The Comprehensive Home Care Insurance Glossary

Additional Insured A person or entity added to your insurance policy who receives protection under your coverage. Common examples include clients, facilities, or property owners who require you to name them as additional insured on your general liability policy. Being additional insured means they’re protected if sued for incidents involving your operations.

Admitted Carrier An insurance company licensed and approved by a state’s insurance department to operate in that state. Admitted carriers must comply with state regulations, participate in state guarantee funds, and follow approved rate structures. Most home care insurance is placed with admitted carriers.

Aggregate Limit The maximum amount your insurance policy will pay for all claims combined during the policy period (typically one year). For example, a $3 million aggregate means the carrier will pay no more than $3 million total for all claims that year, even if you have multiple separate claims. Different from per-occurrence limits which apply to individual claims.

Application The formal request for insurance coverage where you provide information about your business including revenue, services, employees, prior claims, and other details. Insurance companies use applications to evaluate risk and determine whether to offer coverage and at what price. Accuracy is critical as misrepresentations can void coverage.

Auto Liability Insurance See Commercial Auto Insurance and Hired & Non-Owned Auto Insurance.

Claim A formal request to your insurance company for payment or coverage following a loss, incident, or lawsuit. Claims can be actual lawsuits filed against you, demands for payment from injured parties, or reports of incidents that might result in claims later. Must be reported to your carrier according to your policy terms.

Claims-Made Policy Insurance coverage that covers claims filed during the policy period for incidents that occurred after the policy’s retroactive date. You’re only covered if both the incident and the claim filing happen while coverage is active. Most professional liability is claims-made. Requires continuous coverage or expensive tail coverage. Compare to Occurrence Policy.

Claims History Your record of insurance claims over time including dates, amounts paid, and claim descriptions. Insurers review claims history when underwriting new policies. Prior claims typically increase premiums 25-100%+. Multiple large claims can make you uninsurable with standard carriers.

COBRA (Consolidated Omnibus Budget Reconciliation Act) Federal law requiring employers with 20+ employees to offer continued health insurance to employees who lose coverage due to termination or other qualifying events. Separate from insurance for your business operations but important employee benefit requirement.

Commercial Auto Insurance Insurance covering vehicles owned by your business and used for business purposes. Includes liability coverage (injuries/damage you cause to others) and physical damage coverage (damage to your vehicles). Required for any vehicles titled to your business. More expensive than personal auto but necessary for business vehicles. See also Hired & Non-Owned Auto Insurance.

Commercial General Liability (CGL) See General Liability Insurance.

Coverage The protection provided by your insurance policy for specific types of losses or claims. For example, general liability provides coverage for bodily injury and property damage. Coverage terms specify what is and isn’t covered, limits, deductibles, and conditions.

Coverage Limits See Limits of Liability.

Cyber Liability Insurance Coverage for data breaches, cyberattacks, HIPAA violations, ransomware, and other technology-related exposures. Covers breach response costs, notification expenses, legal fees, regulatory fines, credit monitoring, and business interruption from cyber incidents. Essential for home care agencies storing patient data electronically.

Effective Date The date your insurance coverage begins. Coverage is only active from the effective date forward (for occurrence policies) or for claims reported after this date (for claims-made policies). Never operate without coverage – ensure no gaps between policy periods.

Elimination Period In disability insurance, the waiting period between when you become disabled and when benefits begin. Similar to a deductible but measured in time (e.g., 90-day elimination period means benefits start after 90 days of disability).

Employer’s Liability Part of workers compensation policies that covers lawsuits by employees or their families for work-related injuries. Different from workers compensation benefits which are paid without lawsuit. Provides additional legal protection beyond basic workers comp coverage.

Employment Practices Liability Insurance (EPLI) Coverage for lawsuits by employees alleging wrongful termination, discrimination, harassment, retaliation, wage and hour violations, and other employment-related claims. Not typically included in standard packages. Consider if you have 10+ employees or operate in lawsuit-prone jurisdictions.

Endorsement An amendment or addition to your insurance policy that modifies coverage. Can add coverages, increase limits, add additional insureds, exclude specific things, or change terms. Review all endorsements carefully as they alter your policy terms.

Errors & Omissions Insurance (E&O) Another name for Professional Liability Insurance. Covers mistakes, errors, and negligence in your professional services. Common term in some industries but less common in healthcare where “professional liability” or “malpractice” are more typical terms.

Exclusion Specific situations, circumstances, or types of loss that your policy does NOT cover. For example, general liability excludes intentional acts, professional services, and abuse allegations. Read exclusions carefully to understand coverage gaps. Some exclusions can be removed by endorsement.

Expiration Date The date your insurance coverage ends. Coverage terminates at 12:01 AM on the expiration date. Renew before expiration to avoid coverage gaps. Even brief lapses can cause serious problems with claims-made policies and licensing requirements.

Experience Modification Rate (Mod) A factor applied to workers compensation premiums based on your claims history compared to industry averages. Mod of 1.0 is average; below 1.0 (like 0.85) reduces premium; above 1.0 (like 1.25) increases premium. Lower mods reward good safety records. Also called Experience Mod or E-Mod.

General Liability Insurance (GL) Insurance covering bodily injury and property damage claims against your business from your operations. Covers client falls, property damage in homes, visitor injuries, and accidents. Foundation coverage for all home care agencies. Typical limits are $1M per occurrence / $2M aggregate. Required by virtually all contracts and most state licensing.

Grace Period Brief period after your premium due date during which coverage remains in force even if payment hasn’t been received. Typically 10-30 days depending on policy and state law. Don’t rely on grace periods – pay on time to ensure coverage.

