Tara Clayton & John Atkinson at a table

In the past year, the number of states with COVID-19 liability protections for senior living operators grew from 12 to 41. But attorneys are slowly chipping away at those protections through a series of lawsuits, leaving the industry vulnerable, according to legal experts.

Two experts from insurance broker and risk management firm Marsh laid out the litigation landscape facing senior living and how to prepare for it and respond to it during a Wednesday session at the 2021 Argentum Senior Living Executive Conference & Expo in Phoenix. In addition to COVID-19 liability protections, they discussed workforce-related issues.


COVID-19 claim numbers are steadily trending upward, according to Tara Clayton, J.D., senior vice president of New York-based Marsh’s senior care practice. Clayton identified approximately 450 lawsuits against the healthcare industry filed to date, 75% of which were filed in the area of senior care. 

California is leading the states, with 77 lawsuits filed to date, followed by Florida (50), Texas (47) and New York (31). Kansas (26), New Mexico (25) and Pennsylvania (23) are not far behind. Clayton said she is aware of a large number of plaintiffs sitting on “a ton of claims, patiently waiting to see what’s going to happen at the end of the day and whether these are fruitful claims.”

The majority of lawsuits are challenges to the Public Readiness and Emergency Preparedness Act, a federal public health law that provides immunity for injury caused by a covered countermeasure.

Although the Department of Health and Human Services has affirmed that assisted living and senior living fall under the “covered person” language of the PREP Act, Clayton said, federal courts aren’t necessarily agreeing with the industry’s interpretation of the use of covered countermeasures and are sending cases back to the state courts to decide. Appeals are now occurring on some of the initial cases, and HHS has issued opinions from its Office of General Counsel in support of the long-term care industry in response to some district court determinations against the industry.

“Don’t assume you have complete immunity at this point,” however, said John Atkinson, managing director and chairman of Marsh in Chicago, adding that providers should be ready to defend themselves with ample documentation.

Another trend in COVID-19 lawsuits, the panelists said, centers on attacks on state immunity protections. Some attorneys are being opportunistic in states, such as Texas, that didn’t quickly respond to the pandemic by putting protections in place, Clayton said.

Forty-one states, at some point, enacted some form of COVID-19 liability protection, with variations on covered time periods, entities and actions covered, whether it was by executive order or through legislation. Those numbers are dropping, however, as liability protections are repealed, including, as in New York, retroactively, erasing any previously adopted protections. Operators in other states, such as Florida, are facing impending lapses in protections that are scheduled to expire by year’s end.

Atkinson said that although the majority of lawsuits are against skilled nursing providers, his firm is seeing claims increasing against senior living operators as well.

The most common types of claims relate to wrongful death involving residents. Early on, Clayton said, many lawsuits focused on communities that experienced significant COVID-19 outbreaks.

“It’s a great story the plaintiffs could tell, taking advantage of the fact that our guidance was changing constantly and playing off of the media to use to their advantage,” Clayton said. Many allegations in skilled nursing and assisted living, she added, try to use prior survey citations related to infections to make a case that a community did not fix a problem that had been identified.

Workforce challenges

Workforce challenges are creating an “absolute disaster,” placing communities around the country in difficult situations, Atkinson said. Staffing shortages are occurring against a background of long-standing financial and operational challenges as the aging population grows and pent-up demand for services increases, he added.

Although the operational effects of a staffing shortage are clear, the effects from a risk perspective are still evolving, Atkinson said. Underwriters are focusing on this point, with carriers asking about workforce management policies, effects on general / professional liability, worker’s compensation and employment practices, he added. 

Strategies to address staffing shortages include offering above-average pay, tracking attrition rates and engaging employees, Atkinson said he tells his clients.

Frequency and severity trends are “troubling” in general/professional liability claims; class action claims related to employment, residents or the Americans with Disabilities Act; and marketing claims, he said, adding that volatility has increased related to large settlements and verdicts on the general/professional liability side for basic resident injury claims.

“The financial stress of the pandemic on senior living and care providers has been dramatic,” Atkinson said. “You guys spent a lot of money you were never able to recover from residents, without a lot of support from the federal government. [Personal protective equipment] was not prioritized for the industry; there was a really disparate and uncoordinated approach to making sure you had what you needed.”

At the federal level, providers are contending with data-collection requests; the industry’s connection to Medicaid waivers and the Provider Relief Fund; Occupational Safety and Health Administration standards; and the federal COVID-19 vaccine mandate, he said. State-level challenges include state OSHA requirements and increasing state regulations on infection prevention, staffing and training, Atkinson added.

Worker’s compensation is another business challenge, he said. Primary claims are centered around alleged failure to provide a safe working environment and claims on the topics of age and disability discrimination, family leave, retaliation and whistleblowing, wage and hour issues, and employer-mandated COVID-19 vaccines.

Vaccine mandates are good from an underwriting perspective because they help share a narrative around protections, but they also could have an adverse effect on staffing, he said.

“It’s a double-edged sword,” Atkinson said. “We’re strategizing and weaving a picture around how this will work out.”

Emerging claim trends, Atkinson said, involve social justice, biometric data / privacy, pay equity, the aging workforce, ADA nuances, and #MeToo claims. 

Atkinson encouraged providers to develop an effective human capital strategy, including workforce development partnerships, as well as effective onboarding and training platforms.

“We’ve got to get stronger at being proactive instead of always being reactive,” Clayton said.

The 2021 Argentum Senior Living Executive Conference ended Wednesday. The 2022 conference is set for May 16 to 18 in Minneapolis.

Related Articles