A 90-year-old mother tragically passed away in the days following Hurricane Irma’s landfall in Florida last summer. According to a wrongful death lawsuit filed against an assisted living facility last week, her son states the facility failed to provide a safe and comfortable living environment—claiming its air conditioning and other mechanical systems failed after the storm hit and the facility had no plan in place to protect its residents.
The facility, Savannah Court of the Palm Beaches, is one of several senior living or nursing home facilities that have faced lawsuits in the aftermath of Irma. The Rehabilitation Center at Hollywood Hills was named along with Florida Power & Light in lawsuits accusing administrators and staff of failing to evacuate residents once the facility’s air conditioning failed. Eight people died there.
Tragedies such as these illustrate why owners of senior living facilities need the protection afforded by a Senior Living Facilities policy. Senior Living Facilities policies cover the outcome of accidents or negligence onsite, such as resident injury, illness or property damage. These policies package Professional Liability and General Liability (GL) coverage together to avoid gaps. Often the lines get blurred as to whether a claim was a result of professional error or something that was addressed under a GL policy, so it is ideal to package them together.
Various Sublimits & Endorsements Provide Additional Coverage
The 2017 arrival of Hurricane Irma had been anticipated for days, so both Savannah Court and The Rehabilitation Center at Hollywood Hills would have benefited from an Evacuation Endorsement.
An Evacuation Endorsement can help manage a situation when a facility needs to move residents because of an incident, such as a pending hurricane, power outage or fire that can jeopardize the safety of the residents and causes significant damage to the facility, said Dana Kocen, Broker, Burns & Wilcox. The policy generally provides sublimits for evacuation expenses that often cover up to $25,000 in out-of-pocket costs ranging from transporting residents in the wake of a facility evacuation, housing them in a sister facility or hotel, or feeding residents, she added.
“It generally relates to imminent danger from an external event and provides some clarity in what the facility should be doing to protect and respond to their residents in a timely manner,” Kocen said. “However the facility must also do its part and have a formal evacuation plan in place during times of emergency.” Kocen said she believes having such coverage in place could have encouraged either of the Florida facilities to evacuate its residents before Irma made landfall. The evacuation coverage within the policy form with most carriers could have helped plan for a more orderly evacuation of residents at several senior facilities around Houston when Hurricane Harvey hit in 2017.
Other common endorsements tied to a Senior Living Facilities policy include an Elopement Endorsement, which offers protection in case a resident is not properly supervised according to facility protocols. This Elopement Endorsement could cover the costs of an injury to a resident suffering from dementia while he or she is outside the facility’s grounds, for instance. An Abuse and Molestation Endorsement also offers protection for these senior facilities in the event of an alleged abuse.
A variety of additional endorsements can also be elected to cover other exposures senior living facilities have, such as Hired and Non-owned Auto (HNOA) coverage which can be endorsed to the GL policy for coverage when staff uses their own vehicles to transport residents to a doctors’ appointment for example. Policies can also cover cyber and privacy issues, employee benefits and legal costs related to a claim. An experienced agent who works with a senior living facility can advise the organization on risk management policies and procedures for staff.
“Beyond insurance enhancements, many policies offer complementary risk management services for their policy holders. These services are often very robust, providing resources for establishing sound facility protocols, safety procedures, staff training and disaster preparedness in the event of a potential crisis. Many facility owners find these services invaluable,” said Nicole Greene, Associate Vice President, Professional and Executive Liability Center of Excellence, Burns & Wilcox, Corporate Headquarters.
Risk Management Preparedness
The lack of working air conditioning and elevators were cited at Savannah Court of the Palm Beaches and The Rehabilitation Center at Hollywood Hills in the lawsuits. In both cases, risk management policies and procedures either were not followed or were never in place, said Greene.
To accompany a Senior Living Facilities policy, most insurance carriers offer resources that can help facilities develop policies and procedures that include a room-to-room checklist, backup generator, medication tracking, the establishment of residential evacuation points and transfer agreements with other facilities in the case of an emergency.
“There is an abundance of resources available to policy holders. Risk managers and facility owners should familiarize themselves with these tools. Emergency preparedness pre-checklists and training classes, such as disaster readiness training, are often included in these complementary resources,” Greene said. “If your facility doesn’t have a risk manager overseeing policies, your carrier’s risk management resource can provide a second pair of eyes that can help create and refine guidelines.”
The Florida legislature responded following the hurricane by enacting new state laws requiring nursing care facilities meet new backup power rules.
Senior living facilities are growing in numbers – and so are jury verdicts
The number of assisted living facilities and nursing homes continues to grow. According to Forbes, at least 30,000 assisted living and residential care homes for seniors and roughly 15,000 nursing homes are operating in the U.S; more than 800,000 people live in residential care facilities and around 1 million live in nursing homes. More than 425,000 Canadian residents lived in nursing homes or senior residences in 2016, according to Statistics Canada.
Senior living facilities are often a target for lawsuits, Kocen said. A class-action lawsuit was filed against Brookdale Senior Living in August that claimed the nation’s largest assisted living provider does not follow some federal disabilities laws, and that it fails to adhere to multiple California statutes, including some related to unfair business practices and financial abuse of elders. The lawsuit claimed Brookdale facilities often left residents unsupervised, which led to serious injury and death.
Jury awards can be in the millions of dollars. A California jury awarded $23 million in punitive damages against Emeritus in 2013 for elder abuse and neglect of an 81-year-old patient who died at one of the company’s facilities.
“In Florida and other areas around the country juries tend to favor the plaintiffs over the senior living facilities and sometimes the jury decisions and awards will reflect that,” Kocen said.
Costs have trended low
Most Senior Living Facilities policies provide up to $1 million in coverage per occurrence and $3 million aggregate, although options vary from one carrier to another, Kocen said. Many, but not all states, legally require this type of policy for certified licensed senior living facilities.
Given the level of comprehensive coverage available, facilities should have a Senior Living Facilities policy in place even if not required by state law, Greene said. Policy costs have fallen over the last decade. Some carriers may charge as little as $2,300-$2,500 for a $1 million occurrence/$3 million aggregate level of coverage, Greene said.
Even higher priced policies in today’s market may run only $5,000, although those should rise in the coming years, Greene said. “While understanding the coverage and enhancements are very important and often the first step in comparing policies, owners also need to ask what does this policy do for me? Does this policy address my main exposures? More importantly, what resources will this policy provide me? It should be clear to the owner prior to purchasing the policy what the value is with purchasing the policy. The carrier you choose should provide you more than just an insurance policy is should also provide proactive risk management resources as well,” Greene said.
As with any coverage need, an insurance broker or agent must be consulted. Click here to forward this article to your insurance broker or agent to ask if you need this coverage, or share this with clients to start the conversation and ensure proper protection.
This information was provided by Burns & Wilcox, North America’s leading wholesale insurance broker and underwriting manager. Burns & Wilcox works exclusively with retail insurance brokers and agents to assist clients like you with their specialty insurance needs. Ask your insurance broker or agent to review your Senior Living Facilities policy to ensure you have proper protection.