Risk Management Strategies for the Top Insurance Claims that Assisted Living Facilities Encounter

Assisted living facilities are exposed to scrutiny due to the risks associated with elder care, including the emotional sensitivity experienced by employees, residents, and their families. This exposure includes a high risk of insurance claims, which assisted living facility operators must learn to solve efficiently yet sensitively. The property, as well as its assets, employees, residents, and reputation, could be at stake without a clear insurance strategy.

This article reviews the top insurance claims that assisted living facilities encounter in order to help operators recognize important patterns in their industry. Risk mitigation begins with a clear understanding of the threats of litigation, the security requirements, and the other potential challenges that necessitate proactive insurance strategies in modern facilities.

Why are Assisted Living Facilities at Risk?

Assisted living facilities house millions of the nation’s most vulnerable citizens, with many high-profile cases involving general and professional liability. For example, a Washington family received $2 million in 2024 when their loved one’s bedsores went unnoticed, leading to their death.

However, dramatic settlements totalling over $1 million are not the only serious issue that assisted living facilities must address. According to CDC data, 1 in 4 older adults report falling every year, resulting in the leading cause of death among people 65 and older. Every day, assisted living facilities must enforce vigilant precautions that include fulfilling their legal obligations, personalizing care for at-risk residents, and anticipating the frequency and severity of claims based on their risks.

Even rising staffing shortages, which affect 63% of assisted living providers, increase the potential for risk among these facilities by further straining resources. Nearly half of all facilities fear closures due to workforce challenges alone.

What Types of Insurance Claims are the Highest Risk?

Assisted living facility operators prepare for these and other risks with versatile, personalized insurance coverage. To properly assess their facility’s risk exposure and create an insurance plan to match, they first must recognize the top five insurance claims that assisted living facilities face:

1. General Liability Claims

General liability claims cover many of the most common allegations against assisted living facilities, including slip and fall injuries. Yet, facilities that offer different care options encounter different risks. For example, facilities providing memory care must prepare staff and facilities to treat dementia patients, who may disregard security systems and endanger themselves without proper care. Versatile general liability helps facilities avoid the financial losses involved in these claims, which can include not only fines but also legal settlements for the residents and their families.

2. Professional Liability Claims

Professional liability claims often overlap with general liability claims. They can include allegations of malpractice, medication errors such as incorrect or mistimed doses, care delays, and other medical mistakes. In an assisted living facility setting, these errors can lead to injury or even death, with employee responsibilities increasing depending on the type and degree of care offered.

For example, altercations with residents, which can be common in dementia care facilities, could encompass both general liability and professional liability, especially if bodily injuries are involved.

3. Workers’ Compensation Claims

The aforementioned staffing difficulties can lead to workers’ compensation claims, further complicating the already risk-prone employer-employee relationship in this industry. According to the AHCA, 93% of facilities increase wages to retain staff, and 98% report that their employees work extra shifts and overtime to cover shortages.

Tired, overworked employees are more likely to make mistakes. They can slip and fall or sustain other injuries, leading to workers’ compensation claims that may include medical damages and lost income.

4. Commercial Vehicle Claims

Any vehicles used for business duties, including transporting supplies and residents, must be insured with commercial vehicle insurance. Individual auto policies typically do not cover personal vehicles used for business purposes in the event of business-related incidents.

5. Cybersecurity Claims

Modern-day facilities store resident, client, family, employee, and payment information on servers. A data breach can cause significant reputational damage and legal liabilities, including the expenses of potential legal fees and security enhancements.

Risk Management Strategies for Assisted Living Facility Operators

Mitigating the risk of these and other claims requires adaptable risk management strategies for modern facilities, including these essentials:

• Conducting regular safety audits
• Enforcing fall-prevention training programs
• Enacting infection control protocols
• Maintaining holistic medication management processes
• Training staff in abuse prevention and reporting procedures
• Setting clear plans for resident care
• Upholding relevant documentation and audit standards
• Positioning clear communication with families as a top priority
• Working with experienced insurance agents to personalize and review coverage

Local insurance services can help businesses with their risk-management strategy and identify any necessary adjustments to maintain comprehensive coverage against the most common types of insurance claims.

How Can Facility Operators Prepare for Risks?

At Pro Insurance Group, our team of agents helps assisted living facility operators recognize, prepare for, and recover from potentially costly claims. Our team is familiar with the industry-specific risks associated with facility operations, as well as state compliance requirements and legal procedures. We customize coverage plans for facilities of any size and risk level to make sure gaps in coverage never put their residents, properties, assets, employees, and reputations at unnecessary risk.
Contact our team today and schedule a consultation for guidance on preparing for the top insurance claims that assisted living facilities encounter.