Miriam Allred (00:11)
Welcome to the Home Care Strategy Lab. Thank you all for tuning in week after week. I hope you are enjoying the show. Just a quick note from me, the host, drop a review wherever you're listening. I know a lot of you are on Spotify and Apple or YouTube. I'd really appreciate it if you'd let me and the world know what you think about the show and what you're getting out of it for your business. Also share it with a team member. A lot of these episodes are focused on specific departments or operations within your org.

And so share it with a team. And if you have a topic or a guest in mind, feel free to reach out to me, send me a DM on LinkedIn or reach out to me via email. I would love to hear from you Today in the lab. I'm joined by Gavin Studner, a client advisor at Acresure in the home care practice group. Gavin is an expert when it comes to all things home care insurance. And it's a topic that's maybe on none of your minds, but

should be on everybody's mind. So Gavin, I'm constantly interviewing people about recruitment and retention and sales and billing and operations, but I love to bring you on the show to tell the home care world why insurance is just as important as all of those other topics. So let's do just that today. ⁓ Let's first let everybody get to know you a little bit. Tell us about yourself, about your passion for insurance and your experience working in the home care field.

Gavin Studner (01:36)
All

right. Thanks for having me. Passion about insurance. I don't think a lot of people can say that in the industry. But yes, I am passionate about insurance. I am proud to be a fourth generation insurance broker. So it runs in the family, learning at the young age of 13 And here I am today. I have gray hair and still in the industry. So it's been great. I'm really enjoying focusing on home care and the human services organizations because I know that.

Every dollar we can save in the insurance ⁓ expense for home care agencies goes to being able to help people. So I love my job because I indirectly help people.

Miriam Allred (02:15)
Yes, I love that. And some people may know you from Odell Studner. Tell us a little bit about the last couple of years and the transition from Odell Studner to Acrisure Just explain that for us.

Gavin Studner (02:26)
So Odell's Sunder side emerged with an organization called Acrisure We wanted to take our leap not only from one of the largest regional insurance brokers to the national landscape. So our office has turned into the headquarters of the mid Atlantic division for Acrisure. Acrisure is the fifth largest broker in the nation and the largest privately held PNC broker in the country. We're about five billion in revenue. And with that economies of scale, we can give our clients. ⁓

greater insurance costs and coverages to be able to help them grow their business.

Miriam Allred (03:00)
Amazing. so inside of Acrisure there's the home care practice group, which is you and a team that works specifically with home care companies and you have deep experience in that area. Tell us about the gamut of home care companies that you work with startups to massive enterprise companies and everything in between any, any specifics on just like demographics of who you guys are best suited to work for.

Gavin Studner (03:22)
Yeah, I mean within our home care practice group, we also have divisions that break out as well. So we have divisions that focus on startups because they typically require a little more handholding, a little more understanding, a little more education. And then we have within our home care practice group teams that focus more so on the larger enterprise organizations.

the 5 million, the 10 million, all the way up to $100 million in revenue. Some, a nexus up to $250 million in revenues, depending on the size and the scope. they're at that point, they have their own risk management team that we coordinate with. So really, it depends on the size, but there's a team within our organization to be able to help.

Miriam Allred (03:56)
Okay, awesome. And like I said at the top, most people aren't thinking about our insurance and myself included, but this is why I have you on is like, it's something that should be top of mind. I think you maybe already referenced it or you referenced it every time we talk is second to payroll insurance is the next biggest line item on your P and L. And that alone warrants this conversation of what is happening in the insurance world and why do need to think about it and why do we need to talk about it? So, ⁓

Gavin Studner (04:20)
Thanks.

Miriam Allred (04:25)
Let's just start there. How often do you think home care companies should be thinking about insurance? Are they just thinking about it at renewal? Like how often are they thinking about it and how often should they be thinking about it?

Gavin Studner (04:38)
Yeah,

everything you mentioned in the beginning about the different operations of a home care agency and where they focus is important. The billing, the scheduling, the payments on the back end. So everything is important, absolutely. Insurance is not talked about enough. And you said it perfectly. It's something that I've said for years to home care agencies. Insurance is your second largest expense line out of payroll.

It's something that affects not only your top line but your bottom line growth. What you take home is to your family but also how you're able to grow in the future. It's something that needs to be top of mind and I understand that for home care agencies that are startups there's so many things going on. You're really trying to and get just just stay on your feet, focus on the day, focus on the week and insurance typically isn't that. You place your insurance and it's time to focus on the next thing and I get that.

And that's why you have your insurance and risk management team to be able to help you cover those items that you're not going to be thinking about. When you are a larger home care organization, maybe 20 million, 40 million, 100 million in revenue, it's important to be able to have conversations with your insurance broker on a quarterly basis, I would say. I you should be thinking about it, let's say monthly, whether you're having safety committee meetings, whether you're having C-suite meetings about organizational risk management.

but it really depends on their size, but it's something that should be thought about way more often than it is.

Miriam Allred (06:01)
I'm curious in your experience working with a variety of sizes, who is usually your point person in the office at the company? For startups, likely the owner, the CEO. As these organizations scale and grow, typically who's managing the insurance at the business?

Gavin Studner (06:20)
So you're absolutely right. Startups, it's going to be the owner who's going to be handling. Then as you continue to grow, it can be the HR, it can be the administrator. Then as you scale up to the next level, it's a CFO. And then you scale up to the next level, then it's an in-house risk manager. So typically with each size organization, you have different people within the organization handling different roles when it comes to insurance.

But the scale I just mentioned is typically how things grow in terms of who's handling the insurance as your organization grows.

Miriam Allred (06:56)
Yeah, that's perfect. today, we're going to talk about three hot topics, the three hot topics around insurance that everybody needs to know about. We're basically just going to dive into those. But before we do, we're talking about different size agencies. And you're onboarding new agencies all the time. And so those initial conversations are just raw and natural. And they ask you questions. And there's misunderstandings. And it's just of like open fire in those calls.

Gavin Studner (07:17)
Okay.

Miriam Allred (07:24)
I want to hear from both lenses of like startup to kind of smaller businesses and then up to larger agencies. What are some of the most common misconceptions when it comes to home care insurance? What are things that they don't understand or you have to break down for them in some of those early, early meetings?

