An unsettling truth about group home and assisted living facilities
A lot of people don’t know this, but there are only a handful of states in the entire country that require assisted living facilities and group homes to carry liability insurance as part of the licensing process. Now, the caveat to that is if they have a Medicaid contract, typically they are going to be required to carry insurance, but most of the facilities that a placement agent works with are private pay facilities that are not subject to the Medicaid requirements.
What impact can that have on your placement agency?
Now, why is that a big deal? A lot of the facilities, in fact a shocking number, don’t have insurance at all. I would say about 50% of the facility and group home owners that come to us for insurance quotes have never carried it before. What does that mean for you as a placement agent? Unfortunately if you place a client into an uninsured facility and they get injured, your business may be on the hook for the claim. You never want to be stuck footing the bill for somebody else’s negligence.
How to protect your placement agency
At this point we know two things; first, a large portion of facilities don’t carry insurance at all. Second, you could be dragged into a lawsuit because of that. So what do you do to protect yourself? It’s actually a pretty straightforward and easy process. Doing these two things can dramatically reduce your risk:
- Build into your research and contracting process that you ask for their certificate of insurance. By doing so, you can show the families that you’re working with, that all the facilities you recommend carry active liability insurance.
- Ask for an updated certificate of insurance from them every year. Since insurance policies renew every 12 months, you’ll need to update your files annually as well.
Reviewing their certificate
So, since you’re not an insurance expert, how do you verify that they have adequate insurance limits? Well, it’s actually pretty easy. The simplest route is to take your insurance certificate that we provide you after writing a policy and you line it up right next to the insurance certificate that the facility gives you. The coverages should look almost identical.
You’ll see a couple of key coverages listed on the facility’s insurance certificate. One of them being general liability, you want to see at least $1,000,000 per incident and $2,000,000 aggregate limits.
You also want to see professional liability, which will be listed down towards the bottom of the certificate. The professional liability limits should also be $1,000,000 per incident and $2,000,000 aggregate limits.
Some facility certificates will also list out the sexual abuse and molestation coverage. Ideally, we want to see at least $100,000 per incident and $300,000 total for the abuse and molestation coverage. Additionally, you may see things like hired and non-owned auto, employment practices liability, employee benefits liability, etc.
One of the most important coverages is going to be the professional liability because that’s what picks up their care of the residents. I would never recommend placing into a facility that can’t provide you with a certificate listing that specific coverage. If something goes South and the facility doesn’t have insurance, the placement agent tends to be one of the first people on the hook that gets sued. So, be careful out there and always verify that your facility and group home partners carry proper insurance coverage.
If you have any questions at all, or if any of this is unclear, feel free to reach out to us directly. We love coaching people and we are passionate about the senior placement insurance industry.