Home Care Dishonesty Bonds and Client Property Theft Coverage Are Not Created Equal

Author, Chase Hixson, Account Executive, Rancho Mesa Insurance Services, Inc.

Image of thief with money running away from person.

A common misconception in the home care industry is assuming a Home Care Dishonesty Bond is the same as having coverage for theft of client property. Many business owners don’t realize that Home Care Dishonesty Bonds, following the payment of a claim, will seek reimbursement from the business owner. That means the business owner is ultimately going to pay the claim if they don’t have an insurance policy to cover this type of act.

A bond is different from traditional insurance in that a bond is in place to protect the consumer (i.e. the client) in the event that a business becomes insolvent or refuses to pay a claim. In the case of home care dishonesty bonds, the bonding company acts as a safeguard for the client. In the event of a proven loss, the bonding company steps in to pay the client, and then seeks reimbursement from the business.

There are insurance companies that provide Theft of Client Property Coverage (sometimes called Third Party Coverage) under the general liability insurance form. This acts on behalf of the business owner.  Should someone accuse their employee of stealing, this insurance would pay the claim and not seek any reimbursement from the business owner.

It is worth looking into your current general liability policy to see whether or not your company is truly covered for theft of client’s property rather than be surprised when you receive an invoice from the bonding company.

If you have any questions about this topic, please contact me at chixson@ranchomesa.com.