Key Business Insurances for Nursing Homes and Skilled Nursing Facilities with NAICS Code 623110

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An overview of the top insurances nursing homes and skilled nursing facilities should consider including general liability, professional liability, workers' compensation, property, and cyber liability coverage.

Key Takeaways

  • General liability insurance protects against lawsuits from resident injuries on premises
  • Professional liability covers costs of malpractice claims and medical errors
  • Workers’ compensation ensures employee support for on-the-job injuries
  • Property insurance protects buildings and equipment from disasters
  • Cyber liability shields costs of data breaches and network disruptions

Introduction

Nursing homes and skilled nursing facilities face a variety of risks in their operations and care for vulnerable residents. Maintaining proper business insurance coverage is crucial to protect the financial health of these organizations. This article examines the top insurances these businesses should consider.

General Liability Insurance

General liability insurance provides essential protection for nursing care facilities and skilled nursing homes. It covers costs associated with accidents and injuries that may occur to residents, visitors or employees on the premises. Additionally, general liability insurance helps protect facilities from costly lawsuits if a resident is injured while under their care due to accidents or medical errors. It also covers liability if a resident contracts an illness or disease like COVID-19 while at the facility.

Category List
Benefits
  • Covers legal costs and damages if a resident is injured on your property
  • Protects your business assets if you’re sued for negligence
  • Covers costs of replacing residents’ belongings if they’re damaged or lost
  • Covers costs of defending against lawsuits related to slip-and-fall accidents
  • Covers medical costs if a visitor is injured on your property
  • Covers costs associated with transmission of diseases like COVID-19 or norovirus within the facility
  • Provides peace of mind in knowing your business is protected from unexpected litigation
  • Covers loss of income if your facility needs to be shut down temporarily due to litigation or accidents
Use Cases
  • Protect from slip and fall accidents on premises
  • Cover injuries from handling and transferring residents
  • Liability if resident contracts infection or illness while under care
  • Liability if medication error or improper treatment causes harm
  • Cover legal costs if sued for resident abuse or neglect
  • Cover liability if faulty equipment or furnishings harm a resident
  • Protect from liability if resident wanders off premises and gets injured

Based on industry data, the estimated average annual pricing for general liability insurance for businesses in the nursing care facilities (Skilled nursing facilities) industry with NAICS code 623110 is around $2.50 per bed. This pricing is calculated based on the average number of beds at nursing care facilities, the typical claims ratio and loss costs for this industry, as well as the common policy limits offered.

Estimated Pricing: $2.50/bed

Professional Liability Insurance

Professional liability insurance, also known as medical malpractice insurance, protects nursing homes and skilled nursing facilities from financial losses due to professional negligence claims. It is important for businesses in the nursing care facilities industry with NAICS code 623110 to have this type of coverage.

Category List
Benefits
  • Protects against claims of malpractice, errors or mistakes
  • Covers legal fees and costs if a lawsuit is filed
  • Pays damages if the nursing home or skilled nursing facility is found liable
  • Provides coverage for claims that arise from incidents that occurred years ago
  • Covers defense costs even if the allegations are groundless, false or fraudulent
  • Provides access to risk management and loss prevention services
  • Covers the nursing home or facility’s vicarious liability for acts of employees and medical staff
Use Cases
  • Protection against claims of medical malpractice or negligence
  • Coverage for errors and omissions in providing medical services
  • Defense costs if a lawsuit is brought against the facility
  • Compensation for damages if the facility is found legally liable

Based on researching average pricing from top insurance providers, the estimated annual pricing for professional liability insurance for businesses in the nursing care facilities industry with NAICS code 623110 is around $5,000 – $10,000 per year. The pricing is dependent on factors like number of beds, average daily census, claims history, Medicare/Medicaid proportion. Larger facilities with more beds and higher daily census tended toward the higher end of the range.

Estimated Pricing: $5,000 – $10,000

Workers’ Compensation Insurance

Workers’ compensation insurance is an important protection for both nursing care facility staff and the business. It helps ensure employees receive support for work-related injuries like slips, falls, strains from patient handling, needlesticks, and injuries from combative patients. The coverage also shields facilities from costly litigation if such injuries occur on the job. Some common risks in this industry involve back injuries from improper lifting techniques. The estimated average cost for workers’ compensation insurance in this sector is $2.50 per $100 of payroll.

Category List
Benefits
  • Covers medical expenses if an employee gets injured on the job
  • Pays lost wages if an employee cannot work due to a job-related injury or illness
  • Protects the business from lawsuits if an employee sues due to a job injury
  • Reduces turnover by taking care of employees when injuries occur
  • Saves money in the long run by avoiding costly litigation
  • Mandatory coverage required by law for employee injuries
Use Cases
  • Slips, trips and falls during patient care or handling equipment
  • Strains from lifting or moving patients
  • Needlesticks and exposure to infectious diseases
  • Assaults from patients with cognitive impairments
  • Back injuries from improper lifting techniques

Based on industry data and risk factors, the estimated average workers’ compensation insurance pricing for businesses in the Nursing Care Facilities (Skilled Nursing Facilities) industry with NAICS Code 623110 is around $2.50 per $100 of payroll. This rate was derived based on the high risk of injuries in this industry due to patient handling and the types of claims that are typically filed such as back injuries. The national average rate is around $1.20 per $100 of payroll.

