The Importance of Appropriate Insurance Coverage
Residential assisted living providers are essential to society, offering critical support and care to seniors and individuals with disabilities. However, running an assisted living home comes with a range of risks and potential liabilities. That's why it's important to have the right insurance in place.
Insurance coverage comes in many forms, and just getting commercial general liability insurance (CGL) is not enough if you are an assisted living operator. Pinkowski Law interviewed Blake Crawford, Vice President at Assured Partners, a brokerage specializing in insurance coverage for senior living, to talk about the types of coverage that assisted living operators need. “The highly-regulated senior living industry requires constant action to monitor proper and adequate coverage,” says Crawford. “This is not just to protect yourself, but also maintain compliance with state mandates.”
Below is a list of liability coverages that are either required by the state, or recommended for adequate coverage. This is not an exhaustive list of all coverages as each insured’s risk appetite is different and requires an independent review. This list is not state specific and is a generalized overview. For a more detailed conversation about what fits your community best, we suggest that you reach out directly to a broker like Assured Partners that understands your business.
General Liability – Insurance protection for third-party property damage or personal / advertising injuries allegedly caused by you or an employee.
Typical Limits are $1M/$3M
Professional Liability - insurance policy that protects your business in claims of negligence, malpractice, errors, and omissions during the fulfillment of a professional service.
Typical Limits are $1M/$3M
Sexual Abuse and Molestation - Insurance to provide protection for claims of sexual abuse made against a policyholder and a policyholder's employees.
Limits vary as it’s combined in the GL/PL limits or some carriers separate into sub limits.
Employment Practices - Includes coverage for defense costs and damages related to various employment-related claims including allegations of Wrongful Termination, Discrimination, Workplace Harassment and Retaliation.
Typical Limits are $1M/$3M or $1M/$2M
Umbrella or Excess Policy - Extra insurance that provides protection beyond existing limits and coverages of other policies.
Workers’ Compensation – Injuries to your workers are covered by state-mandated Workers’ Compensation coverage.
Automobile Insurance – If your workers are driving your vehicles or using their own vehicles for your business purpose they may not have coverage under their own auto policies for accidents that happen on the job.
In addition to providing coverage for the specific risks listed above, insurance policies will cover attorney’s fees, defense costs, and expert witness fees, which can run into the tens of thousands of dollars (or more).
Liability insurance is not required by law in every state for licensed residential assisted living providers. However, some states do mandate that assisted living facilities carry liability insurance as a condition of licensure.
For example, in Colorado, assisted living facilities must provide proof of professional liability insurance with minimum limits of ($500,000 per incident and $3,000,000 annual aggregate per year).
In California, residential care facilities for the elderly must maintain liability insurance covering injury to residents and guests in the amount of at least one million dollars ($1,000,000) per occurrence and three million dollars ($3,000,000). Similarly, in Florida, the administrator or owner of a facility must maintain liability insurance coverage that is in force at all times.
In other states, such as Texas and Arizona, liability insurance is not explicitly required by law, but it is still highly recommended as a best practice for protecting your business and residents. State Medicaid-approved providers in Arizona are required to maintain CGL coverage in order to contract with the carriers that process claims for long term care (ALTCS).
It is important to note that regulations and requirements can vary from state to state, and even inside of a specific state depending upon the services provided, so it is essential to check with your state's regulatory agency, an insurance broker that understands your business, and/or your favorite attorney to determine the specific insurance requirements for residential assisted living providers in your area.
The information herein is intended to be educational and an introduction to the subject matter presented. Despite any statutory or regulatory references cited in the article above, it is NOT specific legal advice to be relied upon for specific individual circumstances. Contact your own legal professional or reach out to our firm if you would like specific advice on this topic.
Look for additional blog posts on topics of interest to Assisted Living and Behavioral Health operators. We welcome topic suggestions! Write to michelle@pinkowskilaw.com if you are curious to learn more about a certain topic impacting assisted living or other group housing concerns.