Gavin Studner (07:43)
One thing, insurance is not a commodity. We have to stop thinking about insurance as a commodity. And the reason I say that is because too often people come to me and our team saying, can you get me lower insurance rates? Can you cut my cost of insurance? And yes, cutting in short costs of insurance we understand because it's your second largest expense on how important that is. At the same time, anybody can give you a policy that's Swiss cheese. Anybody can cut

your insurance costs in half overnight if they want to. But the problem with that is that you have insurance for a reason and it's to protect you. You do not want Swiss cheese coverage. You want a nice block of cheese. It doesn't have any holes in it. So it's changing that perception of looking at insurance as a commodity, as just as an expense and looking at it as rather, what do I need to properly protect my business? Yes, protect my expense line, absolutely, but protect my business because

I equate it to your home. God forbid your home burns down. That's your largest asset. Do you have insurance to rebuild? Well, for your business, your other largest asset, if there's a claim that happens, do you have enough insurance to keep your doors open? That's the conversation we have.

Miriam Allred (08:59)
Yeah, the cheese analogy, that's awesome. People want to cut corners and save money, but at what expense? How much risk are you willing to take? ⁓ Is that the same for large organizations and large entities as well? Typically, those businesses are maybe more sophisticated, have more time in other industries. They may have more knowledge about insurance, but maybe not from the home care lens.

Any other thoughts or misunderstandings that larger orgs might have?

Gavin Studner (09:32)
So it's a different conversation with larger organizations. They do typically have a lot more experience when it comes to insurance and the importance of insurance and making sure that they're protected because they now have a full C-suite team that they have to work with and protect themselves as executive officers of the company. So when you talk about larger organizations and how they look at insurance, it's always about how do we protect the organization.

It's not a conversation of if and what corners we can cut. It's about how can we grow our insurance and resumption program as we continue to grow to make sure that we're matching the growth with protection. That's the conversation we're having. They don't look at insurance as a commodity.

Miriam Allred (10:19)
And one more kind of general question here, I'm putting you on the spot with some of these early questions. ⁓ What does the kind of generic insurance portfolio look like for a home care company? Like if you can just dial through, you know, the most common coverages and why they're essential for home care.

Gavin Studner (10:37)
Absolutely. mean, my mind just goes racing with that question because there are so many things to talk about that, quite frankly, lot of home care agencies aren't discussing with their insurance broker because they may be using a mom and pop shop up the street who don't understand home care insurance. So you have for a startup, you have property coverage, potentially if you own or you are renting an office space. You have your general liability and professional liability coverage, which is something you need to get licensed, which protects you against

third party claims out of or not out of related to your job and what your caregivers are doing in the homes. You have umbrella coverage, which is extra protection on top of your general liability, professional liability, giving you extra limits. You have your auto coverage. People don't talk about that. Well, if your caregiver is driving from client to client, they are driving on behalf of the business. That's an important coverage. Then we can talk about other coverages like employee and practice liability, which covers

know, sexual harassment, wrongful termination claims such as that, ⁓ cyber coverage, you're holding on to important client information and employee information, crime coverage. There's just so many things to talk about and just educate startups on and then when you start to get into the enterprise level, it's not so much education about it, it's more so about are your limits matching how your size and how big you are.

Miriam Allred (12:00)
Okay. That's kind of what I was going to ask is like, what are the indicators that you need to bring in some of those, what might be considered like additional coverages, like cyber, for example, you know, in someone's mind, that could be table stakes. Like we're in this digital world, we're dealing with HIPAA compliant information. In your mind though, is it more size related when it comes to these additional coverages or what are maybe some of the other indicators that you should start thinking about those other coverages?

Gavin Studner (12:28)
Yeah, I mean as a home care startup, you're gonna have a different conversation with your insurance broker than you are as an enterprise level. As a startup, you're really focusing on what do I need right now to get started and what do I need in this first year. And that is general liability, professional liability, workers' compensation, and auto. Those are the coverages that you need to get licensed, so you need to have those in place, period.

Then you talk about other coverages such as property. You may be leasing a property. You may have maybe some office equipment, but not really something that is something that's top of mind or needed right away. You don't have half a million dollars in office equipment you need to cover.

Miriam Allred (13:05)
Okay. I was going to say, I told you before this, I'm going to ask some of the dumb questions because this is not my area of expertise. One question that's coming to mind is around making changes to your coverage, making changes to your plans. I'm thinking from the lens of like health insurance. There's deadlines, there's times when you can make changes and you can't make changes.

How rigid is this insurance coverage that we're talking about? Like, can you make changes at any point in time or are there windows of when you can make changes or if you're gonna change carriers or brokers? Like, how much flexibility is there when you need to make changes?

Gavin Studner (13:38)
any

point in time. The difference between health insurance and what we do on the property and casualty side is health insurance is of course it's you're dealing directly with the employees as well and you have a renewal period and obviously you have to give employees an opportunity to like their coverages. For P &C insurance is about protecting the business of business owners. So you can change any of the above in terms of limits or coverages or carriers or brokers at any time throughout the year.

Miriam Allred (14:05)
Okay. Yeah, perfect. I again, just curious like how, how that works, because again, people may hear this conversation and think like, first place to start, go have a conversation with your broker after you hear this information. ⁓ but also you, you mentioned before, a lot of people are working with kind of small brokers that don't know home care. And that's again, why we have this conversation is what are, what are the home care specific nuances of insurance that we need to talk about so that they can go have that educated conversation with their brokers so that they can be more prepared for.

risk management with their business.

Gavin Studner (14:36)
Yeah, and I'll take it even one step further. I mean, if you have a broker who is just essentially giving you a renewal policy every year and seeing you at the next year, I mean, that's not good enough. Do you expect the same from your attorney? Do you expect the same from your accountant? It's not how business should be done. Your insurance broker is the same as your accountant and the same as your attorney. We are a team working together to grow in the same direction to help you grow.

So you should be having these conversations more often. You should be using your broker's resources and risk management tools and toolboxes and checklists and charts and anything that they can do to help because that's their job.

