Running a hospice business means carrying an enormous responsibility. You're caring for people at the most vulnerable time of their lives, and their families are trusting you completely. That's why having the right insurance coverage isn't just about compliance—it's about protecting your mission, your staff, and the families you serve. But here's the thing: hospice insurance can feel overwhelming. Between professional liability, workers' comp, cyber coverage, and a dozen other policy types, how do you know what you actually need?
This checklist breaks it down into what's essential, what's optional, and what you need to review each year. Whether you're just starting your hospice practice or you've been running one for years, this guide will help you make sure nothing falls through the cracks.
Essential Coverage: What Every Hospice Needs
Let's start with the non-negotiables. These are the coverages you absolutely must have before you see your first patient.
Professional liability insurance (also called malpractice insurance) is your first line of defense. This coverage protects you when someone claims your team made a mistake in patient care—whether that's failure to properly manage pain, medication errors, or inadequate supervision. In hospice care, these claims can arise from emotionally charged situations where families are grieving and looking for answers. Your professional liability policy covers legal fees, settlements, and court judgments. Most contracts and Medicare certification require minimum coverage of $1 million per occurrence and $3 million aggregate.
General liability insurance handles the basics: slip-and-fall accidents, property damage, and bodily injury that happens on your premises. If a family member trips in your office hallway or a nurse accidentally damages a patient's furniture during a home visit, general liability covers it. This is often bundled with professional liability in hospice-specific packages, with average annual costs around $1,900.
Workers' compensation insurance is required by law in most states if you have even one part-time employee. Hospice work involves physical demands—lifting patients, traveling to homes in all weather conditions, potential exposure to infectious diseases. If a team member gets injured on the job, workers' comp covers their medical bills and lost wages. For home health workers, the average rate runs about $2.79 per $100 of payroll, though rates vary by state and your claims history.
Sexual abuse and molestation coverage has become mandatory in most states and is required for Medicare certification. This is uncomfortable to think about, but essential. It protects your organization if an employee or contractor is accused of inappropriate conduct. You can purchase this as a standalone policy or add it to your professional liability coverage.
Optional But Highly Recommended Coverages
These coverages aren't always required, but they fill critical gaps that could otherwise cost you everything.
Hired and non-owned auto liability is crucial if your employees use personal vehicles for work. When a nurse drives to a patient's home for a visit, their personal auto insurance is primary—but it often won't cover business use. If they cause an accident on the way to or from a patient visit, your organization could be liable. This coverage fills that gap and is surprisingly affordable compared to the risk.
Cyber liability insurance protects your practice from data breaches and cyberattacks. Your hospice handles incredibly sensitive information: Social Security numbers, medical histories, financial data, end-of-life wishes. A single ransomware attack or data breach could expose you to massive fines under HIPAA regulations, not to mention the cost of notifying patients and providing credit monitoring. With healthcare being a prime target for cybercriminals in 2025-2026, this coverage has moved from "nice to have" to nearly essential.
Business property insurance covers your physical office, equipment, and supplies. This includes computers, medical equipment, furniture, and supplies in transit to patient homes. While you might think you don't have much valuable property, consider what it would cost to replace all your computers, phones, medical equipment, and office furniture after a fire or flood.
Management liability insurance is an umbrella term for several coverages that protect your leadership team: employment practices liability (for wrongful termination or discrimination claims), directors and officers insurance (protecting board members from lawsuits), fiduciary liability (for retirement plan mismanagement), and crime coverage (for employee theft or fraud). If you have a board of directors or significant staff, these protections become important.
When to Add or Update Coverage
Your insurance needs aren't static. Here are the key triggers that should prompt an immediate review of your coverage.
When you hire your first employee, you need workers' compensation immediately—it's the law in most states. When you expand into new service areas or states, check whether your current policies cover operations in those locations. Some states have different requirements or higher minimum coverage amounts. When you add new services (like pediatric hospice or specialized pain management), review your professional liability policy to ensure these services are covered.
When you sign new contracts with hospitals, health systems, or insurance companies, they'll almost always have minimum insurance requirements. Review these carefully and update your coverage before the contract takes effect. When your annual revenue grows significantly, your coverage limits should grow too—a policy that protected you at $500,000 in revenue may not be adequate at $2 million.
Annual Review Checklist
Set aside time each year (ideally 60-90 days before your policy renewal) to review your coverage systematically. Here's what to check:
First, verify that your coverage limits still match your risk exposure. Have you added staff? Increased revenue? Expanded your service area? Your coverage should scale with your growth. Second, review your certificate holders—make sure all entities that require proof of insurance are listed correctly. Third, check that your policy still covers all the services you provide. If you've added specialized care or new treatment protocols, these need to be reflected in your coverage. Fourth, review your deductibles and premiums. Sometimes increasing your deductible can significantly lower your premium without meaningfully increasing your risk. Finally, check for any regulatory changes. Medicare requirements, state licensing rules, and accreditation standards can change, and your insurance needs to keep pace.
Don't forget to review your loss history. If you've had claims or incidents, your insurer needs to know. Being upfront about your history helps ensure you have the right coverage and prevents potential coverage denials later.
Getting Started with Hospice Insurance
The good news is that many insurance companies offer specialized hospice packages that bundle the essential coverages together at better rates than buying each policy separately. Look for insurers that specialize in healthcare or home health services—they understand your unique risks better than generalist carriers.
When you're getting quotes, have your financial information ready: annual revenue, number of employees, payroll totals, services offered, and geographic coverage area. Also gather information on any past claims or incidents, even if they didn't result in lawsuits. Being thorough and honest upfront will get you more accurate quotes and prevent problems down the road.
Consider working with an insurance broker who specializes in hospice and home health coverage. They can help you navigate the options, compare policies from multiple carriers, and ensure you're not overpaying or leaving gaps in your coverage. The right insurance isn't about checking boxes—it's about protecting the vital work you do every day.
