Risk Management Strategies Every Assisted Living Operator Should Know

Assisted living facilities (ALFs) are seeing increased oversight in everything they do, as a result of the sensitivity of their services and the reality of their industry. Many families and residents know the risks of living in these facilities, and as costs have reached a median of over $5,000 per month, expectations and fears have never been higher. This translates into an increased risk of litigation for assisted living facility directors, who are already struggling to properly care for the over 1 million current ALF residents, protect their assets, and retain their employees in a high-risk industry.

Assisted living operators can solve the most common issues in their industry, including the risks of resident injuries, professional liability, and employee safety. Business insurance customized to the needs of ALFs remains their best safety net in a growing and challenging industry.

Common Challenges in Assisted Living Facility Operations

Assisted living facilities face many industry-specific challenges, including the liabilities of providing healthcare and lodgings for residents, many of whom cannot manage their medications, finances, or daily tasks on their own.

The National Center for Assisted Living assembled this report on falls among the elderly. According to their findings:

• Nearly 1 in 3 older Americans suffer a fall each year
• Over 1 in 4 injuries sustained during falls involve head trauma
• The rate of fatal falls, especially among adults over the age of 85, increased across the board from 2000 to 2020

In dangerous falls alone, assisted living facility operators deal with an injury risk that affects 33% or more of their residents. Coupled with the fact that ALF residents need assistance in everyday life, especially for the 18% of facilities with dementia care units, liability coverage for injuries becomes a major concern.

However, falls are not the only risk that should be on a facility operator’s radar. Staff also handles sensitive daily tasks, including medicine administration, physical therapy, and mental care. In any of these areas, employees deal with liability risks that extend to their operations, including:

• Employee injury
• Legal liability for medication mismanagement
• Claims of abuse or neglect

Nearly 3 in 4 ALF operators report increases in lawsuits year-on-year. With so many responsibilities, assisted living facility operators need complete risk management strategies to protect their assets, investments, reputations, employees, and residents. This includes business insurance that targets the needs and coverage gaps of their facilities.

Steps to Manage Risk in an Assisted Living Facility

Risk management strategies that include versatile insurance coverage serve not only to protect a facility’s assets but also to give employees, residents, and their families peace of mind. Facility operators should consult insurance brokers with experience managing the specific risks in the assisted living facility industry. They can personalize the plans to their needs. However, these general steps can be used as a guide to get started managing risk factors and protecting the facility:

Conduct an Internal Risk Assessment

Risk assessments help assisted living facilities put their liabilities into focus in the context of their daily operations. A thorough risk assessment should include:

• Evaluating on-site safety
• Assessing equipment condition
• Checking site security vulnerabilities
• Reviewing regulatory compliance
• Going over financial risks
• Testing cybersecurity measures

Risk assessments help operators confirm their current safety status and liability risk. Many issues with ALF safety can be addressed in this step without involving a third party. For example, a broken sidewalk, inconsistent financial record, or an outdated digital security system can be noticed and fixed by internal teams.

Invest in Safety, Training, Security, and Compliance Features

Assisted living facility operators can roll out fixes for outdated or inadequate safety and security systems after testing them. For example, ALF operators can improve their staff training strategy, refine their emergency response process, improve surveillance technology, and create stricter visitor and resident background checks. 

By assessing these features, operators can confirm their industry compliance, reinforce safety and risk management procedures among their employees, and set up monitoring systems to respond to emerging risks in the assisted living industry.

Choose the Right Combination of Insurance Policies

Top-performing assisted living facility operators focus on their insurance policies when assessing their risk. Different policy types or limits can protect facilities against many of their most common challenges:

• General Liability Insurance addresses major coverage aspects in ALF operations, including resident and visitor injuries.
• Professional Liability Insurance helps prepare for many industry-specific issues in ALFs, including medication mismanagement, accusations of neglect, and other claims against employees.
• Workers’ Compensation Coverage is required coverage that protects businesses from the costs of employee injuries by paying for the costs of medical bills, lost wages, and settlement fees.
• Abuse & Molestation Insurance protects facilities from liabilities involving claims of abuse, which can damage a facility’s operations and reputation even when the claims are unfounded.
• Cybersecurity Coverage addresses risks to resident data, security systems, and other digital systems, including data leaks.
• Commercial Auto Coverage protects vehicles used for facility operations, even those owned by employees, which may not be covered by their individual policies.
• Directors & Officers Coverage covers high-level employees from claims of financial mismanagement and other liabilities related to their decisions.
  
  Note: Commercial Umbrella Insurance can protect businesses when other insurance policy limits fail to cover the damages.

Consult an Experienced Insurance Broker

Experienced insurance agents prioritize risk management strategies specifically for the assisted living industry, including assembling the right combination of business insurance policies, deductibles, and limits. Personalized risk management remains an ALF operator’s best resource to prepare for the challenges in their industry.

Insurance Agents Personalize Risk Management Strategies For Assisted Living Facilities

At Pro Insurance Group, our experienced team of agents helps assisted living facility operators create a risk management strategy that addresses common industry challenges while personalizing coverage for each facility. As the assisted living industry grows, facilities will need more guidance in managing these challenges and matching the insurance strategy to their needs.

Contact our team today and schedule a consultation to begin managing risks within your organization with affordable, versatile insurance plans.