It’s that time of year for me. Time to renew our insurance policies for our assisted living facilities.
And, after a reader asked me a question about insurance for their assisted living facility, I thought it was time to share some thoughts on the subject.
Some of you reading this post operate assisted living homes, single-family homes converted to use for assisted living. Many of you operate assisted living facilities, purpose-built properties usually designed for 10 to 100+ residents.[Please keep in mind, depending on the state or province you’re in and how you’re licensed or not licensed, the name you use may be different. I’m using generic terms here since my readers are from across North America. Yes, hello Canada! I’m happy some of you have reached out to me recently.]
No matter the size or type of your assisted living community, we all need insurance even if it might look a bit different to each of us.
Special Note and Reminder: I’m not an insurance professional. I’m just another assisted living owner and operator who has bought a lot of insurance over 30+ years, and I’m sharing my experience and opinions. Always, always, always seek out experts before deciding on any topic I discuss here! The purpose of this article is to help answer questions that some of you have asked and perhaps provide you with some questions to ask your own expert or, in this case, an insurance professional.
First, Find Your Expert
If you’re just starting, it’s essential to work with an insurance professional who has experience helping assisted living clients. This isn’t the time to ask your brother-in-law that recently got into insurance to find you a deal. You need someone who understands our business and someone with connections to the right insurance carriers that will provide essential coverage.
And even if you’re not starting but you’ve been operating for many years, when was the last time you asked around to find who others work with for insurance. How does your agent compare? Does your agent really understand your business and your risks? Do they provide value beyond simply taking your order for insurance? Do they have a book of business with the top insurance companies for assisted living? These are just some of the questions you might want to ask yourself to help find if you’re with an expert.
At my company, we’ve been with the same insurance agency for 30 years but we’ve definitely shopped around. Each time we do, we keep coming back to them because the answers to the questions above always come back with a Yes.
How do you find an expert? One of the best places to find someone with expertise in assisted living is your local or state trade association for assisted living. Smart insurance agents know that involvement in these associations is essential for them as a way to connect with potential clients. Once you have a list of three or four agents that have a good reputation with your association and some of its members, you’ll have a list of potential insurance professionals to help you.
Second, Decide What You Need to Cover
There are the essential things you need to cover, whether it’s required by law, your lender, or by just good common business sense. Your insurance professional should be able to help you understand the essential insurance coverages you need for your situation. Here are some of the things that may be on a list of insurance essentials:
- General liability
- Professional liability
- Worker’s compensation
I won’t get into definitions of each type of coverage. I’ll let your insurance agent handle that. But I’ll tell you that I need to 1) insure the building against fire, tornado and other hazards, 2) insure against somebody slipping in the parking lot when it’s icy in Wisconsin, 3) insure against a staff error that harms a resident, 4) insure against any staff who are injured at work, and 5) insure the vehicles we use to transport residents.
And then there are other forms of insurance coverage that some might argue aren’t essential but I think are smart:
- Business interruption
- Employee practices liability
Yes, I have all of these coverages too and one of them saved my company from a big loss many years ago.
Finally, a few other types of insurance coverage have become increasingly important for me, such as:
- Electronic data processing
- Identity theft
I didn’t forget about health insurance for your employees. Yes, that’s another form of insurance you may need to buy but we’ll talk about that more when we cover employee benefits another time.
Third, Set Smart Limits
One of the exercises we go through each year is reviewing limits on our coverage. Too much insurance coverage leads to wasted money spent on insurance premiums. Too little coverage can lead to uncovered losses, which may cost a lot more than any extra premium you’re paying.
Your insurance professional should be able to help you determine the right limits for all your coverages. They will look at the size, age, construction style of your building, the income you generate each year, the payroll you pay each year, and more to help find the right limits to be adequately covered.
Finally, Schedule Reviews
Let’s be honest – insurance isn’t much fun.
When my agent tells me it’s time for the annual insurance review, it’s a bit like the reminder for another trip to the dentist. But my semi-annual dental visits are easier.
A regular review of your insurance coverage is essential, even if it’s not fun. Just like mine, your insurance agent will probably remind you when it’s time for that review of coverage limits, property values, projected payroll, and more.
However, if you’re the owner or the person in charge of insurance for your assisted living facility, it’s your responsibility to make sure you have all the right insurance coverage you need. So put your own annual check-up on the calendar each year.
And remember to keep asking about this topic at conferences, trade shows, and other places you network with other assisted living owners. Who is your insurance agent? Do you like them? Are your rates going up? As the owner, you need to have this topic, like a hundred other topics, on your to-do list to help you be a successful assisted living owner.
Have a question? How about a comment?
Please ask your questions or share your comments below or on the home page.
[Special note: See the Special Note above too, and please remember, every situation is different – while this general information may be appropriate for some, it may not be for you – check with your own advisors and do your research to make sure you have the information you need before taking the next steps.]