Understanding and Managing Coverage Limits for Residential Assisted Living Facilities

Introduction

As your residential assisted living facility grows, so may your insurance needs. Underestimating coverages can leave you with hefty out-of-pocket expenses in the event of a major incident. Here’s how to review and adjust your limits to stay fully protected.

Why Coverage Limits Matter

• Coverage Limits Protect Against Unexpected Costs: Coverage limits determine the maximum your insurer will pay for a claim. Exceeding these limits means your facility will have to cover remaining expenses.
• Risk of Insufficient Limits: Many facilities are underinsured, which can lead to financial strain in emergencies. Make sure your policy aligns with your facility’s actual value.

When to Review Your Insurance Coverage

• Annually or Semi-Annually: Regular reviews can help you identify gaps as your facility evolves.
• After Major Changes: If you remodel, add equipment, or increase resident capacity, reassess your coverage. Higher occupancy often necessitates higher liability and property limits.
• With Inflation or Rising Property Values: Coverage limits that were sufficient years ago may no longer cover today’s rebuilding costs or repair expenses.

Key Factors to Consider for Each Coverage Type

• Property Insurance Limits: Evaluate your building’s value, its contents, and any specialized equipment that needs coverage.
• Liability Coverage: If your facility hosts a larger number of residents or more staff, increasing liability coverage protects against potential claims.
• Business Interruption Coverage: Ensure this policy covers an extended period if operations are halted by major repairs or rebuilding.

Regular Communication with Your Insurance Agent

• Discuss Changes with Your Agent: Your agent can help assess if any adjustments are necessary and provide valuable insights on risk management.

For more details on setting appropriate coverage, visit the Small Business Administration’s Insurance Guide.

Conclusion

For a customized policy that fits your facility’s unique needs, please visit Policy People Insurance Group, get a quote HERE, or give us a call today.