Miriam Allred (15:17)
Mm-hmm. I like that. I like that seeing it from that same lens of like priority, you know, we're constantly thinking about, you know, recruitment and retention and sales and revenue. But you know, where does insurance stack up in that? And really it's kind of just like a mindset shift and making sure it's up there in those top priorities, especially when it comes to expenses. Let's get into three things that owners need to be thinking about. You talk to a lot of companies, you read a lot and research. And so you're you're on

the forefront of what we need to be thinking about when it comes to insurance. We're basically going to break down three things that are kind of on the rise that owners and operators need to be thinking about. the first one is around workers' compensation. Again, that is a huge portion of a company's insurance expense and things are changing when it comes to workers' comp. So ⁓ start by just talking kind of high level about the importance of workers' comp insurance and then explain

Gavin Studner (15:59)
No.

Miriam Allred (16:16)
what you're seeing and what's changing when it comes to that.

Gavin Studner (16:19)
workers compensation is the largest expense within your insurance expense. And home care agencies probably know that because they look at their bill and they see work comp much higher than every other insurance line. So workers compensation is, we've been an interesting trend.

for the past 10, quite honestly, 14, 15 years. We have been in what's called a soft market cycle. So in insurance, you have hard market cycles and soft market cycles. Think of it like a wave, up and down. And this is every six years. So you have insurance carriers who cycle into the industry, and when they cycle into the industry to make money, costs go down. We live in a capitalist society. When you have more competition, costs are gonna go down because more insurance companies are competing for that.

business. When you get to a point where insurance companies are losing money because it was a race to the bottom, then you see the other wave. Rates start to go up. Insurance carriers start to pull out because they're losing money. Less competition breeds higher costs. That wave typically happens every six years. Dating back to the 1980s, we have been in the longest soft market cycle, so a wave going down in history.

where workers' compensation have continued to go down year over year. So home credit agencies that started 15 years ago, they've only seen their rates decrease. I mean, yeah, sure, it depends on the individual agency. They might have seen increased costs based off of their claims, their experience model, whatever it may be, but the rates that the carers file have decreased for the past 15 years. That's the longest soft market cycle in history. I've been saying to clients for the past couple of years that this is not sustainable.

Insurance carriers are in the business to make money. They have shareholders to respond to. There comes a point where the race to the bottom ends. And for the first time in 15 years, we are finally seeing that race to the bottom end with California just announcing last week that they are going to have a 9%, 8.7 % exact increase effective September 1st.

Now, it doesn't mean everybody's gonna have an 8.7%. It could be lower, it could be higher. It depends on your organization, specifically in how you've controlled your risk management. Those who have focused the past few years on implementing best practices from a risk management standpoint, which we'll talk about later on, are the ones who are going to be more successful than the ones who haven't, as we start to see this wave go up.

Miriam Allred (18:51)
Okay, a couple of questions. We've been on the decline for you're saying years. What has been kind of the average like year over year decrease each year? Like if you had to kind of ballpark the average, like what has the percentage decrease been year over year?

Gavin Studner (19:08)
I'd say the average rate decrease, and it depends on the state, because you have different states such as Pennsylvania and California who just have different insurance bureaus. But I'd say you're looking at 5 % as an average year over year where you've seen decreases just from a rate perspective.

Miriam Allred (19:27)
Okay. So then you say California, which oftentimes kind of sets the standard for the rest of the country, you know, it kind of comes in waves, you know, when someone starts at kind of snowballs, um, is going to increase by approximately 9 % kind of the average. Is that a large jump to start with? Is it, is that an average jump as we kind of go back onto the incline?

Gavin Studner (19:50)
So

the recommended increase was 11.2%. That was the original recommended increase for California. They settled at 8.7%. So whether that's typical, we don't know. I mean, every cycle is different. ⁓

I'd say that that's substantial. mean, if the home care agency looks at their insurance costs and the largest insurance expense is workers' compensation, that's increasing by almost 10%. How is that going to affect your business? I'm sure it's going to affect your bottom line significantly.

Miriam Allred (20:25)
which is exactly why we're putting this on their radar because if they are expecting a decrease year over year for the, since they've been in business or the last five, 10 years, and all of a sudden they're hit with a massive, 10 % is a lot in a home care business increase, they need to be prepared for that. So a couple of other things, you're mentioning this like kind of soft market, the cycle of hard market, soft cycle market. I'm assuming there's like,

political and economic factors that influence that? Is that what we chalk this up to? Is just the current political landscape affecting that or is it more of just like it's time for the trend to curve?

Gavin Studner (21:06)
I

think it's a combination. I I think that the trend that we've been seeing just isn't sustainable. I mean, you can never have in a capitalistic society a race to the bottom where insurance carriers, again, who have to answer shareholders, make money, are going to be continuing to lower costs when they're losing money. It's just not possible. And I think it's what we're seeing in California. And we're going to start to see across the country. And the other thing that we see is medical.

costs have increased significantly year over year for the past, ⁓ God, dating back to COVID. I mean, the cost of employees has increased significantly. You talk about ⁓ just not only from a payroll perspective, but also a care perspective, medical costs have gone up significantly. And that affects workers' compensation. If a caregiver gets injured, they have to go to the hospital or they have to go to an ER or they have to go to urgent care. The cost for that care

increases. Well, the insurance carrier, the workers compensation insurance carrier for the home care agency is paying for that medical cost for that caregiver gets injured. If they're out of work, the home, the insurance company is paying for their loss of work time as well. Well, if their payroll has gone up because they're getting more pay and the insurance carrier has to pay up more money even though they're not working. So it's, it's, it's a cycle.

and right now we're seeing costs go up across the board. So it is also driven by economics as well in the political climate.

Miriam Allred (22:36)
Okay. So say I'm a home care owner in Texas and I come to you right now and you tell me that my rates are going to be on the rise this next year or this next, you know, maybe over the next two years, what do you advise me to do? What should I do with this information?

Gavin Studner (22:52)
Proactiveness leads to lower claims, leads to lower insurance costs. So the reason we've been talking to our clients the past few years about how to prepare for what's coming, this wave that's coming, you can see it out in the distance, you don't know when it's gonna come, but it's gonna hit. Now we're seeing, it's pretty close. For some, it's already hitting in September.

