Mitigating the Four Leading Risks for Senior Living Facilities

If you run an assisted living, skilled nursing care, or other senior living facility, the nature of your operations creates significant challenges and exposures. Whenever you serve a vulnerable, protected population, both your assets and your employees are subject to unique risks.

By understanding the top exposures for senior living facilities, you can take steps to mitigate your risk and protect both your staff members and your company assets.

Workers’ Compensation Claims

Any employee at your facility could be injured on the job, requiring medical treatment that might take them out of work for some period. Staff members who provide direct care could experience a sprain while lifting a resident, they could be assaulted by a patient with dementia, or they could contract an infectious disease through patient contact. Improper use of a Hoyer lift is a common cause of injury, and it happens even when employees receive proper training.

Your kitchen staff is at risk for burns and cuts, while housekeeping staff often experience carpal tunnel syndrome from performing repetitive tasks. Any employee could slip or fall on the premises, and those who work overnight shifts are susceptible to fatigue and at higher risk of an accident.

Workers’ compensation insurance protects your employees and your organization when incidents like these occur, covering the cost of medical treatment, ongoing therapy or other care, and lost wages, among other expenses. Though most policies are standard across states, your premium will depend on the type of work your employees engage in and your loss experience, as measured by the number of claims per year.

Your insurer and independent insurance advisor can recommend training and other measures to prevent losses and improve your rating modification. Your advisor will also inform you of any common policy exclusions. For example, the insurer is not likely to cover the claim if the employee was under the influence of alcohol or drugs at the time of the incident.

General Liability (GL) / Professional Liability Risk

In our litigious society, it’s more likely than ever that your senior living facility could be hit with a lawsuit that falls under either professional liability or general liability.

For a senior living facility, professional liability involves claims related to the care you provide to residents, including allegations of negligence, mistreatment, or abuse. Common allegations include failing to avoid bedsores through proper positioning, inattention that leads to a fall, medication errors (including incorrect dosage), delays in providing medical attention, and inaccurate response to a medical issue. Facilities that provide memory care also face the risk of a dementia patient circumventing the building’s security features and wandering outside unattended.

General liability involves claims related to incidents that happen on your premises, whether or not they involve a resident. For example, a visitor might sustain injuries after slipping in your lobby, a contractor could cause property damage in the course of making repairs or renovations, or an employee could get into a physical altercation with another staff member, resident, or visitor, resulting in bodily injuries.

Since professional liability and general liability can overlap in some instances, it’s best to purchase a package that combines the two coverages for a comprehensive solution that helps fill potential gaps. A well-designed liability package will help protect your facility against such claims and the resulting financial losses, including medical payments, a jury award, or a settlement. These policies also provide coverage for your legal defense costs in the event of a lawsuit.

Commercial Vehicle Incidents

Any senior living facility that maintains its own vehicles could be involved in an auto crash that causes damage, injuries, or fatalities. Whenever you take a resident off premises—whether for a scheduled doctor’s appointment, to the ER for a medical emergency, or for a social outing, for example—you are at risk of an accident. Your staff might also use company vehicles to run errands for the facility or at the request of a resident.

Just as you would properly insure your personal car, a senior living facility needs to protect both company-owned vehicles and drivers with sufficient insurance. A commercial auto policy will cover property damage to your vehicle as well as any third-party vehicles involved in the crash and provide some level of liability coverage.

Since senior living facilities experience high turnover, it’s advisable to choose a policy that expressly covers all drivers as opposed to a list of authorized drivers. The former option is more expensive, since it doesn’t rate individual drivers based on their motor vehicle records. However, it avoids a situation where the insurer denies the claim because an unauthorized driver was behind the wheel at the time of the accident. Most insurers offer driver safety training to help prevent losses, and some provide telematics that monitor driver activity to enhance safety.

One common commercial auto exclusion to watch out for is transportation of someone other than a staff member or resident, such as a family member. These incidents might be covered under your GL policy instead

Cyberattacks

Senior living facilities are especially susceptible to cyberattacks because they maintain resident medical data, social security numbers, and banking information. A ransomware attack would render large volumes of data unusable, crippling your operations, while a cyber breach could expose protected health information (PHI) or personal financial information, resulting in identity theft, financial loss, and fines.

Even with proper training, employees can fall victim to phishing attempts or social engineering, exposing personally identifiable information or financial data. And creative hackers can find a way around many cybersecurity measures.

These realities make proper cyber insurance a must for any senior living facility. While the specifics vary across insurers, a cyber policy typically covers forensic investigations, ransom payments, regulatory fines, required notifications, legal fees, and other costs triggered by the incident.

However, simply purchasing a robust cyber policy isn’t enough to protect your senior living facility from loss. If the insurer determines that you didn’t take adequate steps to protect your software, network, and other IT components, they could deny the claim. The same holds true if an employee engages in behavior that exposes your system or data to a hacker, and it turns out that staff member failed to complete your company’s required cyber training.

In addition to these must-have coverages, your senior living facility needs the following to reduce the risks inherent in your operations:

• A crime policy to protect against funds misappropriation and theft of residents’ property
• Property insurance tailored to your location and facility type, which must include business interruption to limit losses
• Employment practices insurance, which is increasingly vital to protect against discrimination, wrongful termination, and harassment claims
• Directors and officers (D&O) coverage, insuring both your organization and those individuals against allegations of wrongdoing involving care plans and other decisions affecting residents

Turn to B. F. Saul for Senior Living Coverage

The commercial insurance specialists at B. F. Saul Insurance bring decades of experience helping senior living facilities reduce risk and protect assets with proper coverage. Our account teams and claim experts have worked with senior living facilities of all types, including assisted living, skilled nursing care, and other organizations.

We help senior living organizations identify the most likely exposures and obtain customized insurance solutions that mitigate risk. Our team also recommends strategies to prevent losses and reduce the likelihood of claims.

Contact B. F. Saul Insurance to discuss your senior living facility operations and learn how we can help reduce your exposure to an insurance claim or liability lawsuit.