In the event of a lawsuit, your adult living facility will rely on its liability insurance coverage. However, many insurance providers are adding sub-limits on senior living facility coverage for common loss events. These lower limits mean you may lack the coverage you need in the event of litigation.
In insurance, a limit is the maximum amount your policy will pay. Sub-limits apply to specific loss types and are less than the policy’s primary limit. They occur in both property and liability policies.
For example, your commercial property insurance policy might have a $2 million aggregate limit but a $500,000 flood sub-limit. If you experience a loss from flooding, this policy wouldn’t pay more than $500,000 – even though your repair costs could be much greater.
In liability insurance, a policy sub-limit is sometimes assigned for punitive damages. However, some insurers in the adult living sector have also been adding sub-limits for claims alleging bedsores and elopements. Because sub-limits can drastically reduce how much your policy will pay, they deserve your attention.
When you’re insuring a building, you want your limit to be high enough to cover the replacement cost. When you’re insuring your business against lawsuits, determining how much coverage you need is less straightforward, and current trends are making this even more challenging.
Given these trends, many businesses realize they need as much liability coverage as possible.
When an assisted living facility is sued over allegations of neglect related to bedsores or elopement, the awards and settlements can be massive. In a recent case, a Florida jury awarded $12.5 million in damages in a lawsuit involving bedsores against an assisted living facility, according to Tampa Bay Times.
Facility risk managers may think they have enough coverage to handle such a lawsuit. However, if the insurer has introduced lower sub-limits, these facilities may end up shouldering a much larger portion of the costs than they expected.
Senior living facilities are navigating a tough business environment. Resident acuity is increasing as the population ages and staffing problems mean facilities don’t always have as many experienced employees as they need. As facilities take steps to provide a safe environment for residents, they also need to reassess their insurance.
Don’t wait until you’re hit with a lawsuit to find out whether you have enough coverage. Tangram provides insurance for adult residential care facilities through the Personal Care & Assisted Living Insurance Center (PCALIC).
Unlike many insurers, we offer policies without separate sub-limits on senior living facility coverage for bedsores and elopements. Learn more.
Article provided by Tangram Insurance Services