You need to, if you haven't already started, talk with your broker, build a risk management plan. You need to have checklists prepared. You need to have employee handbooks looked at. You need to really decide to be best in class because those who are best in class are the ones insurance carriers are gonna wanna work with. Because when you only have limited insurance carriers who are willing to write a specific industry,

They wanna focus on the gold standard home care agencies. Again, their job is to make money for their shareholders. To make money for their shareholders, they need to write business for home care agencies who do not have claims. Claims means the carrier's losing money. So if you're a gold standard, you can show your gold standard from what you're doing. That's how you get a great insurance carrier partner, and that's how you lower your costs or keep costs stable in this horrific insurance market we're gonna be coming into.

Miriam Allred (24:06)
So how does an agency do that? How do you prove you are best in class to your broker and to your carrier? Like, what does that actually look like? How do you prove that to them?

Gavin Studner (24:18)
It's a process. what we do is we always with our clients is we build, we instead of just submitting a client to the insurance carriers like any broker can do, we do a write up for our clients every year as to why our specific client is better than the rest. Insurance carrier A, here's why our client deserves to be at the top of your pile while the others don't. Here's why you should partner with them. And a part of that is making sure that the

owner, HR, administrator, CFO, whoever's in charge of insurance is proactively having conversations with their team and making sure that these checklists, these procedures, these ⁓ safety videos, these safety committees are being implemented and how are they being implemented and who's monitoring them and how often are they monitoring them. So risk management is so important and showing what a home care agency is doing from risk management perspective.

which is our job to help them in terms of directing them on what to do and they can choose what to do and then communicating that to the insurance company. That's where it starts and that's where the rubber meets the road.

Miriam Allred (25:32)
Okay, I'm curious, is this like a formal like standardized process? Like the carriers have publicized like, here's what we're looking for. Like here are the companies we want to work with here are kind of like the standards or is it more abstract than that? You all are the experts. are all, you are the broker. You said you kind of provide these write-ups.

Is it more just like conceptual in nature and you guys have kind of figured that out and you know what the carriers are looking for or is, are the carriers more formal in that they are like asking for specific things.

Gavin Studner (26:09)
I said both. I think it depends on the broker. So when it comes to our home care practice group, I'm really proud of this, is we've built relationship with insurance carriers who will write home care agencies. They know that if it's coming from us, that this client or potential client is best in class because we've given them the tools that they need to succeed and be best in class. So it's also about relationships between the broker and the carrier. It's not just...

about being able to place business. So broker A, who is a mom and pop shop on the corner of the street, may be able to place business with company A the same way we can place business with company A. But at the same time, the factor of the relationship with the insurance carrier and them knowing who we are and what we provide our clients makes the difference when it comes to placing a client within a specific insurance carrier.

And insurance care is also, to your second question, going to request some specific things. They are now requesting specific protocols be in place. And if you do not have them in place, then they're not going to write you. One example is insurance carers in the home care industry are going to require that your caregivers have their own auto insurance. And it's not just as easy as checking a box saying, yes, they have their own auto insurance. It's, okay, next step. You're saying that you...

You require them to have their own auto insurance. Are you making them sign a document when they are hired stating that they're going to carry X amount of limits? Are you checking it every year to make sure that their insurance renewed and it didn't lapse or it didn't cancel? What are you doing on the back end to make sure that what you're saying is correct? Because within the policy itself, it's actually interesting and I'm an insurance nerd. I apologize. I'm a nerd, but you know what? It's so important.

Miriam Allred (28:00)
Get into it, get into it. I love it.

Gavin Studner (28:05)
Because on the back end, if you say you're doing these things and you're not, coverage might not be there if a caregiver gets to an accident while driving from home to home. Let's say that you say that you are checking their annual insurance, but you're really not. Well, that's a part of the contract, the application that you write and you check off that box. So if you are not doing what you're saying you're doing, the insurance company has an out.

to say you didn't follow the protocol that you said you were doing, we're denying this claim.

Miriam Allred (28:40)
Okay, let's keep going. This is good. The protocol, okay, that was a perfect example though of where home care owners can fall short. It's okay. When the employee was first hired, they told us they had auto insurance. We checked that box, we're good to go. But are they checking in on that year after year, making sure everything's renewing? What other examples are there? Where are some of these other pitfalls that home care owners are making that they may not even realize?

Gavin Studner (29:07)
So it's important to have other protocols in place from a safety perspective. So I'll give ⁓ an example that an insurance carrier just through conversation wants to know about a home care agency, what protocols do you have? And this is so specific, but what protocols do you have when a client is going to the bathroom? And the reason why the home care agency says that is because typically in the bathroom is where you have slips, trips, and falls. That is where a lot of these claims occur under your professional liability ⁓ policy.

because you have typically an elderly person who is going to a bathroom that can have wet floors. There's no handlebars. They require assistance. So insurance carriers are going to want to know what are your protocols? If a client wants to go to the bathroom by themselves, are you waiting by the door? ⁓ Are you in there with them? Are you ⁓ assisting them in terms of standing up and moving around? If you are giving them any type of

⁓ Bath or shower. Are you checking the temperature before they get in because? They get into a hot shower that burns them. That's that is a potential lawsuit. That's a potential claim So it's starting to a little more granular and when insurance carriers are asking more questions and getting more granular that's a concern because that means that the insurance trend is changing and They're getting more concerned about the business. They're writing

potential claims.

Miriam Allred (30:38)
Okay, so I know I'm drilling in here. ⁓ These are great examples. Are the carrier spelling that out? So I'm just curious logistically how this works. Does the carrier write all of this out, give it to you as the broker, and then you respond to all of that with your client, with the home care company?

Or again, is this something that you all have created? how rigid is that? And is it like publicly available? Like this insurance carrier has this protocol and this is what you have to send them basically.

Gavin Studner (31:11)
not publicly available, ⁓ you have a huge application that every home care agency who's listening to this knows because every year they have to fill out this application and it's nauseating and I get it and it's annoying but it's how you get insurance is filling out an application every year. So you have those standard insurance questions that yes, that is publicly available to see okay, what is this insurance carrier requiring? Outside of that, insurance carrier can ask anything that they want specific to a client. So not every client.

