The top priority for healthcare staffing agencies is to provide quality services to clients. Matching skilled medical professionals allows these agencies to deliver effective care and assistance to the needs of patient facilities. However, before healthcare staffing agencies can begin assisting facilities with helping the ailing, they must have the right legal and financial protections. Just as some illnesses are unexpected, something could go awry when a worker is placed on a job.
Generally, healthcare staffing agencies employ doctors, nurses, nursing assistants, medical technicians, and others as contractors on offsite patient facilities. This presents unique liability conditions that require appropriate insurance coverage. Unlike a medical facility that hires workers directly, agencies face the combined challenge of employing medical professionals and dealing with co-employment laws. Typically, healthcare staffing agencies have insurance needs that include:
• General liability
• Medical Professional liability
• Workers compensation to cover employees at risk for back injuries, exposure to pathogens and latex allergies
• Protecting physical property such as equipment, grounds, facilities and the personal property of workers
• Health and life insurance benefits for workers
Staffing General Liability
Whether a healthcare agency staff workers at a doctor’s office, hospital or for at-home patient care, general liability insurance is a must. This type of insurance plan protects the agency from onsite property damage or physical injuries sustained at the medical facility and agency office. An agency and its assets are also protected if a client files claim against workers or the agency. With general liability, the agency is covered to defend against such claims whether they are fraudulent or not.
As the most basic type of business insurance, general liability provides limited protection against certain types of claims. The policy can be combined with property insurance to make sure maximum coverage is available for any claims against the office or medical facility. While general liability insurance protects a healthcare staffing agency from various risks including theft or property destruction, it does not include professional liability claims against the agency.
Medical Professional Liability
Medical professionals working for a healthcare staffing agency could face claims of negligence or malpractice. Claims against professional competence are not uncommon and do not exclude healthcare staffing agencies. In a litigious society, the agency must protect itself with a medical professional liability insurance policy.
Basically, medical professional liability insurance offers protection for a staffing agency that faces liability claims from a worker’s failure to use due care. Somewhere during treatment, the standard of care that a patient expected was not fulfilled. Any bodily injury that resulted in an act of negligence, along with mental anguish, can be covered under this policy. In most cases, a higher percentage of the premium costs go towards defending a negligence or malpractice claim.
A workplace injury can occur at any time that an agency places a medical worker on a job. Working around chemicals and medical devices increases the potential for serious accidents. Workers' compensation insurance can protect workers with guaranteed financial benefits for qualified injuries sustained on-the-job. All states require employers, which include healthcare staffing agencies, to carry workers' compensation insurance.
Also known as workman’s comp, this type of insurance is a compromise between workers and staffing agencies. For workers, they relinquish the right to sue the agency if they suffer an illness or injury while at a client’s worksite. In return, the staffing agency agrees to provide state-mandated benefits as a result of the illness or injury. These benefits may include medical care and a percentage of the workers’ pay.
Workers' compensation laws vary by state, but generally provide two types of coverage:
• Workers Compensation – benefits based on state law requirements, regardless to who was at-fault for the illness or injury that occurred at the client’s worksite.
• Employers’ Liability – additional coverage to protect the staffing agency from being sued by a worker who is injured or suffers from a work-related illness. To collect benefits under this type of policy, the worker must prove that the staffing agency was legally responsible for the illness or injury.
Healthcare staffing agencies place medical workers at several different workplace locations such as doctor’s offices, nursing homes, hospitals and patients’ homes. Part of the hiring process typically includes background checks of workers’ personal and criminal past. Even when thorough background checks are completed, an agency cannot account for the future behavior of workers.
If at any time a worker is accused of stealing from one of these workplaces, the staffing agency can be held equally responsible for the worker’s actions. Fidelity bonds, which can be individual, scheduled or blanket, will protect the agency against the costs of theft and subsequent legal actions. Issued as a guarantee for clients against losses that result from worker dishonesty, fidelity bonds are an essential part of the staffing agency’s insurance program.
Typically, fidelity bonds cover areas that are not part of the general liability insurance policy. Potential dishonest acts by workers are a principle area that agencies must have for principal insurance protection. Otherwise, staffing agencies leave their business assets exposed to possible lawsuits and/or legal action.
Fidelity bonds come in several forms. Individual bonds cover an individual worker and are not standardized. Generally, individual bonds can be used for unusual activities or situations. These are easy to script based on the circumstances.
Scheduled bonds are the second type of fidelity bonds. Basically, scheduled bonds are for named individuals or positions. For example, a healthcare agency may have scheduled bonds for nursing assistants and nurses.
Blanket bonds will cover all workers employed by the healthcare staffing agency. This is the most complete type of coverage between all three bonds. With blanket bonds, the agency has greater latitude in demonstrating which type of loss is covered. The agency does not need to show that a specifically covered worker was the cause of a loss. Coverage under blanket bonds will be provided if the agency can show that a worker caused the loss.
Another type that some staffing agencies may want to consider is discovery bonds. For a first-time buyer of fidelity bonds, discovery bonds will protect them against an undiscovered loss that happened before the bond was issued to the agency. Discovery bonds may work best for an agency that did not buy fidelity bonds when the business first opened.
Surety bonds can cover a range of situations and actions that a healthcare staffing agency might face. Typically issued by surety companies, surety bonds may fall into one of many classifications: court, contract, license, and permit, federal and miscellaneous. This brings three central parties into the surety bond contract: principal, obligee, and surety.
The principal is the worker who is blamed for the loss. An obligee is an entity that can collect under the bond when the principal causes a loss. The surety is the entity that pays for the loss. These bonds are simply another way for healthcare agencies to add an additional layer of protection against the unknown and unexpected.
Health, Disability, and Life
Not only should healthcare staffing agencies consider insurance policies that protect the business, but they should also offer benefits to workers. Health, disability, and life insurance offer worker protection while they are exposed in an environment that could lead to unexpected illnesses. These policies may also give staffing agencies a competitive advantage.
Clearly, there are many different types of insurance plans and bond coverage that covers healthcare staffing agencies while they provide needed services to their clients. Call us at The Huttenlocher Group and let us make sure your agency is properly covered.
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