Long-term care facility insurance

What insurance does a long-term care facility need?

A long-term care facility typically needs medical professional and general liability, property and equipment breakdown coverage, workers’ compensation, commercial auto, and cyber liability, plus management coverages such as directors and officers, employment practices, fiduciary liability and crime. Larger operators often add excess professional liability, builder’s risk during construction, and pollution liability for healthcare premises. The right mix depends on the care you provide, your licensure, your buildings and whether you are a for-profit company or a nonprofit with a volunteer board.

How the pieces of a long-term care program fit together:

How do skilled nursing, assisted living, independent living and CCRCs differ for insurance?

The more hands-on care a community provides, the more its insurance program is driven by professional liability. Skilled nursing facilities, with licensed nurses on duty around the clock, carry the heaviest care exposure. Assisted living sits in the middle, centered on daily support and medication help. Independent living looks more like residential property management with hospitality services. Continuing care retirement communities combine several levels on one campus, so they need a program that covers each one without gaps between them.

Choose your setting for coverage built around it:

• Skilled Nursing Facilities — around-the-clock nursing and rehabilitative care
• Assisted Living Communities — daily support for residents who want to live as fully as possible
• Continuing Care Retirement Communities — care at every step of the journey, on one campus
• Independent Senior Living Communities — where active seniors call home

What optional coverages can long-term care facilities add?

Beyond the core program, long-term care facilities can add endorsements for the costs that follow a serious incident: public relations expenses when an incident draws media attention, legal defense when a licensing board opens a proceeding, the cost of evacuating residents in an emergency, and loss or damage to residents’ personal property. These endorsements are usually written with their own limits, which are set by underwriting and the specifics of your account.

• Media event expense. Reimburses covered costs of responding to a media event that threatens your reputation after an incident, claim or investigation.
• Disciplinary proceeding defense. Reimburses legal costs to defend an investigation or proceeding brought by a federal or state professional licensing board.
• Emergency evacuation expense. Helps offset the cost of moving residents off the premises in an emergency.
• Resident property damage. Covers residents’ personal property that is damaged, lost or stolen in the facility, under limits separate from general and professional liability.

How should a senior care operator’s insurance change as it grows?

Each new building, acquisition, service line or management contract changes your exposures, and the insurance program should be reviewed before the change happens, not at the next renewal. Construction needs builder’s risk and construction liability. A new level of care changes professional liability. An acquisition can bring prior claims you did not create. Adding locations is often the point where a single program with consistent limits becomes cheaper and simpler than separate policies.

• Development and renovation. Builder’s risk and primary and excess construction liability while buildings go up or are reconfigured.
• Acquisitions. Prior-acts coverage, the seller’s loss history and how open claims will be handled.
• New services. Adding memory care, skilled nursing or home care changes how underwriters classify the whole community.
• Governance. Lenders, investors and nonprofit boards raise the stakes for directors and officers and fiduciary coverage.