Insurance for Nursing Home Operators
Lots of nursing homes are popping up. All over the place, care facilities spring up like flowers. They’ve become so common now. It’s hard to miss them. You can’t avoid them in many states. There’s good reason for it too. The Baby Boomer generation is retiring. More and more people need long-term care.
Yet, with this influx, problems emerge too. Residents trip. Staff mess up. Visitors get into fights. If you operate a nursing home, all of this and more can expose you to liability. We want to talk about how you can insure against that now. It’ll illustrate how you can protect your nursing home business. You’re company might capsize if you don’t.
- Runaway Juries and Nursing Home Bankruptcies
- Why do Operators Need Nursing Home Insurance?
- Do States Require Nursing Homes to Carry Insurance?
- Trends in Insurance and Nursing Homes
- How do I Get Insurance for My Nursing Home?
- Nursing Home Insurance Resources
Skim the headlines. Just a glimpse reviews the dangers of running nursing homes. Each day, operators face serious amounts of liability. The risks are endless-too many to count. One slip up and you could be in court. Sympathetic juries award families hundreds of millions every year. They care not for the heavy burden of caring for the sick and old. Any case or complaint could mean your facility is bankrupt and broken. You might try and wrangle in state governments, but plaintiffs’ attorneys have them in their back pocket. Let’s review the specific need for nursing home operator insurance.Why do Operators Need Nursing Home Insurance?
Counting all the reasons for nursing home insurance can be like counting the grains of sand on a beach. The reasons are infinite. However, we can summarize some of the most common motivations for a policy. They relate to company practice, employee misconduct, and outside forces.
Company Practice. Admin and corporate workers can expose your home to lots of liability. They’re the ones that set policy and make procedures. They also recruit, hire, train, and screen staff. If they don’t do this properly, your home will be on the hook. You need to make sure that your nursing home’s practices are in line with the law. The corporate operations of a nursing home set the tone and foundation for the business. Their success is critical to ensure your liability does not increase. If it does, you might want insurance.
Employee Misconduct. Employees interact with residents all day long. At every moment, they have the ability to injure those living there. Physical, mental, sexual, and other forms of abuse aren’t uncommon at nursing homes. When this happens, residents sue. Residents will join nursing homes in addition to workers in their suits. They do this on the claim of respondeat superior. This means that the employer is liable for the misconduct of its workers while they were acting in the course of employment. Sure, you can argue whether all the preconditions exist for this cause. Yet, if you’re already in court, that’s a bad sign. Insurance can mitigate the damage of employee misconduct.
Outside Forces. Nursing homes see lots of different people. Vendors, visitors, medical providers all travel through its doors. As they do, they might get into scuffles with residents. The resident can take issue with the nursing home if this happens. Their suit normally suggests the home had a duty to preserve a safe environment for the person. It should have prevented falls, abuse, health care errors, etc. This is hard for the nursing home to argue against. They normally end up settling. Yet, if your home has insurance, you can limit some of these costs.
You might have other motivations to get insurance. These items merely start the conversation why your nursing home should consider it. To find out whether or not you should, consult expert counsel.Do States Require Nursing Homes to Carry Insurance?
Most nursing home requirements relate to the people running it, not to the home itself. For instance, administrators and nurses must have certain amounts of experience and education. Many states leave the question of facility insurance to the home itself. This puts you in an interesting situation. Should you save the money or get the protection? We outlined above the risks inherent in operating a home. Ultimately, you should sit down with counsel and evaluate the following concerns.
- The likelihood of controversy.
- The risk of lawsuit and size of claim.
- The cost of insurance.
- The cost of paying out claims without coverage.
This should start your process. Your analysis in the end should factor in considerations specific to your business. Then, you’ll be able to answer whether or not you need insurance. Also, you can estimate how much and what kind of insurance your nursing home demands.Trends in Insurance and Nursing Homes
The trend of nursing home insurance mirrors that of nursing home litigation. Over the last two decades, most states have seen an explosion in lawsuits. They arise for all sorts of reasons. Residents get into fights with each other. Staff abuse residents. Doctors mistreat residents. The list is endless. The risks are innumerable.
For these reasons, many insurance companies have gotten out of the market. Also, the nursing home industry itself has consolidated significantly. Most homes are run by a few conglomerates. This means they are largely left to their own devices for insurance. It’s not surprising then that rates have skyrockets. Just in the last few years they have gone up over thirty percent in some states. It can be nearly $5,000 to insure just one bed.
Some states have stepped in to reduce the burden that homes shoulder. They’ve limited their legal liability. Legislatures in several states set caps on tort damages and other kinds of compensation plaintiffs may seek. Yet, the risks remain. The pitfalls are numerous. This is reflected in the ever-increasing insurance rates homes obtain. Here are some important takeaways that explain this dramatic rise in nursing home insurance.
- High rate of litigation.
- Large size in plaintiff recoveries.
- Consolidation of nursing home market.
- Decrease in nursing home insurance providers.
- Increase in nursing home regulation.
- Increase in nursing home population.
- Lack of increase in nursing home workforce.
You can obtain insurance for your nursing home the same way you get it for other policies. You apply to a carrier. You’ll submit your reasons and documentations for coverage. Then, it will offer a policy with premium and coverage limits. Like always, you should apply to more than one company to get the best offer. For nursing homes, here are some things for which you can obtain coverage.
General. This insurance covers the general liability your business might accrue in operations. It has a vast array but normally includes tort, contract, personal injury, and slander.
Property. This insurance applies to your buildings and tools. In the course of business, they can become damaged or destroyed. This policy will help repay and replace them.
Workers’ Comp. Most states require this. Worker’s comp insurance applies to worker injuries. It affords them lost income and medical bill subsidies for on-the-job harms. Workers’ comp systems usually replace and void the ability of employees to sue employers.
Management/Admin. This policy helps upper-level workers at nursing homes. It insures against risk of daily and supervisory oversight. It also covers the entity itself in some instances.
Umbrella/Extra. Sometimes your specific policy won’t be enough. In that case, it can be helpful to have umbrella coverage. This category applies for that circumstances. It protects when you face large judgments.
What policies your home needs depend on the nature of its operations. Remember, in some cases, you might have claims that demand more than the policy affords. In this case, you’ll have to find some other way to pay for them. Speak with experienced professionals to determine what coverage is best for your nursing home.Nursing Home Insurance Resources
- Great resource on nursing home licensure/insurance requirements.
- Good article on the pressures of nursing homes when it comes to insurance.
- Article on how nursing homes are getting into the insurance business.
- Case study on nursing home insurance by the U.S. Department of Health and Human Services.
Learn more about how to better operate your nursing home! Read these pages.
- Nursing Home Financing Guide
- Nursing Home Employee Safety Guide
- Nursing Home Staffing Guide
- Nursing Home Marketing Guide
- Nursing Home Regulation Guide