This has been a year for the record books. It’s probably redundant to remind operators in the senior living and care sectors of the short- and long-term costs of the pandemic, or how this crisis has added more risks to the stack that are increasingly challenging to cover in a hard insurance market.
But know this: You can take steps that will equip you to deal with a lot of the short-term pressure — and also put your organization in a much better position from a risk perspective over the long term.
For the here and now, there’s no escaping the fact of today’s constricted insurance market, which is adjusting after years of underpricing despite rising risks. Senior living and care organizations are seeing across-the-board rate increases, especially significant in professional liability and general liability.
You really can’t navigate your way through this environment alone. It makes all the difference to have partnered with a brokerage with deep knowledge of your space and theirs as well as an extensive range of contacts to match. But you have to give them a positive story to take to insurers, because every advantage counts in this environment. Here’s how to make sure there’s plenty to work with.
It’s never too early to start on renewals
The earlier you start documenting your track record on losses and how you’ve addressed them over the long haul, the more effective a case you are able to make for why your risk is different than others in the market. Ideally, you and your broker have been in regular touch about your losses and what’s behind them, so that your exposures aren’t allowed to build and claims don’t remain open too long. This orientation is better for you and better equips your broker to negotiate with insurers.
The short- and long-term ramifications of COVID-19
Insurers are requiring you to complete very detailed COVID-19 questionnaires at renewal. It’s a prompt to be diligent in reviewing your prevention protocols and audit your facilities to ensure measures are in place and being strictly followed, including contact tracing and infection controls. Specifically, the questionnaires ask for your numbers on COVID-19-related cases, deaths and recoveries, details on your visitation procedures, and how you are prepared for future surges of contagion. Don’t be surprised to see exclusions in your policy from the novel coronavirus and other communicable diseases moving forward.
Risk management counts – especially clinical risk management
It says a lot about a senior living and care organization if it has a well-documented risk management strategy in place. This strategy needs to be supported by regular external risk assessments and a claims management strategy where claims are, to the best of your ability, closed out and the history kept comparatively clean. Of particular concern is clinical risk management to ensure that clinical care is up to par, meets, exceeds and improves on quality measures. Effective risk management leads to better outcomes and tell a success story that insurers like.
Think about alternative risk measures.
Your broker should be negotiating hard for you with insurers. But you need to ask questions about your best options for moving forward. Access to carriers and distribution networks can vary dramatically among brokerages. Additionally, there are different ways to manage your risk. More experienced brokers who know your business specifically and the senior care sector generally should advise you on different strategies and how to put them into place. Like? The captive insurance route could be one option.
The senior living and care industry has been hard hit by the events of 2020. But diligence, a strong emphasis on risk management and an openness to solutions you may not have considered can help you carry on through it.
Jordan Parnell and Gerald Stoll are both senior care segment leaders for Hub International. They specialize in developing comprehensive insurance and risk management solutions for the long-term care industry; including independent living and assisted living communities, nursing homes, clinics and urgent care centers.