⁓ or potential client they're going to ask that question about the bathroom or about the auto. Quite frankly, more so about the auto these days. But the bathroom question might be because there are claims on the home care agency's loss history that warrant concern. So they're gonna wanna know more about the procedures and protocols from a safety perspective. Because every insurance carrier with the submission that you send in with your application gets

five years of loss run history. They get to see all the claims you've had over the past five years across every single policy. So they check those and they wanna know what are you doing to prevent it from happening again and why did that happen? So it really depends.

Miriam Allred (32:25)
OK, OK, this is good. that was a good answer because there's the initial application, but then there's all these home care nuances. And that's where I'm just curious how formal and rigid that process is or it's looser than that. But that's a good answer around it depends on the history of the business. If there are specific call outs that the carrier wants to dig into, that's where those questions come into play. This might be a hard question to answer, but.

on average, maybe for different sized home care businesses, how many claims are we talking a year? Like what, again, there's so many factors to that question, so it might be a bad question, but just like ballpark, how many claims are home care companies having a year, maybe depending on like different sizes?

Gavin Studner (33:11)
That is such a hard question. It's such a hard question and it's so hard to even put a number behind it because like you said, I mean, it depends on not only the size, whether you're dealing with startup or enterprise, because obviously an enterprise is going to have more claims because they have a larger employee size, which leads to more claims. Startups, you know, the chance of claims are smaller because maybe they only have one employee, two employees, so their risk is much lower, hence why their cost is lower.

So, it's really hard to put a number behind it. And then on top of that, not just size, you're talking about state. I mean, different states you see more claims. California, of course, is a very difficult state when it comes to insurance. New York, very difficult state when it comes to insurance. And then it comes down to counties. mean, Philadelphia, where I live, proud Philadelphia Eagles fans, by the way, go birds, I would say is one of the most difficult cities when it comes to insurance, up there with New York City.

Miriam Allred (34:01)
Mm-hmm.

Gavin Studner (34:12)
Los Angeles, San Francisco, even some cities in Texas. Philadelphia was named the number one judicial hellhole in the United States this year. We love beating New York in everything. I mean, don't like the Giants, don't like the Mets, can't stand them. But they came in number two on this, and we came in number one, and it's not something I wanted to take first place in.

Miriam Allred (34:33)
You got the badge on.

Gavin Studner (34:35)
Yes, the badge

on.

Miriam Allred (34:38)
So what, why again, sorry, I don't know if these are good or bad questions. Why is it more difficult in certain states? Like what are the factors that play into it being worse in certain, in certain areas, cities and states?

Gavin Studner (34:51)
It's the

court system. It really is. The problem with our court system is that it's, quite frankly, it's kind of run away in terms of these awards they're giving to plaintiffs. We have seen year over year a 50 % increase in the amount of nuclear verdicts in the court system and people are wondering, well, what are nuclear verdicts? Great question, let me tell you.

So nuclear verdicts are verdicts that are over a million dollars in the court system. They are that insurance carriers have had to pay out for. We've seen a 50 % increase year over year. And what's interesting is the top three states where we've seen nuclear verdicts are your home state of Texas, go Texans, California, and Pennsylvania. And Pennsylvania is driven by Philadelphia.

Miriam Allred (35:39)
You

Gavin Studner (35:49)
The reason for that is different states court systems typically lean more plaintiff friendly and others more defendant friendly. And without getting political, because you know me, I stay out of politics, I really do, but typically the more blue the county or the state, the more plaintiff friendly it's going to be. Whereas the more red the state, the more defendant friendly it's going to be. So that's why it depends on the state.

and the county where you are operating.

Miriam Allred (36:22)
Okay, I just think that is interesting that it has to do with like the judicial system and less so with like the labor market with the business market. Like I again, I was just curious if it's in our control or out of our control. And it sounds like it's more like out of our control based off the judicial system and less to do with like, again, maybe the labor labor market or the industry.

Gavin Studner (36:26)
Mm-hmm.

Yeah.

I mean, look, you have macro things that are out of your control. You cannot control the court system, unfortunately. And the problem is, to be quite frank, and I'm sorry to all the attorneys out there, attorneys have taken advantage of the court system. They just have. I mean, if you drive up 95 here in Philadelphia, you see billboards, my gosh, I want to say every 20 yards you see a billboard saying, get cash now. And the problem with that is that the more claims that go into

the court system, the more payouts that insurance carriers have to pay, the more insurance home care agencies and just corporations in general are going to have to pay in insurance. Because again, insurance carriers are not in the business to lose money. They're in the business to make money. And if they're paying out these large multi-million dollar claims from these lawsuits that attorneys get 35 % contingency on, well, your insurance rates are going to go up.

We need to find a way, this is a totally separate conversation, to stop these runaway verdicts and the attorney's making 35 % contingency on these claims because they make money off of how big these claims are. It's a huge problem and it's sad to see.

Miriam Allred (37:58)
Okay, but this is all just good context. Again, a lot of us aren't thinking about these topics, which is why I think this is fascinating, which is why I'm taking us down some of these rabbit holes. My mind is also like, wow, you know, it be a juicy conversation is like some brokers and some attorneys on stage to like share both perspectives. Because again, sometimes like the home care agencies like caught in the middle of that circle of like influence. And so I think that could be interesting in the future.

⁓ Let's keep moving, put us in the ring. Let's keep moving on to the second and third topic that we want to talk about. Workers' comp is always just like up there with the high priority and so I wanted to start there. ⁓ The next thing I want to talk about is this general and professional liability insurance, which is another bucket of insurance that owners need to be thinking about. And if I'm not mistaken, those rates are increasing as well. So just explain kind of high level like

Gavin Studner (38:27)
Put us in a ring.

Miriam Allred (38:56)
what is general and professional liability insurance and why the trend of the increase that we're seeing.

