What Every Assisted Living Director Should Know About Liability Coverage

Assisted living facilities provide essential care to seniors, but they must also operate as successful businesses. Assisted living directors must strike a difficult balance between their duties to their patients’ care and their responsibility to protect their assets and stakeholders from risk. Achieving this balance requires a commitment to the compassionate art of assisted facility care, resilience amid industry changes, and professionalism in addressing unexpected challenges.

Here’s what modern assisted living directors should know about the liabilities in their industry. This knowledge can help them protect themselves against costly mistakes and mitigate the risks to their residents, property, and reputation.

The Liability Risks of Running an Assisted Living Facility

Assisted living facilities (ALFs) encounter diverse challenges due to their specific range of services, including many shared by rental housing communities, hospitals, vacation homes, daily care services, and more, including:

Risks to Residents’ Safety

The residents of assisted living facilities are exposed to many dangers, including slip-and-fall injuries, self-harm, and improper care. Any of these hazards can lead to claims, often related to the services that facilities claim to provide. For example, in an ALF with a memory care unit, a patient who wanders outside of their designated area and gets hurt could result in legal claims against the facility by the resident’s family.

On-premise Liability

In addition to direct accidents related to residents’ safety, other on-site risks pose problems for facility directors. Hazards that block accessibility for certain residents, maintenance issues that cause injuries, and any injuries sustained by visitors can all lead to claims.

Professional Liability

Professional liability encompasses a wide range of potential issues for ALFs, including legal claims that staff members failed to meet the required standards of care. While assisted living facilities are places of residence, they are also medical care facilities, which means they are held to a high standard of safety and professionalism. Examples of situations that may warrant claims include missing or misdosing medication, administering the wrong treatment, failing to notice an illness or injury, or committing willful malpractice. 

Family Disputes

Family members reserve the right to dispute any aspect of their loved one’s care. This is a distinct risk related to ALF directors, who must operate a business while managing the expectations and outcomes for residents and their families.

Insurance Coverage Policies for ALFs

Preparing for these and other liabilities begins with adequate insurance coverage. Here are the main types of coverage that ALF directors should consider for their facilities:

1. General Liability: Covers general injury and property damage claims that occur on the premises, such as medical bills that may arise from a slip and fall incident experienced by a family member visiting the facility. These policies also cover the falls of any residents who may be staying at the facility 
2. Professional Liability: Protects facilities from claims related to care quality and staff actions, including potential legal costs and damages (for example, a staff member administers an incorrect medication dose)
3. Abuse Liability: Mitigates costs of legal defenses, settlements, and reputation protection in the event of abuse allegations. Nobody likes to think that abuse could happen at their facility, but what happens if a staff member loses their composure and verbally assaults a resident with a cognitive disability? Abuse liability coverage becomes necessary for addressing costly claims surrounding such an incident.
4. Employment Practices Liability: Addresses claims related to wrongful employee treatment, including wage disputes, wrongful termination, and harassment suits.
5. Directors & Officers Liability: Covers claims related to the actions of directors and stakeholders in the business, including incidents such as a board member embezzling facility funds. 
6. Regulatory Liability: Recoups the costs of mishandling the facility’s oversight of state regulations (for example, an administrator neglects to renew their care license). 

These are the general coverage types, but facility directors may need additional riders to protect themselves from other costs. Facilities that offer extra services, such as resident transportation, dementia care, meal services, specialized housekeeping, massage therapy, and other premium services, may need additional coverage.

How to Improve Risk Management

To manage complex risk profiles, facility directors can follow this simple checklist:

• Conduct safety and regulatory compliance audits
• Document policies, care plans, and employee duties
• Strengthen and document training programs for staff safety, compliance, and professionalism
• Maintain open dialogues with family members
• Consult insurance professionals on best practices for coverage

The key to risk management is transparency at each step of the policy management and communication process. Residents and family members need to remain informed while directors prepare their insurance plans for any eventualities.

Consult Insurance Professionals for Custom Coverage Options 

Assisted living facilities must address serious risks related to medical, professional, and legal conduct. Directors can be overwhelmed by coverage needs without professional guidance. Our advisors at Pro Insurance Group make sure facility directors recognize the protection needs of their specific facility and have access to customized coverage to meet them.

Contact our team today to learn more about liability insurance and how custom coverage is an essential aspect of operating an assisted living facility.