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Senior Living Facilities Taking a Closer Look at D&O and Cyber Liability Insurance

Posted on: December 21, 2015 by Caitlin Morgan

Owners and investors of senior living facilities – from Continuing Care Retirement Communities (CCRCs) to skilled nursing care homes and assisted living – are increasingly viewing directors and officers exposures and data breach-related risks as top concerns. This has led to more insureds looking at coverage options and levels when reviewing the need for Directors & Officers (D&O) and Cyber Liability insurance, and shifting their mindset from a cost-reduction approach to a risk-protection strategy, according to survey findings in a report titled 2015 Management Liability Purchasing Trends for Senior Living Communities. The report compiled insurance-related statistical data from 353 communities that posted total combined assets of $7.8 billion, with 90% of them classified as non-profit corporations.

Some of the key findings for senior living D&O purchasing trends cited in the report include the following:

  • 32% of those insured in the report purchase $1 million shared limits for D&O and Employment Practices Liability Insurance (EPLI), while close to 33% purchase $5 million in shared limits for D&O and EPL. The asset size of the insured is the primary factor for purchasing higher limit.
  • 95% of the claims paid under the combo D&O/EPLI policy form are employment practice claims.
  • Amongst those insured with paid claims, the average claims total was $68,495 (defense and settlement).

In terms of Cyber Liability insurance, the report cited that more than half (56%) of the insured organizations surveyed purchased a policy limit of $1 million for data breach/cyber coverage, whereas 26% purchased the least at $500,000. Meanwhile, smaller shares of providers purchased substantially more for data breach protection, with 6% of organizations purchasing $2 million limits, 3% purchasing $3 million and 2% buying more than $5 million. The average paid data breach/cyber claim was $107,000, while the highest claim paid was $425,000.

The shift towards a risk-protection approach among senior living facilities is partly due to the rise in breaches involving medical records and the fallout that results from these compromises. The significant expenses involved in dealing with a breach, reputational damage and the increased exposure to directors and officers have insureds looking for risk-mitigation and protection. Caitlin Morgan is poised to help you provide the solutions these healthcare facilities require to get adequate protection.  From D&O insurance and EPLI to Professional Liability and Cyber Liability, we can help you offer a complete suite of management liability protection. Just give us a call at 877.226.1027.

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Posted in: blog Long-term care facility