Background Check Issues in Home Care: Insurance Insights

28 May 2024

Crime Policy Exclusions in Home Care Hiring

Home care providers often face challenges when background checks reveal past felonies or theft charges for non-skilled caregiver applicants. This article addresses potential insurance implications and offers guidance on managing these situations while ensuring compliance with insurance policies and state laws.

Potential Insurability Issues

1. Impact on Hiring Practices

The insurance industry carefully crafts policy language to avoid influencing hiring practices to prevent discrimination claims. However, specific exclusions in crime policies, such as the ISO Crime form CR 0021 05 06, can impact coverage related to employee acts known before the policy period.

2. Relevant Exclusions

Under Exclusion D1(a), theft incidents are excluded from coverage if committed by an employee with known past theft or dishonest acts. The term “dishonest act” is not defined in the policy, raising concerns about its interpretation. This vague definition could theoretically exclude many employees if interpreted broadly​ (The National Law Review)​​ (Business Insurance)​.

Managing Background Check Results

1. Requesting Exceptions

Employers can request exceptions from their insurance carriers for candidates with past felonies or theft charges, especially if the candidate has demonstrated honesty and a change in behavior. Dennis Powers, Senior Commercial Insurance Specialist at Inszone, emphasizes the importance of candidates being forthcoming about their past before background checks. A transparent and honest candidate is often viewed more favorably by insurers​ (Huff Insurance)​​ (Hinshawlaw)​.

2. Documentation

If an insurance carrier grants an exception, it is crucial to obtain written confirmation and keep it in the employee’s file. This documentation can protect the employer in case of future disputes or claims related to the employee’s past​ (The National Law Review)​​ (Business Insurance)​.

Understanding Punitive Damages

1. State Regulations

In many states, punitive damages are uninsurable, meaning insurance carriers cannot reimburse policyholders for these damages awarded to claimants. Employers must understand their state’s laws regarding punitive damages to avoid unexpected financial liabilities​ (Hinshawlaw)​​ (Huff Insurance)​.

2. Case Examples

Dennis Powers shares a case where a transportation company faced punitive damages after hiring a driver with a poor driving record, resulting in a fatal accident. This highlights the importance of making informed hiring decisions and understanding the potential consequences of ignoring background check results​ (Business Insurance)​​ (The National Law Review)​.

Frequently Asked Questions (FAQs)

Q: What is the ISO Crime form CR 0021 05 06?

A: This is a standard crime insurance policy form that includes exclusions for theft incidents committed by employees known to have a history of theft or dishonest acts before the policy period.

Q: Can employers hire candidates with past felonies or theft charges?

A: Yes, but they should request exceptions from their insurance carriers and document any granted exceptions in the employee’s file.

Q: Are punitive damages insurable?

A: In many states, punitive damages are uninsurable, meaning insurance carriers cannot cover these damages. Employers should check their state laws for specific regulations.

Q: How should employers handle background check results?

A: Employers should consider the context of the past offense, request exceptions from insurers if needed, and document any exceptions granted to ensure compliance and protection.


Home care providers must navigate the complexities of background checks and insurance exclusions carefully. By understanding the relevant policies and state laws, and by requesting necessary exceptions, employers can make informed hiring decisions while maintaining compliance and protecting their business.

Sources and Citations

  1. National Law Review. “PFAS Regulation and Insurance Coverage Implications.” Accessed May 13, 2024. National Law Review
  2. Business Insurance. “Federal PFAS Changes Open Floodgates to Liability, Exclusions.” Accessed May 13, 2024. Business Insurance
  3. Huff Insurance. “PFAS Insurance Exclusions: How Can They Affect Your Business?” Accessed May 13, 2024. Huff Insurance

By staying informed and proactive, home care providers can effectively manage the risks associated with background checks and ensure the continued success and protection of their business.

Gary Kalina - Inszone Insurance Commercial Insurance Specialist

Gary Kalina

Senior Commercial Insurance Specialist

Gary Kalina is a Senior Commercial Insurance Specialist at Inszone Insurance Services, joining Inszone in December 2021 after the merger with Lamb, Little & Co.

As a Commercial Insurance professional, Gary Kalina is charged with providing his clients, and prospective clients, with a full-service solution to risk transfer, risk financing and insurance placements. Gary’s philosophy is that a commercial insurance program is not a commodity that can be simplified into solely a “market price”. Instead, his goal is to work with his company partners to affect his customer’s bottom lines. While this includes providing programs that are sensibly priced it also includes:

  • Implementing safety prevention strategies to mitigate costly claims from occurring.
  • Providing claims management reviews and consulting to mediate claims that do happen, so they are closed swiftly and accurately.
  • Reviewing client contracts from an insurance angle to inform our clients if they are contractually putting themselves at risk.

Gary has had success using this multi-tiered approach to build long-term and strategic relationships with commercial clients in many industries and disciplines. In proving his worth, he has been able earn his client’s business year in and year out – which is good since he believes no one benefits from a onetime insurance transaction that is based simply on premium.

When he does take a break from work, Gary enjoys living in the northern suburbs of Chicago with his wife and two daughters.

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