As senior living operators examine their insurance carrier relationships for 2021, the year they just experienced will be top of mind. The health and welfare of staff and residents should dictate policy decisions, and that means considering how their coverage worked for them in 2020, and to what degree their insurer was a partner versus merely a provider of coverage.
A partner should provide resources, guidance and tips, while being agile and adaptable. It should be an organization that does not merely react to something like COVID-19, but can be proactive around whatever challenges tomorrow brings.
Here, then, are six questions operators should ask about their coverage during these uncertain times.
How did my carrier treat me during the pandemic?
It feels hard to believe, but it has now been one full year since the World Health Organization declared the COVID-19 virus a pandemic. And while vaccination rates are growing, we are not out of the woods yet — not for this pandemic or for the health crisis of the future in which COVID-19-level precautions may return.
Therefore, as senior living operators look back at the past 12 months, the answers for how their insurance carrier treated them during the pandemic may well offer a glimpse into how that carrier will treat them the next time trouble strikes.
“I think some of the questions senior living operators would want to ask themselves are, ‘Did your insurer provide you with guidance? Did your insurer conduct training? Did they lead you to resources to help you manage through the crisis? Did they offer to sit with you and do an assessment and review of your infection control protocols to see if there is anything they might be able to advise you on?’” says Jim Ketterson, senior director of senior living at Church Mutual Insurance Company, S.I. (a stock insurer)1.
Ketterson is part of the team at Church Mutual® that spent the past 12 months working to provide constant updates and assistance to its senior living clients and brokers. The company conducted telephonic infection control assessments and offered advice on tools, resources and protocols.
“We encouraged our customers to make us aware of any COVID-related deaths, and hopefully mitigate the likelihood of any further casualties,” he says. “This was an opportunity for your carrier to step up and help you through the crisis, and hopefully your insurer did that.”
What coverage did my plan afford me that helped me through the pandemic?
When the pandemic began, most insurers immediately rolled out some form of a total communicable disease exclusion for their general liability and professional liability policies. At the same time, reinsurers also started adding communicable disease exclusions to their reinsurance policies.
“We took a slightly different approach at Church Mutual,” Ketterson says. The company rolled out a declared epidemic and pandemic exclusion, recognizing the importance that their clients still have coverage for endemic disease — those diseases that are the everyday risks within a senior living operation.
“We thought it was important that they still had coverage for that,” he says.
Did my premiums rise? If so, why?
While determining whether one’s premiums rose is in many ways a straightforward question, Ketterson notes that the reason an operator’s premiums may have risen during the pandemic is more complicated, as it may not actually be due to COVID-19.
“Almost all senior living operators will tell you that their professional liability and their general liability premiums have been rising,” he says. “The insurance industry has been facing significant loss cost inflation with both increasing frequency of claims and higher verdicts being awarded by juries. The premium increases they’ve been experiencing over the last several years have been driven by those trends and not by COVID-related issues.”
The flip side, Ketterson says, is many senior living operators have benefited in the past several years from lower or more stable workers’ compensation rates. However, he notes that trend may be reversing in states now declaring COVID-19 to be presumptively work-acquired and thus presumptively compensable under workers’ comp.
“In a select group of states, including California, Minnesota, and a few others, COVID is causing workers’ compensation rates to go up when they may otherwise not have,” he says.
Did my plan give resident family members peace of mind?
An adult considering moving a parent into assisted living may have thought twice during the pandemic about such a move out of concerns over COVID-19, yet that person would not likely be able to say how a given senior living operator’s insurance company was impacting comfort level. The responsibility to facilitate that comfort lies, of course, with the operator.
“We really tried hard to equip our customers with the best operating procedures from an infection control standpoint so that they could put potential residents and their families at ease, and leave them feeling that the communities we insure are taking first-rate steps to protect residents,” Ketterson says.
Church Mutual is helping operators find ways to reduce the risk of COVID exposure beyond simply helping clients assess and improve their on-site infection control protocols. Its memory care operators benefit from its partnership with fall prevention technology company SafelyYou.
SafelyYou’s technology and service has been shown to reduce expected falls by 40% or more, which reduces emergency room visits and helps keep residents out of the hospital, where the chances of contracting COVID-19 are higher. Church Mutual even has a program for insureds who qualify, where they help to offset the cost of piloting SafelyYou’s system in a community.
Fall-related claims make up more than 50% of professional liability loss dollars, so the reduction in falls from use of SafelyYou is expected to have a significant impact on professional liability losses. Ketterson noted that “the other benefit we are seeing with customers who deploy SafelyYou is that their occupancy levels are rising. They have a higher close rate with potential residents and their families because the technology makes them feel safer.
Average length of stay also looks to be rising in communities where the technology is deployed as fewer residents need to be discharged to higher acuity care caused by falls and fall-related injuries.”
Did my employees feel safe coming to work?
This question is related to the previous two, in part because, naturally, employees have the same safety fears around COVID in the workplace as residents and their family members.
“Our consultative work with insurers had this as a big focus,” Ketterson says. “By working with our customers to ensure they had industry-leading infection control protocols in place, we were helping to drive employees’ confidence that their employers were taking the right steps to protect their welfare and hopefully reducing employee fears in the process. Having very detailed infection control protocols in place goes a long way in alleviating the fears of those employees.”
What does my policy cover now — and how can I get relief beyond just insurance?
Senior housing operators fought heroically throughout the pandemic for the health and wellness of their residents and staff, all while bearing great burdens brought by COVID-19. Their insurance providers can only respond as dictated by the terms of their policies.
“Plagues and pandemics are not something that insurers price for, and as mentioned earlier, the reinsurers are generally excluding those exposures,” Ketterson says.
Church Mutual therefore believes that part of the duty of an insurer is to push lawmakers to help protect senior housing operators, which is happening now with the Public Readiness and Emergency Preparedness (PREP) Act.
“The senior living industry is not responsible for coronavirus,” Ketterson says. “We feel senior living insurers should be providing expert advice to their customers on how to mitigate risk and implement effective infection control protocols. We do not believe senior living operators should be held responsible for a virus that is not of their making.”
This article is sponsored by Church Mutual Insurance Company, S.I. To learn more about how Church Mutual can help protect your residents, staff members and communities overall, visit churchmutual.com.
1Church Mutual Insurance Company, S.I. is a stock insurer whose policyholders are members of the parent mutual holding company formed on 1/1/20. S.I. = a stock insurer.