Gavin Studner (39:01)
So we talk about nuclear verdicts in the court system. The nuclear verdicts in the court system are coming out of liability claims. This is exactly what the general liability and professional liability coverage is for home care agencies. So what it covers is ⁓ third party claims that are related to bodily injury from your client out of some professional and non-professional services that you give to a client. So some examples of those can be a caregiver forgetting to give the medication.

to the client and client has to go to the hospital. That's bodily injury. Alleges that a wound that was supposed to be cleared of infection wasn't cleared because you didn't properly clear the wound, put new bandages on that and put that infection leads to death and you have a death claim. That's a very large claim that the family is gonna bring against your home care agency. Or if the caregiver is accused of neglect and not following their care plan.

accordingly. That can lead to a potential lawsuit. We talk about a slip, trip, or fall in the bathroom, like I said earlier. Well, was the caregiver supposed to be in the bathroom with the elderly person? Were they supposed to be outside the bathroom? Were they sitting on the couch at the time, just waiting for the person to finish and then come and get them? It's really important to know

what your team is doing out in the field and the proper protocols that they need to follow.

Miriam Allred (40:30)
So that's what it is is is second to workers comp. This is the most the most expensive but also the most common.

Gavin Studner (40:37)
Yes,

yes, this is exactly second to workers' compensation. is not only you need it to get licensed wherever you are, whatever state you're in, but also this is a second expense within insurance that's so high for home care agencies.

Miriam Allred (40:54)
Okay, so the rates are also increasing for this as well. Is that just a result of workers comp going up or what are the factors leading to these rates going up?

Gavin Studner (41:06)
So we are going to look at them in kind of like two separate bubbles. So you have your workers' compensation. ⁓ That is in itself, that's for your employees and the bubble of that increasing due to medical costs, wages going up, et cetera. The other side of professional liability and general liability, that's going up because of the nuclear verdicts in the court system. That's going up because the cost of claims has increased so much.

So if an elderly person slips, trips, or falls in the bathroom, they hit their head, they have to go to the hospital, well, their medical bills are going to be expensive. On top of the lawsuit that's going to come from the family for alleging that you didn't properly take care of their father, mother, sister, brother, et cetera. And then you have to, on top of that, pay attorney's fees to defend yourself in court, which the insurance carrier is paying for. They're paying for your attorney fees to defend.

the insurance company and thus you as a home care agency. Well, attorney fees have gone up too. Everything across the board has gone up and you add these nuclear verdicts in the court system where these claims payouts are astronomical. Insurance carers need to raise rates in order to make money.

Miriam Allred (42:14)
Okay. What kind of increase are we seeing? If you have to put again, I know it's state specific and area specific. What kind of increase have, are we already seeing? Like, have we seen an increase this past year or the past five years, or are we just at the start of the increase and what kind of percentage increase are we looking at?

Gavin Studner (42:31)
We're just at the start. We're just like Work With Compensation, we're just at the start here. We're looking 5%, sometimes 10%. If you have an umbrella policy, that may be 10%. It really is hard to put a number behind it because there's so many factors, but an increase is what you're seeing right now.

Miriam Allred (42:53)
Okay. And same question around like what can owners do about this? Is there anything they can do, should do, like what immediate action should they be taking?

Gavin Studner (43:05)
At this point, you have to be proactive. You cannot be reactive because what's happening is insurance carriers are requiring a lot more from home care agencies in terms of making sure you are properly protecting the business and thus properly protecting the insurance carrier. Something like safety committee meetings.

Can you hold monthly safety committee meetings? Not only talk about workers' compensation and that bubble and how we're keeping our employees safe, but how are we keeping our clients safe? What trainings are we doing for our employees to make sure that they're properly handling clients and helping clients doing their job but in a safe way for themselves and the client?

Miriam Allred (43:45)
I like this this phrase that you keep using, which is the safety committee meeting. I and I like that you keep using the word proactive too, because obviously the nature of this business is the clients and the caregivers. The caregivers are taking care of the clients. Like that is the heart of what's happening. And so it seems obvious to everyone listening to this. Like that's all we're focused on. Like that is what we're thinking about. That's what we're talking about. That's what we're doing. But I like this just additional layer of like designating a meeting and a time.

to talk about safety. know, I think we think about training and you know, whether we're doing it or not and are the caregivers properly trained and do they the tools and resources? But I like, I like this concept of just like designating a time and a meeting to talk more in depth about this, like the slips, trips and falls and the bathroom. Like what exactly are we doing if and when that happens and how do we respond and what do do about it? Like just, just making it of a more designated concentrated effort on this.

Are you seeing a lot of your clients, home care companies that you're working with, is it this designated time meeting to think about and talk about this? Or is that probably one of the things you advise them on is like, make this a more formal thing inside of your operation.

Gavin Studner (44:59)
make it a more formal thing inside your operation. Designate people to be able to help just come together and collaborate on what are we doing well, what areas are of concern, and where can we be doing better, and how are we going to get there. So that's part of the proactiveness, and I like that you love that word, because I love that word too. You really need to come together as a team and think about risk, organizational risk.

Insurance is your backstop. So you have insurance as your backstop. Something happens, you have your insurance policies in place. Hopefully you have the right insurance policies in place and not those Swiss cheese insurance policies we talk about. But that's your backstop. That's the reactiveness. The proactiveness is what are you doing ahead of time to make sure you don't need this insurance backstop? Because when you use your insurance backstop, that means that your costs are going to increase because the insurance carrier is paying out money on your account.

So you don't wanna use this insurance backstop if you don't have to because it's gonna lead to higher costs. So upfront, be proactive, stop anything from happening before you hit the backstop.

Miriam Allred (46:09)
And I'm just thinking of all the people listening to this, like, have they been through claims? Have they not? Are they proactive? Are they reactive? Or are they thinking I'm good? Like, do you probably hear that a lot of the time that people just think like, hasn't happened yet, we must be doing something right. Like, I think we're okay. Like, just they're just complacent. Like, is there a lot of that?

Gavin Studner (46:18)
Hmm.

You're not good. You're not good. ⁓ I'm sorry. If you were thinking just because you haven't had claims, you're good. You're lucky. I think that if you're saying you're good, that means you can back it up and saying you have a risk management safety committee meetings. You have proper protocols in terms of hiring practices. You have...

