Senior living and care providers could see their professional liability and property insurance increase by 5% to 10% in 2025, with intense scrutiny on loss development and difficult venues, according to analysis from Willis Towers Watson, released this month.
This prediction jibes with a previous analysis from this spring by WTW, which predicted that property insurance costs for long-term care would climb by as much as 10% for noncatastrophic policies. Last fall, WTW predicted prices on certain long-term care lines of coverage could spike 20% to 50%.
Capacity deployed to senior living and care remains around $5 million to $10 million, depending on the carrier, analysts at WTW reported last week.
According to the analysts, insurance companies are frequently reluctant to deploy significant capacity in litigious venues such as California, Florida. New Jersey and New York.
Perennial issues affecting provider coverages are class action, punitive damages, communicable disease and staffing shortages.
“Open communication and highlighting risk management achievements go a long way toward achieving an optimal underwriting result,” WTW said.
Buildings without adequate sprinkler protection can expect higher-than-normal rate increases, and water damage coverage and catastrophe-prone locations will continue to experience high deductibles.
“Builders risk coverage for new senior living [and care] construction continues to be very challenging, but strong risk management protocols will set your project apart and generate better marketplace results,” the authors wrote. “We’re seeing closer scrutiny of business income/rent roll exposures, which require a business income and extra expense worksheet to substantiate reported values.”
Underwriters working on workers compensation policies “continue to focus on controls, safety culture and claim reconciliation or lessons learned post loss.”
The analysts noted that providers should take steps to minimize slips, trips and falls, which “present the most prevalent injuries in the senior living [and care] community setting, and organizations with strong protocols to address these colleague risks fare better during the risk underwriting process.”
