Assisted Living Facility (ALF) Insurance
Primitive models of assisted living have been around for hundreds of years in the form of almshouses which served any folks who were considered on the fringe of society. The model evolved as some residents were parceled out to orphanages and asylums, leaving elderly people as the predominant residents in these institutions. In the late 1800s the nursing home model started to materialize but it wasn’t until around 1980 when the phenomenon of the residential assisted living emerged[1]. Over the last forty years, we have seen an unprecedented boom in the number and types of ALFs. With over 75 million baby boomers due to retire in the next twenty years and the average ALF charging residents between fifty and a hundred thousand dollars per year, we can expect the upward trajectory of the assisted living industry expansion to continue. [2]
What is ALF insurance?
Assisted living facility insurance is a combination of liability and property policies which cover a diverse range of elderly care service businesses. All of them come with definite risk simply due to the high concentration of fragile folks on site. The more amenities you choose to offer, the greater your potential liability becomes. Consider the following variations of ALFs and the different services they offer:
- Adult (residential) day care centers
- Adult family/foster/care homes
- Assisted living facilities/homes
- Companion care
- Continuing care residential homes
- Continuing care retirement facilities
What are the potential liabilities of owning an assisted living facility?
Owning an ALF is a noble commitment offering people in their twilight years a chance to maintain independence while receiving some help with daily living needs. Serving as landlord, caretaker, entertainer and chauffeur – these facilities are fraught with potential for catastrophe. The obvious risks include accidents arising from the clients’ delicate constitution and general business or property liability issues, but actually the liabilities associated with the staff represent the biggest concern.
As we have seen in the news, a few bad eggs have tarnished this industry causing it to become one of the fastest growing areas of healthcare litigation in the US.[3] Depending on what clients your facility caters to, you could be providing just housing or your staff may need to assist with basic daily tasks (bathing, dressing, eating, etc.). The wrong kind or amount of a medication dispensed or providing inadequate care could result in serious injury or death. Accusations of sexual abuse, neglect, assault and battery have become so frequent that misconduct coverage is essential. AND you also have to consider the potential for employee theft, mishaps involving the staff beautician and volunteers or even an accident in the company van on a field trip.
Assisted living facilities cater to a vulnerable population and the catastrophe that could result from fire or harsh weather becomes exponentially greater. If you’re not prepared with a disaster plan (evacuation plan, transportation, back up medication, shelter, family communication) then you are setting yourself up for catastrophe and insurmountable culpability.
What kind of liability coverage should I consider for my assisted living facility?
The kind of liability coverage you will need for your ASF will vary depending on the services you offer and the type of clients residing at your facility. Below is a comprehensive list of liability coverages you will want to discuss with your insurance agent:
- General and professional liability
- Employee violation of residents’ rights
- Tenants liability
- Cyber liability for clients
- Auto insurance for passenger van
- Business interruption
- Spoilage coverage for refrigerated prescriptions
- Faculty barber and beautician
- Director and officer liability
- Medical expense
- Crime and theft
- Workers comp
- Relocation expense
- Employment practices
- Defense costs
- Punitive damage coverage
What kind of property coverage should I consider for my assisted living facility?
Property coverage will also vary with the type of assisted living facility. Ask your agent if you need any of the following:
- Commercial property
- Earthquake and flood
- Damage to property
- Business interruption
- Replacement cost based on agreed value
- Blanket building and contents
- Tenant contents
- Boiler/generator/machinery
How much does assisted living facility insurance cost?
When you call in for a quote, your agent will review the specifics of your facility to help find the best cost for you. Some of the factors that will affect your rates include:
- Years in operation
- Number of residents
- Previous claims
- State licensing status
- If medical care is provided by staff
- If risk management engages staff in continual training and education
- If doors are monitored/alarmed for dementia patients
- If there are pull alarms in the bathrooms
- How ambulatory the clients are
Get the coverage you need.
Here at Daigle & Travers Insurance, we will provide you with the right coverage to make sure your investments are safe during a disaster. When partnering with us, we will give you all the necessary information and options you need to make the best choice of insurance company and policy. Give us a call today at (203)-655-6974.
Notes:
[1] (History n.d.) http://www.4fate.org/history
[2] (Pollard and Scommeegna 2014) www.prb.org/Publications/Articles
[3] (Stevenson and Studdert n.d.) http://content.healthaffairs.org/content/
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