Checklists, let's just use the auto checklist. You're checking, you make sure your caregiver has their auto coverage in place every year. You have proper caregiver plan procedures. You have procedures in case of a claim happening. Even though you haven't had a claim, you need to make sure that if a claim happens, what do we do? This isn't a fire alarm situation. You need to have a clear plan, just like how if you're in a building and there's fire exits, you have to know where your fire exit is and what's the plan. Same situation here.

So if you're good, really think about it and mean it. Sorry to be so direct.

Miriam Allred (47:29)
No, that was great. And that's a really good point because there likely are businesses that hear this that think hasn't happened to us yet. But you're saying it will happen. It's only a matter of time before something happens. And when it happens, do you know what to do? That's a conversation you should be having with your broker. If and when this happens, what do I do? What do we do? What are the specific next steps? Because you don't want it to be a fire alarm situation where nobody knows what's going on.

Gavin Studner (47:56)
Exactly.

Nailed it. 100%.

Miriam Allred (47:59)
Let's talk about this, this third and final bucket, which we've kind of covered indirectly, but I want to give you a little bit more time on it around these carriers. They are demanding more than ever before. and they are more attuned to the risks of home care. You know, what's happening in the home, all of the risks that come with that. They are, they are demanding more likely because they know more and there's just

more volume of home care companies. And so there's more exposure to it. ⁓ just explain anything additional that you have to offer around why are they being so particular and why is this important for home care owners to understand.

Gavin Studner (48:43)
Yeah, so mean, going back to what I said earlier, I will raise the point again, that insurance is cyclical. You have hard markets, soft market cycles, and you talk about the bubble of workers' compensation and, you know, that bubble bursting of the soft market for the past 15 years. You also have, on the other side, general liability, refreshing liability, and the other coverages. Typically, carriers who write workers' compensation don't...

Not typically. A lot of the time, they don't write the liability as well. So you kind of have two different carriers, two different buckets that will write one, but not the other. Sometimes they'll do both. When it comes to home care agencies, typically it's two different carriers because care doesn't want to write both when it comes to home care. It's too risky. So we talk about now the professional liability, general liability side, and these nuclear rigs in the court system. And we talk about the soft market, hard market cycle. And now we're heading towards a hard market cycle in the home care industry.

Carriers have been for the past couple of years cycling out, which was the beginning. So Selective Insurance Company, one of the largest insurance companies in the country, pulled out of writing home care effective January 1st, 2024. So January of last year, year and a half. Cincinnati Insurance Company, again, one of the largest insurance companies in the country, put a temporary moratorium on writing new business for home care agencies three years ago. They have kept their

if their clients wanted to stay, but they have not written any new business in the home care industry. And that remains today that moratorium on new business. So you're seeing this shrinking of insurance carriers that are willing to write home care agencies. And we talked about earlier the hard market cycle where when you see a shrinking of carriers that are willing to write in an industry, well, in capitalistic society, that means less competition breeds higher costs.

not only does it breed higher costs because there's less competition and carriers know they can make more money, but also you have these nuclear verdicts in the court system and liability rates going up. So they're also trying to make more money as well. So it's just a combination of all these factors leading to what we have today, which is less carriers willing to write in the industry, higher nuclear verdicts because of the court system and attorneys making a lot more money than they should. And that's where we are. And it's concerning.

⁓ It's something that home care agencies need to think about.

Miriam Allred (51:04)
Okay,

I know we're like, it almost feels like we're going in circles, but I want to just make sure I'm really understanding this. So they are writing less in this industry because they better understand the risk and they're not willing to take on those risks. Is that accurate?

Gavin Studner (51:21)
I think they always understood the risks. I think that the climate that we're in, the macro climate, has made it more difficult for this type of risk because the liability concern. So when home care, it's so different than, let's say, a manufacturing plant. A manufacturing plant, the liability is a lot lower because you have your employees in a central location. They're all there. So your liability cost for a potential third-party claim is much lower.

For home care agencies, your caregiver is not in your direct control. They are in a client's home. You cannot directly control a caregiver who is out in the field with a client, with a patient. So the problem you face there is that there's much less control in that type of environment, which leads to more claims, which leads to a higher liability because it's not like a manufacturing plant where everybody's in a central location.

So it's not that insurance carriers haven't recognized the risk. I'd say that because of the climate, they're losing more money and more insurance carriers are just pulling out of the, right in the industry in general and cycling into industries where they see opportunity to make more money.

Miriam Allred (52:30)
Okay, this is interesting because home care is on the rise. The demand for the care is exponential. The number of home care businesses trying to get licensed is exponential. And so the timing of all of this is really interesting is that there's less insurance carriers taking this on, but at the same time, the industry is on the rise.

Do you think that that's gonna become an issue? do you ever come across home care companies that can't work with these carriers? Like they, there's like just not the opportunity or they have to pay more. Well, they do have to pay more. That's what we're talking about. But could there be a world in which like this becomes a bigger issue?

Gavin Studner (53:13)
To be perfectly honest, in other industries, it has become a bigger issue. I mean, if you look at the transportation industry, which I'm glad I'm not in, I mean, that is a huge issue in terms of insurance costs because unfortunately, over-the-road claims and losses have skyrocketed because of the court system and accidents happening. In terms of home care specifically, I'd say that you can always get insurance.

Insurance carriers may just put out a price and say this is the cost we're willing to write for this kind of risk. So there's never a concern of being able to get insurance. It's the cost of the insurance that's going to be concerning.

Miriam Allred (53:52)
Okay.

And a minute ago, you rattled off a couple of names of these big carriers that write for home care. Can I put you on the spot and ask you to just kind of rattle off maybe the top three, five, seven, like are, are there like a big five that most home care companies work with or are there a bunch of little guys that are also writing for home care?

Gavin Studner (54:12)
There are not a bunch of little guys that are willing, insurance carriers that are willing to write for home care because it's such a big risk. ⁓ Regional insurance carriers aren't really writing and I wouldn't recommend going with a regional carrier because then you're talking more so about the Swiss cheese coverage we talk about. You're gonna get less. So you really wanna go with a large national carrier. ⁓ We are proud to represent every insurance carrier.

