Professional Liability Insurance for Nursing Homes and Assisted Living Facilities
Professional Liability insurance or Errors & Omissions (E&O) is one of the most important coverages for nursing homes and assisted living facilities to secure. This coverage is similar to what a malpractice policy is for a physician, covering the nursing home and its care givers’ professional liabilities in the event there is a lawsuit over the quality of service provided to residents. Typical claims include allegations of medical errors, negligence and non-delivery of care that was promised. A family, for example, can claim that the facility’s care (prescribing the wrong medications, misdiagnosis) led to the premature death of a resident. Professional Liability insurance will pay for the legal defense and any damages up to the policy limit should the nursing home or assisted living facility be found liable.
Professional Liability policies can be written on a claims-made or occurrence basis. Under a claims-made policy, coverage is provided for claims made against the policyholder and reported to the insurance company while the policy remains in force and during any applicable extended reporting period. As long as the policyholder has maintained continuous coverage, the company underwriting the policy at the time the incident is reported would be responsible for paying any covered claims. An occurrence policy provides coverage for an injury or damage that takes place during the policy period, regardless of when the claim is reported – up to the limits of the policy in force at the time of the incident that led to the claim. The company underwriting the policy at the time of the incident would be responsible for paying any covered claims.
With a claims-made policy, which is typical today for professional liability policies, there are two options an insured should consider and discuss with you. The first option is the Extended Reporting Period Endorsement, which allows the insured to report a claim to the prior insurance company after the policy has ended. It provides protection for covered claims that arise out of incidents that occurred during the policy period, up to the date the policy ended. An additional premium for this coverage typically applies with some carriers offering the endorsement at no extra cost if the insured meets certain special policy conditions.
The second option, Priors Acts Coverage, protects insureds who had claims-made coverage immediately prior to the current policy period, but with a different insurance company – and who did not purchase an Extended Reporting Period Endorsement from that company when the policy ended. Prior Acts Coverage protects against claims arising out of incidents that happened before the inception or effective date of a new policy. Again, some carriers may charge an additional premium for this coverage.
We specialize in insuring nursing homes and assisted living facilities, providing Liability, Professional Liability, Excess, Property, Physical & Sexual Abuse, D&O, Employment Practices and Automobile, among many other coverages. We can review the breadth and depth of coverage and options available to you, including what endorsements are available when it comes to Professional Liability, so that your clients have the right program in place. Give the professionals at 877.226.1027 Caitlin Morgan a call to discuss our nursing home and assisted living program.