Why Senior Living Facilities Need Professional Liability Insurance

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Introduction

In an industry as sensitive and service-oriented as healthcare, nursing homes are not immune to risks and liabilities. With the potential for severe financial and reputational repercussions, it is imperative for these facilities to secure robust professional liability insurance. This guide sheds light on why such insurance is non-negotiable for nursing homes.

The Growing Liabilities in Nursing Care

Recent studies, including a 2018 analysis by Aon Global Risk Consulting, highlight the escalating claims against nursing care facilities:

  • A 6% annual increase in the rate of loss per occupied bed
  • A predicted loss of $2,410 per occupied bed for 2019
  • A 3% annual increase in the total frequency of claims

These statistics underline the critical need for comprehensive insurance plans for nursing homes.

Key Insurance Policies for Nursing Homes

Medical Professional Liability

This insurance is essential for anyone in the medical profession, covering medical malpractice and other related liabilities.

Additional Essential Coverages

  • Commercial General Liability and Property
  • Hired and Non-owned Auto
  • Sexual Misconduct/Abuse Coverage

For nursing home administrators, Management Liability (D&O, EPL, Fiduciary), Employee Benefits, Employment Practices, and Worker’s Compensation are vital.

The Lifesaver: Professional Liability Insurance

Professional liability insurance, also known as Errors & Omissions (E&O) insurance, is tailored to the needs of nursing homes and assisted living facilities. It protects administrators and staff from professional liability when lawsuits regarding the quality of service are filed by residents.

Claims that this insurance may cover include:

  • Medical errors
  • Negligence
  • Non-delivery of promised care and services

In most scenarios, this insurance will cover legal defense costs and, if the facility is found liable, will pay for damages up to the policy’s limits.

The Real-World Impact: Why It Matters

In today’s litigious society, even the most dedicated and professional nursing homes can face claims from residents. The potential for costly fines, settlements, and litigation makes professional liability insurance an indispensable safety net for these institutions.

Conclusion: A Secure Future for Nursing Homes

With the unique challenges faced by the healthcare industry, particularly senior living facilities, professional liability insurance is not just an option—it is a necessity. It represents a long-term, viable solution, giving nursing homes control over costs and claims management, and peace of mind in a world of increasing risks and liabilities.

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