Incurred But Not Reported (IBNR) Claims that have occurred but haven’t yet been reported to the insurance company. Important concept in claims-made policies and when estimating future claim costs. Impacts premium calculations and reserves.

Indemnification Agreement A contract clause where one party agrees to compensate another for losses or damages. Common in contracts where facilities require you to indemnify them (hold them harmless) from liability arising from your operations. Your insurance protects you when you’re required to indemnify others.

Insured The person or entity protected by an insurance policy. Also called the Named Insured. Your policy shows who is insured (typically your business name and owners). Additional insureds are added by endorsement.

Insurer The insurance company providing coverage. Also called the carrier or insurance carrier. The entity that collects premiums and pays claims.

Lapse Termination of insurance coverage, typically due to non-payment of premium. Even brief lapses cause serious problems including license suspension, contract violations, and claims-made coverage gaps requiring expensive tail coverage. Never let coverage lapse.

Liability Legal responsibility for damage, injury, or loss to others. Liability insurance protects you when you’re legally liable (responsible) for harm to others. Different types of liability require different coverages.

Liability Limits See Limits of Liability.

Limits of Liability The maximum amount your insurance will pay for a claim or during a policy period. Expressed as per-occurrence / aggregate (e.g., $1M/$3M means $1 million maximum per claim, $3 million maximum total for all claims during policy period). Higher limits cost more but provide better protection.

Loss An event giving rise to an insurance claim including accidents, injuries, damage, or lawsuits. Insurers use “loss” to describe claims and incidents covered by policies.

Loss Control See Risk Management.

Loss Ratio Claims paid divided by premiums collected, expressed as a percentage. For example, if an insurer collects $100,000 in premium and pays $70,000 in claims, loss ratio is 70%. High loss ratios (over 60-70%) typically result in premium increases. Demonstrates why preventing claims keeps premiums lower.

Named Insured The person or entity specifically identified in the policy declarations as insured. Typically your business name. Others can be covered as additional insureds but the named insured is the primary policyholder.

Negligence Failure to exercise reasonable care, resulting in harm to others. The basis of most liability claims against home care agencies. Professional liability covers professional negligence; general liability covers general negligence in operations.

Non-Owned Auto Coverage Part of hired and non-owned auto insurance covering liability when employees use their personal vehicles for business purposes. Their personal auto insurance excludes business use, leaving you exposed without this coverage. Essential for agencies whose caregivers drive to clients.

Non-Renewal Insurance company’s decision not to renew your policy at expiration. Different from cancellation (termination during policy period). Carriers can non-renew for various reasons including poor claims history, changes in underwriting appetite, or business risks. Gives you time to find new coverage before current policy expires.

Per Claim / Per Occurrence Limit The maximum your insurance will pay for a single claim or occurrence, regardless of how many people are injured or the number of injuries. For example, $1 million per occurrence means the maximum paid for any one incident is $1 million, even if multiple people are injured.

Policy The contract between you and the insurance company specifying coverage terms, limits, exclusions, conditions, and premiums. Review your actual policy documents, not just the declarations page, to understand coverage fully.

Policy Period The time frame during which coverage is active, typically one year. Shown as effective date to expiration date. Coverage only applies to incidents or claims during this period (depending on occurrence vs claims-made coverage).

Premium The amount you pay for insurance coverage. Can be paid annually, semi-annually, quarterly, or monthly (with financing charges for installments). Premium is based on your risk factors, coverage limits, deductibles, and claims history.

Professional Liability Insurance Coverage for negligence, errors, omissions, and mistakes in your professional services. For home care agencies, covers medication errors, inadequate care, failure to prevent foreseeable harm, hiring unqualified staff, and professional negligence. Also called Errors & Omissions (E&O) or malpractice insurance. Essential coverage, required by Medicare and most contracts. Typically claims-made coverage.

Proof of Insurance See Certificate of Insurance.

Property Damage Physical damage to tangible property belonging to others. General liability covers property damage you cause, such as breaking items in clients’ homes or damaging doorways during equipment delivery. Different from bodily injury which involves harm to people.

Renewal The continuation of your insurance coverage for another policy period. Occurs at policy expiration if you and the carrier agree to continue coverage. Renewal may involve premium changes and updated terms. Review renewal documents carefully.

Reservation of Rights Notice from your insurance company stating they will defend you but reserve the right to deny coverage later if investigation reveals policy exclusions apply. Protects the carrier’s right to decline payment while providing initial defense.

Retroactive Date In claims-made policies, the earliest date of incidents that can be covered. Claims are covered if: (1) the incident occurred on or after the retroactive date, AND (2) the claim is reported during the policy period. Changing carriers can create coverage gaps if the new policy’s retroactive date is recent.

Risk Management Processes and practices to identify, assess, and reduce risks of loss. For home care agencies, includes fall prevention protocols, proper training, background checks, documentation standards, and safety policies. Good risk management reduces claims and can lower insurance premiums 15-25%.

Tail Coverage Extended reporting period endorsement for claims-made policies. Allows you to report claims after the policy expires for incidents that occurred while coverage was active. Essential when canceling or switching claims-made coverage. Expensive (typically 150-300% of annual premium) but necessary to avoid coverage gaps. Also called extended reporting period.

Third-Party Coverage Insurance paying for your liability to others (third parties). General liability and professional liability are third-party coverages. Contrast with First-Party Coverage which pays for your own losses.

Vicarious Liability Legal liability for actions of others, such as employees or independent contractors. Agencies are vicariously liable for employee actions within the scope of employment. Your insurance protects you from vicarious liability for employee actions.

Excess Liability See Umbrella Liability Insurance.

(No common home care insurance terms begin with Z)