We have access to every insurance carrier. We know the industry inside and out. We know which carriers to go to, which carriers are currently writing new business, which carriers have a moratorium like Cincinnati, and which carriers aren't writing new home care business like Selective. So, you know, it's just a matter of being with a broker that understands the industry and understands the trends and the insurance carriers and making sure you don't have Swiss cheese coverage because, I pay for something that's not gonna be there for you when you need it.

Miriam Allred (55:08)
Yeah, that's the last thing that we want happening. I, a home care owner is listening to this

What are three questions that they should go and ask their broker right now after hearing this? Like they just listened to all this, they picked up, some nuggets here and there. They feel a little bit pressure, like they should have this conversation with their broker. what,

should every owner after hearing this go to their broker and ask them three things? What should it be?

Gavin Studner (55:30)
Number one, what are you doing for me? What is it that you're providing me outside of giving me an insurance policy? Number two, okay, well, what can you do for me? How can you help me? Because I hear that the insurance climate is changing. I hear I should be proactive. What have you done? What can you do? What can you offer me? And quite frankly, if the answer isn't what you're looking for or what you think you need, maybe time to look elsewhere.

at that time. You need to have somebody like your attorney or accountant who understands what you need. So I think those questions are the ones that will come to mind. And the other question I'd say is where are my exposures in my current insurance program? I understand insurance is a backstop. need to be proactive and hopefully you're giving me the tools I need to be proactive. But also what's my insurance program looking like? Should I be talking about cyber?

at this size of my agency? Should I be talking about employment practice liability, which covers sexual harassment, wrongful termination, and many other things at the size of my organization? Maybe not a conversation for startups, but certainly a conversation as you continue to grow. How has my insurance program changed as I grow?

Miriam Allred (56:50)
Gavin, you're good. You're really, really good. I'm not gonna lie. ⁓ The gray hair and you've been talking about this at the dinner table since you were 13. Like, know this through and through, which is impressive, but you're so knowledgeable, which I just love. Again, I'm not thinking about insurance. A lot of owners, operators aren't thinking enough about insurance. That is why we have this conversation. ⁓ This is your stage to...

Gavin Studner (56:54)
The gray hair. It's all the gray hair.

13.

Miriam Allred (57:19)
Be the voice of insurance for all of these home care companies. Any last thoughts or statements that you want to make again, if you have to shout something from the rooftops about insurance to all of these home care owners and operators listening, what is it that you want to make sure to drive home?

Gavin Studner (57:35)
Insurance is not a commodity. Please, I'm yelling it from the rooftop. I've been saying it. I learned it from my father who learned it from his father who learned it from his father. So fourth generation back to 1927. I'm telling you the same exact thing back in 1927 what was said. Insurance is not a commodity. We need to stop looking at it as a commodity and instead looking at it.

as an asset, something that we control, something that we need, something that we need to be there for us. So let's think about it in that nutshell. And we're happy to help.

Miriam Allred (58:13)
I love it. love it. In our last couple of minutes, Gavin, some people may not know a whole lot about Acrisure Obviously you've just proven, you can talk the talk and walk the walk, which I love. Any, last words about just the value of working with Acrisure and working with the, home care insurance group there, and maybe something that will help that you can layer in is like your relationship with the HCAOA. You all have come up with a program.

kind of design for home care companies. Maybe you could share a little bit more about that as well.

Gavin Studner (58:43)
Absolutely. So ⁓ this is my time I get to talk about how great our team is. And I love it because the camaraderie that we have is so important. And when you have a team who works well together for so many years and is in sync, I mean, that helps you as an agency owner because you're not going to have the turnover you can see with other insurance brokers. You're going to have your contacts that are here. And also, we're all a good group of people to work with. So our team

believes in proactivity and communication. And that's who we are. I mean, one thing that I love that we did was we saw this concern for home care agencies a while ago and how the tide was going to start changing. We saw that wave out in the distance and that it was coming. So what we did was we partnered with one of the top insurance carriers in the country and we said, look, all of our clients are gonna follow these protocols, procedures, because we're gonna give it to them. We're gonna give them the tools, we're gonna them the checklists, we're gonna give them everything that they need to be successful.

and they're gonna follow it because they want that. Our clients want to manage risk and make sure that they, as executive officers, are safe and their company's safe. So we made a sweetheart deal with an insurance carrier so that our clients reap the benefits of kind of being siloed from this entire macro world. So look, for home care agencies that qualify to be in this program and care, they're gonna see lower costs than their peers, especially as this wave comes and it hits hard.

the ones who are within this program are going to be somewhat siloed from that macro level. So I love what Acrisure has done. It's incredible from a people and technology standpoint and from an insurance program standpoint. And I'm glad that Odell Stunder partnered with Acrisure back in 2015 because it's been great ever since.

Miriam Allred (1:00:35)
Where can people go to learn more about that program? Should they reach out to you directly or what's the best place for them? Where should they go to reach out?

Gavin Studner (1:00:44)
Reach out to me directly. I believe on your website there is a link to our home care email address, which either gets forwarded to me, gets forwarded to another member of our team, and we'll reach out. Again, communication is extremely important and we believe in quick communication. that is probably the easiest way. We are rebuilding our home care website right now, so it is temporarily unavailable, but I anticipate that in the coming weeks that's gonna be relaunched.

into this beautiful, beautiful thing and Home Care Strategy Lab is going to be on that website. So please check it out, reach out if you have any questions or concerns. Happy to have a conversation ⁓ with myself or another member of our team.

Miriam Allred (1:01:28)
Amazing more coming soon. I'm so glad you just talked about that program every owner listening to this It's worth reaching out to see if you qualify and see if you can benefit from that program You all have built this with a carrier with HCAOA away to offer something really Powerful for the industry and I think it's a great opportunity for people to reach out. So Gavin, I'll say it again. You're good This was awesome. You are so knowledgeable You're so good at breaking things down and articulating things again for someone like me that this is not my forte like I can

I can understand everything that you shared today and I understand its importance and I hope everyone that listens to this will feel the same. So thank you for joining me in the lab and thank you for everything that you shared today.

Gavin Studner (1:02:08)
It's been awesome. I've had a great time. Thank you for having me. I hope I was able to help from an educational standpoint and have fun along the way.