When it comes to caring for residents in an adult residential care facility, most administrators will say some days go as planned and some don’t. It is nearly impossible to predict every misstep that might occur. The best thing any adult residential care facility can do is to implement procedures to minimize risk and make sure they have a good insurance plan in place in the event of a claim or lawsuit.

In some cases, the unexpected events are ultimately out of anybody’s control like hurricanes and tornadoes or they can cause devastating damage like fires. In these cases, adult residential care facilities can find themselves without a building or unable to access what is left of the building, forcing them to find an alternative way to care for the residents. If the right insurance is in place, what happens after an unplanned event is easier than if they do not have the proper coverage.

Commercial Property Insurance

One of the most important types of insurance adult residential care facilities should have is commercial property insurance. Traditionally, property insurance is known to cover the building, its contents, and other outside structures in the event they are damaged or destroyed by an unplanned event like a storm or fire. There are also additional coverages that can be added onto commercial property policies known as loss of business income and extra expense or business interruption insurance.

What is Loss of Business Income & Extra Expense?

Loss of business income insurance pays the owner lost income if the adult residential care facility has to close after a covered event. The insurance company pays the revenue that the facility would have earned based on financial records had the closure not happened. It also includes coverage for ongoing business expenses such as rent or utilities where payment is still required even though the property cannot be used.

Extra expense coverage pays the costs of continuing to provide care for residents at another location during the building closure. This can include rental fees and utility costs for a temporary location. These expenses are considered over and above ordinary operating expenses and would not have occurred if the covered event hadn’t happened.

Benefits

Being able to continue providing care for residents is vital because they require assistance with daily living. Without these coverages, residents have to be relocated to other adult residential care facilities. While some can handle the change, others may be impacted significantly. There is also no guarantee that they will be placed in a care facility that suits their needs depending on the area.

If you are ready to add loss of business income and extra expense to your commercial property insurance policy, contact the professionals at Personal Care & Assisted Living Insurance Center (PCALIC, LLC) today.