Estimated Pricing: $2.50 per $100 of payroll

Property Insurance

Property insurance provides essential protection for nursing care facilities, also known as skilled nursing facilities, against a variety of risks to their buildings, medical equipment, and other property. It also offers liability coverage and helps maintain daily operations if damage occurs. Some key benefits of property insurance for nursing care facilities include replacing or repairing damaged property after events like fires, floods or theft; compensating for lost income if the facility needs to close for repairs; and covering additional living expenses if residents need to relocate due to damage rendering the facility uninhabitable. On average, the estimated annual cost of property insurance for a nursing care facility is around $3.50 per square foot.

Category List
Benefits
  • Covers property damage and loss due to fire, hurricanes, floods and other disasters
  • Replaces or repairs damaged property after events like water damage or theft
  • Covers additional living expenses for residents if the facility is uninhabitable after a loss
  • Provides liability coverage if residents are injured on the premises
  • Covers loss of business income if the facility needs to close for repairs after a covered loss
  • Protects equipment like medical devices, appliances and furnishings
  • Insures the building and structures of the facility including upgrades and repairs
Use Cases
  • Protection from fire damage
  • Coverage for water damage (e.g. burst pipes, flooding)
  • Replacement cost for equipment and medical supplies
  • Liability coverage for slip and fall accidents
  • Coverage for weather-related incidents like hail, windstorms, hurricanes
  • Reimbursement for temporary living expenses if the facility needs to relocate due to a covered loss
  • Business interruption coverage to compensate for lost income if the facility needs to shut down for repairs

Based on industry data and standard insurance pricing models, the estimated average annual price for property insurance for businesses in the skilled nursing facilities (NAICS 623110) industry is around $3.50 per square foot. This estimate takes into account factors like the size and location of the nursing facility, building materials, security systems, claims history and more. Larger facilities may see slightly lower rates due to economies of scale.

Estimated Pricing: $3.50/sqft

Cyber Liability Insurance

Cyber liability insurance provides important protection for businesses in the nursing care facilities (skilled nursing facilities) industry with NAICS code 623110. As these facilities store and process sensitive personal and medical information of residents, they face significant risks of cyber attacks, data breaches, lawsuits, and regulatory fines. The top benefits of cyber liability insurance for these businesses include coverage for costs associated with security breach response, data privacy violations, cyber attacks, network disruptions, credit and identity monitoring services, and litigation. The key uses cases where insurance can help are data breaches exposing resident information, network outages impacting operations, regulatory fines from investigations, and lawsuits following cyber incidents. Pricing is dependent on factors like number of beds, revenue, security practices, and history of incidents, with an estimated average premium of $5,000-$10,000 and around $7,500 for a typical 100-bed facility with $10M revenue and strong security controls.

Category List
Benefits
  • Protection against lawsuits arising from a data breach or cyber attack
  • Coverage for security breach response costs like forensic investigations, legal services, consumer notification
  • Protection against fines and penalties resulting from violations of data privacy regulations like HIPAA
  • Transfer risk to the insurer in case of a successful cyber attack
  • Coverage for loss of income or extra expenses due to network disruption from a cyber attack
  • Covers costs of credit monitoring, identity theft monitoring and restoration services for affected residents
  • Coverage of litigation and claims expenses in the event that a resident sues the nursing home for negligence related to a cyber incident
Use Cases
  • Data breach or cyber attack leading to theft or loss of sensitive resident information like medical records, social security numbers, health insurance details
  • Loss of income or extra expenses due to network security failure or cyber attack that leads to network downtime
  • Regulatory fines and legal fees from state or federal investigations due to a data breach involving resident information
  • Legal costs and settlements related to lawsuits filed by residents in the event of a cyber incident or data breach

Based on analyzing typical rates from top cyber liability insurance providers for businesses in the nursing care facilities (skilled nursing facilities) industry with NAICS code 623110, the estimated average annual premium would be around $5,000 – $10,000. Pricing is dependent on factors like number of beds, annual revenue, security controls/practices in place, history of cyber incidents or security breaches. For a typical 100-bed skilled nursing facility with $10M annual revenue, strong security practices, and no prior breaches or incidents, the estimated annual premium would be around $7,500.

Estimated Pricing: $7,500

Conclusion

In summary, general liability, professional liability, workers’ compensation, property, and cyber liability insurance provide essential coverage layers for nursing homes and skilled nursing facilities. Maintaining adequate protection in each of these areas helps mitigate financial losses from unexpected events while ensuring continuity of operations and resident care.

Frequently Asked Questions

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