For Care Facilities, Commercial Liability Insurance are usually compose of three types of liability coverage: (General Liability, Professional Liability, and Physical Abuse/Sexual Molestation Liability)
Commercial liability composes of 4 main points:
Professional Liability provides coverage for you and your caregivers against 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.
Physical Abuse Coverage provides coverage against physical abuse including 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 the liability coverage: general, professional, and abuse/molestation coverage because your operation is at risk when dealing with residents. Of all the listed liability coverage, 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.
Adult Day Care (ADC) / Adult Health Day Care
Adult Residential Care Facility (ARF)
Assisted Living Facility
Group Home / Small Family Home
Home Care Organization / Home Health Agency
Independent Living Facility (ILF)
Intermediate Care Facility (ICF)
Residential Care Facility for the Elderly (RCFE)
Liability + Property + Auto + Umbrella
Employment Practice Liability
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Insurance carriers are all different. Here a few differences on liability insurance carriers, forms, limits, and definitions:
When comparing insurance insurers and policies, make sure you understand the difference among: Admitted Insurance Carrier, Non-Admitted Insurance Carrier and Risk Retention Group. All three types of insurance carrier/groups are approved to conduct business of insurance in any states, but state laws and regulations apply differently.
Insurance companies financial rating are usually reported by A.M. Best Company. This company provides a rating similar to academics; A++ as the best and F is the worst. Please note not all admitted insurance carriers are rated A++ and not all non-admitted insurance carriers are rated below A++. Rate letters are based on A.M. Best Company’s criteria on an insurance carrier’s history, financial stability, and contract obligations. Each “letter” assigned can change over the course of time as their financial situation changes. An insurance carrier can move up for better financial reporting and move down for below financial reporting.
Each insurer (Admitted, Non-Admitted, RRG) has a purpose to provide insurance in the marketplace. Each insurer has its own pros and cons regarding how insurance is served. By understand each insurer and how it could apply to your situation, you can evaluate which insurer is best for you. At Protégé, we understand that each client varies regarding the insured’s business goals, financial obligations, coverage and insurance requirements. Our recommendation on insurer and policy will depend on you and your facility needs.
There are two types of insurance polices: Claims-Made and Occurrence Forms.
Insurance carriers created both claims-made and occurrence form to provide flexibility in premium, cost, and options for the insured. For the insured, you must be aware of the difference between the two types of policies. To have continuous coverage on claims-made, the policy needs to have a "retroactive date" (date stated on the policy when coverage begins). Occurrence Form will always give you longer protection since a claim can be filed after the policy expires. Given the longevity of filing a claim, majority of care facility owners favor occurrence over claims-made policy.
If you plan to switch polices to another insurance carrier, you need to consider either Prior Acts Coverage or Extended Reporting Period.
Can add Prior Acts Coverage to the new claims-made or occurrence form to provide coverage back to designated "prior date". If you have a prior acts coverage of 1/1/2011 on above policy period of 1/1/2014 to 1/1/2015, then you could file a claim on new claims-made or occurrence form back to 1/1/2011.
Helps to extend the current claims-made coverage beyond its expiration date on the new policy. For the above policy period 1/1/2014 to 1/1/2015, coverage would continue beyond 1/1/2015 expiration date; thus allowing a claim to file on the old claims-made policy.
To verify policy limits, you should review the commercial liability insurance policy's Declaration Pages (Dec Pages) to summarize the coverage and its limits. However, please be aware that Declaration Pages may be similar among insurance carriers, but their limits, coverage and definitions could be different. An insurance coverage form from an admitted line, non-admitted line or risk retention group could be completely different based on the supporting ISO Forms, Endorsements, and Exclusions on the policy.
To differentiate one insurance carrier from another, most insurance carriers will add endorsements and exclusions to the standardized ISO forms. By doing so, an insurance carrier can broaden its coverage term, policy limits, and definition of a loss to enhance more coverage. Conversely, an insurance carrier can narrow its coverage term, policy limits, and definition of a loss to reduce potential claims. This is why not all insurance carriers and insurance policies are the same. As a consumer, you need to be aware the insurance policy you are purchasing.
Insurance carriers can define their claim and legal expense as inside or outside the liability coverage limits:
If claim and legal expenses are inside the liability coverage limits, then the legal fees and insurance expenses of the claim will reduce the policy limit. For instance, you have legal fees and insurance expenses of $100,000, it will reduce the total liability coverage limit of $1 million coverage to $900,000.
Claim and legal expenses are separated from the policy limit. For Instance, a $1 million liability limit will remain the same regardless of what claim and legal expenses are.
Depending how the policy is designed on claims and legal expenses, the overall insurance premium is affected. Policies that include claims and legal expenses outside the coverage limit tend to be higher than premium comparing to policies that include claims and legal expenses within the coverage limit.
The landscape of insurance carriers, insurance coverage, policy limits and servicing can be overwhelming for any facility owners looking for the appropriate insurance for their facility. Each insurance carrier has its history of financial rating, leveraging technology, processing claims, assisting in customer service and providing educational materials. At Protégé Insurance Brokers, we have done extensive research on our insurance carriers and coverage to only recommend you the most appropriate insurance for your situation.
Since we work closely with each one of our insurance carriers to understand their policy coverage, limits, terms, definition, endorsements and exclusions, we become your eyes and ears on insurance matters. This attention-to-details has helped us to compare and contrast one insurance carrier to another insurance carrier. Whether you are purchasing commercial liability insurance for the very first time or comparing insurance at renewals, we can assist you in making those decisions easier. Our years in practice will reduce your time in shopping for commercial liability insurance, help feel at ease, and let you focus on running your care facility more securely.
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Other insurance to consider for your facility.