Home Health Care Agency Bonds

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Home Health Care Agency Bonds

Surety Bond Professionals is a family owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your home health care agency bond needs.

What Are They?

Licensing and bonding requirements for businesses offering in-home care vary by state and depend on the specific home care services offered. Some home health care agencies serve patients covered by Medicare and Medicaid, which means they must comply with the rules and regulations of the federal Centers for Medicare and Medicaid Services. Others are subject only to regulation by their state Department of Health. Different licensing bodies have different requirements for licensure, including substantial insurance requirements.

The most common home health care agency bonds are not mandated by any government entity. They are purchased voluntarily by agency owners to protect their clients against financial harm stemming from the actions of an employee providing in-home services. These home health care agency bonds (also known as home health care bonds or home care bonds) are a subset of a category of surety bonds known as business services bonds.

Who Needs Them?

Any business owner sending employees into a client’s home or workplace to provide services could be held liable for damages caused by the unlawful or unethical acts of an employee. Clients served by home health care agencies may be incapacitated by age or disease or be vulnerable in some other way. Consequently, they may be victimized easily by an unscrupulous in-home caregiver.

For example, a home health aide could steal a client’s personal possessions or gain access to a client’s checkbook or credit cards and use them fraudulently. Without the protection of a home health care agency bond, such victims or their family members could sue an agency owner to recover damages. That can damage the agency’s reputation and make prospective clients wary of using the agency’s services. Being able to advertise an agency as bonded builds public confidence and gives an agency an edge over its unbonded competitors.

Speak with a Surety Bond Professionals agent today to discuss your bonding needs.

How Do They Work?

Most surety bonds create a three-way contract among a government entity requiring the bond as a condition of licensure, the business owner or professional seeking a license, and a third party (the surety) that guarantees the payment of claims. But because a business services bond of any kind is a voluntary purchase, it involves only two parties—the business owner (referred to as the bond’s “principal”) and the surety. 

When an incident that harms a client financially occurs, the injured party can file a claim against the principal’s home health care agency bond. If the surety finds that the claim is legitimate, it will be approved for payment. The surety, as the bond’s guarantor, will pay a valid claim initially, but the legal obligation to pay claims belongs to the business owner, who must subsequently reimburse the surety in a reasonable timeframe.

What Do They Cost?

Home health care agency bonds are purchased for an annual premium that is generally in the range of one to three percent if the underwriters perceive the principal as creditworthy and likely to reimburse the surety for claims paid on the principal’s behalf. Bond applicants with low personal credit scores will pay a premium rate on the higher end of this range due to the greater risk to the surety.