AA&B: How did your firm enter the allied health business? Clark: Lloyd's of London came to us in December with a program that used to be with a different program administrator; they wanted us to take over the management of the business. The program was already well established, with 25 to 30 different types of businesses–home health, adult daycare, non-emergency ambulance and durable medical equipment providers. We officially launched the program in February and expect it to grow to the original volume size of $17 million within 3 to 5 years. AA&B: What coverages are specific to these customers? Clark: General and professional liability, hired and nonowned auto, sexual abuse, property and D&O. Buyers also should look into HIPAA compliance protection and cyber liability, either built into standard coverage forms or as stand-alone policies.
AA&B: What do agents who want to specialize in this business need to know?
Clark: They should get to know the types of entities they can write. I have seen producers who specialize in this; not only do they know the coverage and how to place it, but they can assist with risk management and claims. They also can get on the board of directors, join associations and go to trade shows. Many make allied health a specialty. We accept business from any of our producers but in general, niche players are most successful. It takes about a year or so to build an allied health book of business. After that, a lot of business will come from referrals. An agent must knock on doors and figure out what's expected from the insured's standpoint, as well as how to meet other clients. Agents also should consider partnering with MGAs or program administrators that they have a good relationship with so they get the proper services. AA&B: What should agents know about coverage availability and policy language? Clark: Several major carriers write this business, but from a general and professional liability standpoint, coverage is written traditionally on a claims made basis on nonadmitted paper. You can find some admitted papers in occurrence form for businesses like adult daycare and home health care. Aside from the coverages mentioned above, agents also should ask carriers for coverages such as defense outside limit and punitive damages. Ask for the bells and whistles, such as HIPAA compliance protection.Risk management also is a service that's highly welcomed by clients. Ask your carriers if they can help with this. AA&B: Are allied health businesses more prone to lawsuits? Clark: Some business segments seem to be targeted, so professional liability coverage is important. Because it is a professional field, people hold them up to certain standards. However, our program is long term and even figuring in for possible litigation, the loss ratio is typically under 20 percent. AA&B: What's the best way to look for new business? Clark: Partner with the professional associations representing each business segment, such as the National Assn. for Home Care and Hospice (NAHC), and the National Private Duty Assn. (NPDA). We are not currently doing this because our program is new, but we plan to do so over the next 24 months. AA&B: What are the primary benefits for agents specializing in this niche? Clark: It's a business that will continue to grow along with the demographics of an aging population. And like other health care businesses, it's somewhat recession-proof; people looking for jobs are going back to school and looking for employment in the health care fields. AA&B: Have legislative changes related to Medicare or programs changed the outlook for allied health coverages? Clark: It's important to monitor changes or additions to reimbursement structures or regulatory requirements that may trigger changes in certain types of services being provided by our insureds. THOMCO will also monitor the changes to see if it necessitates coverage enhancements.

Special Reports /

Allied Health Care: Sound Specialization in a Changing Market

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