The Complete Guide to Insurance for Assisted Living Facilities

Accidents, reputational damage, malpractice, and even natural disasters can cause assisted living facilities to pay fines, enter costly legal disputes, or even shut down. Assisted living facility operators must keep a comprehensive insurance plan to manage their risk exposure and make sure these and other events are covered. With so many moving parts, including residents, staff, property, data storage, and visitors’ safety, assisted living insurance coverage must be as diverse as the facilities that rely on it.

In this article, we offer a detailed explanation of assisted living insurance to help facility owners secure their assets, protect their residents, and recover from disasters.

What Risks Do Assisted Living Facilities Encounter?

Part of the complexity of choosing assisted living insurance is the combined risk exposure of the facility itself, which simultaneously serves as a healthcare facility, a place of residence, a visitation space, and a place of employment. It inherits risks from all four, which can be broken down into six main categories:

• Risks to Residents: Medical emergencies, accidents, and related liabilities, such as errors in medication management or treatment administration, pose risks to residents.
• Risks to Property: This includes many of the potential incidents commonly associated with any owned property, including theft, vandalism, fire, flooding, wind, and other natural disasters.
• Risks to Staff: These involve employee injuries and workers’ compensation claims, as well as risks related to the impact of staffing shortages or employee misconduct on the quality of the care and the reputation of the business.
• Risks to Compliance: As a healthcare facility, assisted living properties have special licensing requirements and federal compliance standards on both state and federal levels.
• Risks to Visitors: Accidents or injuries related to visitors carry their own liability risk for assisted living facilities.
• Risks to Reputation: Any claims of misconduct or malpractice can damage the facility’s reputation, impacting its ability to offer care in the future for new residents and their families.

Every business experiences some of these risks, but assisted living facilities combine different types of settings, increasing their overall exposure to risk. Industry-specific risks, such as visitor well-being and professional liability, are layered on top of the costs of insuring the building, residents, employees, and owners from common causes of damage and injury.

What Types of Insurance Policies Should Assisted Living Facilities Have?

To cover the broad scope of these categories of risk, assisted living facility owners should have a comprehensive policy that includes multiple types of coverage, including the following:

• General Liability Insurance: Protects businesses from third-party claims for bodily injury, property damage, and personal injury, including legal costs
• Professional Liability Insurance: Care-related claim protection, including negligence and malpractice, which can impact the reputation and licensure of assisted living facilities
• Property Insurance: Coverage for the buildings themselves, as well as their equipment and contents
• Commercial Auto Insurance: Extends coverage to vehicles used for facility purposes, such as transporting residents or carrying supplies, including personal employee vehicles used for company work
• Workers’ Compensation Insurance: Compensates employees for workplace injuries, including medical costs, legal fees, and loss of income (required by state law)
• Business Interruption Insurance: Compensates the business owner for the costs of relocation, extra housing, transportation, and lost income if the facility becomes inoperable due to a covered loss
• Cyber Liability Insurance: Protects the facility from data breaches and other cyberattacks, potentially reimbursing for damages related to losing resident information
• Umbrella Insurance: Extra insurance beyond conventional policies to fill any remaining coverage gaps

Achieving a balance of policies that covers an individual facility’s needs can be difficult without knowledgeable guidance. Facility operators recruit local insurance teams experienced with protecting assisted living facilities in their states to create a plan that works for them.

What Factors Impact the Cost of Assisted Living Facility Insurance?

These factors can determine how much an insurance policy for an assisted living facility will cost:

• The extent of the coverage and size of the deductible
• The size of the facility, including the number of residents
• The level of staffing, including qualifications
• The level and type of care provided, including specific medical services
• The claims history of the facility
• The safety and security measures already in place

While some of these factors can be changed and others cannot, assisted living facility owners can strategically lower their insurance premiums by deploying these strategies:

1. Update employee training and certification
2. Conduct internal facility inspections and schedule regular maintenance
3. Update safety protocols and retrain staff in emergency response processes
4. Upgrade cybersecurity measures to protect sensitive information about residents, employees, and the business.
5. Refine documentation and reporting workflows to make potential audits or investigations go more smoothly

These steps can provide assisted facility owners with a starting point for improving their facility’s coverage and creating a plan for any needed coverage extensions.

Choose Pro Insurance Group to Protect Your Assisted Living Facility’s Residents, Property, and Reputation

Assisted living insurance must cover a broad range of scenarios, from healthcare malpractice and resident injury protection to property damage coverage and employee injury compensation. Facility operators should work with local insurance providers familiar with the compliance requirements and needs of assisted living facilities.

Pro Insurance Group understands the intricacies of this complex industry. Our experienced agents can conduct a personalized risk assessment and help you find the right combination of insurance coverage that meets your specific needs. Contact our team today to learn how we can help you close coverage gaps, protect your business, and operate your facility with confidence.