Did you know that a client can file a medical malpractice suit against you or an aide from your home healthcare agency?
Did you know that two out of five such claims are found baseless in court?
These are the facts uncovered by a report titled Tort Liability Costs for Small Businesses. If you are a home health aide or you run a home healthcare aide agency, you need to be aware that a lawsuit against you not only has a detrimental effect on your reputation and credibility but can also have a huge financial impact.
After all, even if you are not at fault, you still have to prove this in court and the process, which may take an average of five years to completion, requires you to spend money on defense encompassing both the attorney fees and the administrative costs.
No home health care agency or aide will allow a baseless claim to go unchallenged because a lawsuit raises a question on their competence and drastically impairs their ability to get work in the future. In effect, you do NOT have a choice to let a lawsuit against you take its course if you are not guilty.
What should you do when faced with a lawsuit?
The first thing is to consult with your lawyer and find out what you should do next. Here, if you are covered by insurance, your insurance provider plays a vital role in researching if the claimant has made fraudulent claims before.
If he/she has, then your case is strengthened. With advice from your lawyer, you have to respond to the claim, either accepting your fault, if you are indeed guilty or denying it and backing up your denial of negligence with a clear explanation.
A crucial point to remember here is this- you have to opt for legal recourse; otherwise, you stand the risk of the judge declaring a default judgment, ruling in favor of the plaintiff. This means you have to pay damages, possibly a staggering amount. With your lawyer’s help, you can file a countersuit against the claimant too.
Keep in mind that if you cannot have the case dismissed on legal grounds, it may directly proceed to judgment where the dollar amount of damages is decided. An out of court settlement is another option, and this may be the least expensive one you have.
However, a significant financial blow to your business is inevitable apart from the damage to your reputation in such situations.
How can home health liability insurance helps?
Home health aide liability insurance absorbs a significant percentage of any costs that you may run up in such a situation, thus protecting you/your business from financial ruin.
Remember, the average payouts in medical malpractice suits are six-figure sums, and this is excluding lawyer costs, which can soar over $100,000 for claims that are fought in court. With insurance covering your costs, you are in a position to focus better on sustaining your business through the claim process, work on building your reputation and retaining your existing clients.
Although medical malpractice insurance does not cover every single cost involved in defending and settling lawsuits, it does take care of those arising from arbitration costs, court costs, attorney fees, medical damages, settlement costs, compensatory and punitive damages.
Malpractice insurance reduce your business risk
Let’s face it- malpractice lawsuits can be terribly unfair to you and your business. In fact, the entire litigation system was described as being ‘largely random and unpredictable’ in 2003 by the Government Accountability Office (GAO) . With liability insurance for your business, you have in place an effective safety net in the event of the judgment turning out to be unfavorable despite your innocence.
Plus, the anxiety of having to source funds to fight the lawsuit is avoided since your insurer is going to be covering them. You can focus on your skill area- which is your business, ensuring that the impact on operations is minimal during the claims process.
A small business can quickly fold under financial pressure, and if you are facing a malpractice suit, the costs can quickly soar to unexpectedly high levels. Without insurance to absorb these costs, the impact on your balance sheet can be disastrous.
Keep in mind that a client can file a lawsuit against you that has no basis in facts whatsoever. You still have to investigate and defend yourself in such a situation because your reputation is at stake here.
Healthcare liability insurers typically have an Allocated Loss Adjustment Expenses (ALAE) fund to process every claim, research them thoroughly, and expose baseless ones. While the investigation may protect you from having to pay damages, there are still huge costs involved in the process, but with insurance, you do not need to worry about them because these are covered by the insurer.
Given the innumerable benefits that liability insurance offers, it is evident that this should be one business expense that you should not compromise on. After all, you cannot afford to allow legal claims to bring your business grinding to a halt nor can you afford to invest all your time, energy, and funds in fighting claims, ignoring your business operations.
Opting for home healthcare aide liability insurance is a smart business move that can pay off in many different ways if you do have a lawsuit filed against you at some point.