7 Risks Assisted Living Facilities Face Without Proper Insurance

As the U.S. undergoes unprecedented growth in its aging population, demand for assisted living facilities is rising. In an already high-risk industry, that demand puts greater strain on owners and staff to keep residents and visitors safe. Post-pandemic staffing has still not fully recovered, which means the risk of operating without proper insurance has never been higher.

Below are seven of the most significant risks operators face, along with the coverage that responds to each.

1. Resident injuries

Keeping residents safe is the first job of any facility, and it is the largest area of insurance risk, since residents are among the most at-risk groups in the country. Falls alone account for around 3,500 fatal injuries per month among seniors in the U.S. For the 18 percent of facilities with a dementia care unit, the risk is even higher.

Coverage: general liability and professional liability respond to claims involving resident injuries from falls or lapses in supervision.

2. Medical errors

Beyond being a residence, a facility often provides medical supervision, which raises its risk further. Medication mistakes, including missed doses, mix-ups, and documentation errors, can harm residents and lead to serious liability claims.

Coverage: professional liability protects owners and staff from the cost of claims related to medical management.

3. Visitor injuries

Facilities receive a steady flow of visitors who can also fall or be injured on the premises. Like any on-site business, a facility faces a high risk of liability claims for the resulting medical costs.

Coverage: general liability covers third-party bodily injury claims, both medical and legal.

4. Abuse and molestation claims

Facilities serve a vulnerable population, and residents with physical or cognitive disabilities are often targets of abuse. Emotional, physical, or financial abuse claims can lead to costly litigation and lasting reputational damage, and even an unfounded claim can permanently harm the business.

Coverage: dedicated abuse and molestation insurance is essential, because standard policies usually exclude or sublimit it. See our deeper guide to abuse and molestation coverage.

5. Business interruption

The facility itself also needs protection. Storms, fires, burglaries, and other catastrophic events can force temporary closures that cut off revenue while payroll and overhead continue.

Coverage: business interruption replaces lost income during a covered closure and can cover ongoing expenses and relocation costs.

6. Employee injuries

Assisted living staff are a high-risk worker group: they lift and assist residents, encounter illness, and work under high scrutiny and stress. On California's High Hazard Industry List, assisted living scored 8.3 on the DART safety scale, second-highest on the list, versus 4.2 for general medical and surgical hospitals. That translates into higher turnover, more injuries, and greater liability.

Coverage: workers compensation is required by law and covers injured employees' medical costs and lost wages while protecting the facility from related liability.

7. Cybersecurity breaches

Facilities store sensitive medical and financial records, yet because they are not banks or retailers, many operators overlook cyber risk. That makes them prime targets for hackers and fraudsters seeking to steal resident information.

Coverage: cyber liability covers the response, legal, and recovery costs of a cyberattack. A single breach can cause lasting reputational damage to a facility of any size.

Covering all seven risks

These seven exposures are exactly why a generic business policy is rarely enough for a care facility. A broker who places senior-care accounts can build a program that responds to all of them and size each limit to your acuity and services. See the full coverage checklist and current pricing in our cost guide.

Frequently asked questions