Commercial General Liability Insurance for Care Facility

As a facility operator, you definitely want to have the proper liability coverage to protect the business when dealing with residents, patients, and staff members. Since you are caring for residents, you want to make sure your liability coverage is broad in definition, coverage, and high in policy limits. In case of a liability lawsuit, your liability insurance could provide the protection needed to defend against claims.

Define Commercial General Liability Insurance

Commercial General Liability (also known general liability) protects a business against liability claims from bodily injury and property damage arising out of premises. It can also cover claims of false or misleading advertising, including libel, slander, and copyright infringement. It also covers the cost of your legal defense and any settlement or award should you be successfully sued. Typically these include compensatory damages, nonmonetary losses suffered by the injured party, and punitive damages.

Commercial Liability Insurance Components for Care Facilities

For Care Facilities, Commercial Liability Insurance is usually composed of three types of liability coverages: (General Liability, Professional Liability, and Physical Abuse/Sexual Molestation Liability)

I. Commercial General Liability

Commercial general liability composes of 4 main parts:

  • General Liability – protects your business against liability claims from bodily injury and property damage arising out of premises.
  • Personal & Advertising Liability – provides coverage for an accusation of slander and libel of someone else or business while advertising liability provides coverage for inadvertent mislead or false advertisement.
  • Each Occurrence Limit – the maximum amount of liability coverage per incident.
  • General Aggregate Limit – the maximum amount of liability coverage for multiple claims within the policy period.

II. Professional Liability

Professional Liability provides coverage for you and your caregivers against the act, negligence, error or omission due to giving or failure to give proper professional services to your residents or clients. This may include counseling, disbursement of foods, medications or professional care.

III. Physical Abuse/Sexual Molestation Liability

Physical Abuse Coverage provides coverage against physical abuse including an alleged act, error and omission, and misconduct of abuse. Sexual Molestation coverage is similar to physical abuse as it relates to sexual or non-sexual alleged act, act or misconduct of abuse to the residents or clients.

As a facility operator, you definitely want to have all liability coverages pertaining to a facility: general, professional, and abuse/molestation. Of all the listed liability coverages, the two most frequent liability claims on care facilities are professional liability and abuse/molestation claims. Since you are caring for residents, you want to make sure your liability coverage is broad in definition, coverage, and high policy limits.

Insurance carriers that specialize in care facilities (ARF, RCFE, HHA & similar facilities) would normally include all three types of liability coverages in the policy. Since these insurance carriers understand that the liability coverages could be overlapped, the insurance carriers preferred to have the coverages included in the policy. If an insurance carrier is not specialized in care facilities, it could provide coverage as a monoline coverage. This separates the general liability, professional and abuse coverages on its limits and definitions. This type of underwriting will likely increase the premium and could have a gap in coverages, definitions, and limits. It is very important that you review your coverages to meet the needs of the risk exposed.

Related Commercial Liability Articles:
  • Commercial Liability Insurance: Coverage, Definitions, and Forms (Part 2 of 3)
  • Which commercial liability insurance carrier or policy is good for my facility? (Part 3 of 3)