Assisted Living Facilities Face Daunting Liability Challenges

With residents of different ages, health profiles and ability levels, your organization must be agile and aware when it comes to protecting them and your company. Insurance and risk management are the two best ways to mitigate the perils that long-term care facilities face. Let’s look at some basic liability coverages and recommended additions.

Commercial general liability insurance is basic, broad protection

Commercial general liability (CGL) insurance provides financial aid if your facility is blamed for an injury to a visitor or an advertising mistake. CGL will help with medical payments, legal bills and damages. CGL does not cover incidents arising out of the use of cars. If your employees drive on your behalf, you will need commercial auto liability insurance.

Professional liability

Your staff members’ professional conduct could result in an accusation of error or negligence. If their actions cause physical, mental or financial harm, your company could be sued for malpractice. CGL insurance does not usually cover these types of clinical actions.

For these, you would need professional liability insurance, also known as errors and omissions or medical malpractice. Professional liability insurance protects your company and staff if they are named in an allegation of professional misconduct.

For staff members who are not certified with a specific professional degree the way doctors and nurses are, you may need allied health insurance. This type of policy covers the actions of orderlies, assisting staff, technicians and others involved in patient care or treatment. Your human resources team and insurance professional should see that all members of your team have adequate liability coverage.

Molestation and abuse insurance

Long-term care and assisted living facilities need to consider the possibility of a staff member being accused of abusing or molesting a resident. There are many risk-control measures you can implement in your facilities, though patient privacy is a major concern. Even with smart hiring practices, training and monitoring, you may still have an incident or allegation. This could result in in an expensive legal defense and high settlement costs. Molestation and abuse insurance can help with all the financial damages you may face should an accusation arise.

Extra liability insurance

Medical data is a primary target for hackers. If it is stolen and causes harm to the victim, they could sue your company for damages. Cyber insurance provides financial assistance to help with recovery and victim compensation. It also encourages policyholders to become more diligent in their cyber defenses. Most cyber insurance providers offer advisory services on hardening systems and maintaining cyber hygiene. These measures will reduce your exposure to breaches, from both errors and cyber crime.
Since even one wrongful death or negligence claim can surpass your primary liability coverage, you should seriously consider umbrella insurance. It may also cover losses not included in your CGL policy. Your broker can help you decide which form is best for your risk profile.

Employment practices liability insurance

When staffing is short, demands on workers may lead to wrongful practices, such as too many hours, too few breaks and payroll errors. Your managers may also have to terminate employment for some workers due to performance issues or budget constraints. All of these can lead to employee lawsuits. Employment practices liability insurance can help with legal defense costs as well as judgments and settlements.

Commercial property insurance for physical assets

Beyond liability insurance, your facility faces the normal risks arising from storm damage, vandalism and fires. For these perils and others that may threaten your building or its contents, you need commercial property insurance.

Be aware that commercial property insurance does not cover earthquakes or floods. You’ll need separate insurance for those specific perils.

Since assisted living facilities also have specialized equipment such as testing and diagnostic instruments or commercial kitchen appliances, you may need equipment breakdown insurance as well. This helps replace critical machinery so you can quickly get back to running smoothly. It may also be written to cover the replacement of refrigerated medicines that have spoiled due to equipment failure.

A solid risk management plan is essential

Many risks can harm your residents, workers, income or facility. A solid risk management plan can transfer some of that risk to insurers, reducing your losses and improving your overall business.

This content is for informational purposes only and not for the purpose of providing, financial, medical or legal advice. You should contact your attorney, doctor, broker or advisor to obtain advice with respect to any particular issue or problem. Read more about our limitation of liability here.