's the biggest asset you have. So, protecting your business should be number one. Cost should be number two. But again, there is a risk reward, and you can't be insurance poor. So be careful what you sacrifice when it comes to insurance. Great tips. And I'll just emphasize, I love the impact that the owner can have with their broker. I love when you talk about like telling your story and negotiating your costs. Home care owners can do that. Well, you know, you're providing the care, you're employing these caregivers.

[ 00:55:47 ] Like there's so much, there's a huge personal element to this business. And knowing that that has an impact on your coverage and your costs, I think is so neat. And so, I like to just drive that home of, you know, sit down with your broker, have this conversation and be kind of get into the personal side of what you do and know that that can reap rewards and how you communicate that. Absolutely. Absolutely. Thanks for letting me get insulated, you know, nerd out over here for speaking this week. That's why we do this is so people like yourself that are passionate about topics that other people don't know about, you can just, you know, run wild with it. So, I love that. So, let's wrap up here.

[ 00:56:29 ] We have covered so much ground and I just want to say thank you for giving us your time, Gavin. It's been really useful. What is the best way for people to contact you directly or to get in contact with your firm? Great question. That is the one question I didn't prepare for your email or website. Oh, yeah, absolutely. LinkedIn, Gavin Studner. Go ahead and send me a message on there. Connect with me. We send out weekly publications on risk management tools specific to home care agencies. So, if you just want to see risk management tools, procedures, processes that maybe you want to implement. LinkedIn is the best way you can also send me an email at gstudner@odellstudner.com, that's probably the two best modes to get in contact with me. Perfect.

[ 00:57:19 ] Well, that that's perfect. That's exactly what we need to know. And just so that everyone's aware, this has been recorded. We will be sending this out in audio format as a podcast so you can re-listen to this and it's nice. You can pause and play and forward and rewind all of that good stuff when you're listening to the audio. And we'll also send out Gavin's contact information if that's okay. You also, I don't know if you want to just drop that in the chat here, Gavin, you could type in your email so people have it, but we will send out that information as well. Absolutely. You can always go to odellstudner.com and you will find it. And I just want to say before you log off, thank you for inviting me.

[ 00:57:56 ] I love Careswitch. Clients love you and your product. So, you know, I always ask the question. I highly recommend them coming to you. So, if anybody's on this call, discuss Careswitch. Good opportunities. That's kind of you. Thank you for saying that. And it's my pleasure. I love having these conversations with people like yourself. This is why I do what I do and why I love home care. There's just so much that I can help bring to light through these conversations with people like yourself. So, thank you, Gavin, and thanks everyone that's been here live with us. We will communicate with you via email. Know that this is a recurring event. So next week, we'll actually have Michelle Cone, a VP at HomeWell Corporate, to talk about franchising versus independence. We've got some hot topics with hot takes coming up the next couple of weeks. So be sure to tune in next week, same day, same time. And we'll end there. Thanks, everyone, for joining us. And thanks, Gavin, for being here. Thank you, everybody. Take care. Take care. We'll see you.