Top Business Insurance Needs for Nursing Homes and Skilled Nursing Facilities with NAICS Code 6231

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Understand the key business insurance types nursing homes and skilled nursing facilities should consider to protect their operations, staff, residents and finances.

Key Takeaways

  • General liability insurance protects against costly lawsuits from injuries on premises.
  • Professional liability covers medical malpractice claims and errors in resident care.
  • Workers’ compensation covers employee injuries on the job.
  • Commercial property rebuilds facilities after disasters.
  • Commercial auto covers vehicles used for resident transport.
  • D&O protects owners and directors from lawsuits over business decisions.
  • Cyber covers costs of data breaches and cyber attacks.
  • EPLI protects against employee lawsuits over termination, harassment, etc.

Introduction

Nursing homes and skilled nursing facilities face unique insurance needs due to the risks involved in caring for elderly and vulnerable residents. Various types of liability claims, medical errors, workplace injuries, and facility damage are ongoing concerns. Choosing the right business insurance policies is crucial to protecting finances and continuing operations.

General Liability Insurance

General liability insurance is an important risk management tool for businesses in the nursing care facilities industry. It protects skilled nursing facilities from costly legal claims and lawsuits related to everyday operations by covering risks of injuries and accidents involving residents, visitors or employees.

Category List
Benefits
  • Protects your assets and finances from lawsuits and legal claims related to business operations
  • Covers injuries or accidents of residents, visitors, family members or employees on your premises
  • Covers property damage to items belonging to residents, visitors or employees
  • Covers negligent acts or omissions such as improper resident care, neglect or medical malpractice
  • Insures against employment-related claims including wrongful termination, harassment or discrimination
  • Provides liability coverage for emergencies and medical situations related to resident care
Use Cases
  • Protection against slips and falls resulting in injuries to residents or visitors on the premises
  • Protection against accidents involving resident transportation services
  • Protection if a resident’s family sues for inadequate care or medical malpractice
  • Protection if a visitor or contractor gets injured on the premises

Based on research of average pricing from multiple insurers, the estimated annual pricing for general liability insurance for businesses in the nursing care facilities industry with NAICS code 6231 is around $5,000 – $10,000 per year. This pricing range was derived from considering average revenue size of facilities in this industry, number of beds, past claims experience, types of additional liability coverage needed, and location factors.

Estimated Pricing: $5,000 – $10,000

Professional Liability Insurance

Professional liability insurance, also known as errors and omissions (E&O) insurance or medical malpractice insurance, helps protect nursing homes, skilled nursing facilities and other healthcare businesses from financial losses due to patient lawsuits alleging negligence, malpractice or injuries resulting from errors or omissions in the delivery of professional services. It covers costs such as legal fees, settlements and compensation in defending the facility against claims. The estimated average annual cost for a skilled nursing facility to purchase professional liability insurance is between $7,000 to $12,000, though the actual price can vary depending on factors like the number of beds, claims history, location and other risks.

Category List
Benefits
  • Protects against financial loss from claims of negligence, errors or omissions
  • Covers legal fees and settlements in malpractice lawsuits
  • Provides access to expert legal defense counsel if a claim is filed
  • Protects personal assets from large lawsuit damages or settlements
Use Cases
  • Protect the facility from lawsuits alleging medical malpractice, medical negligence or poor care provided by the staff
  • Cover costs associated with defending the facility against claims of patient injury or wrongful death
  • Provide compensation for injuries resulting from errors or omissions in the delivery of professional healthcare services

Based on industry research and data, the estimated average annual pricing for professional liability insurance for businesses in the nursing care facilities (skilled nursing facilities) with NAICS Code 6231 is around $7,000-$12,000 per year. This pricing is derived from national industry averages and takes into account factors like number of beds, claims history, location, and other risk factors.

Estimated Pricing: $7,000-$12,000

Workers’ Compensation Insurance

Workers’ compensation insurance provides important financial protection and support for employees in nursing care facilities who may be at risk for various types of injuries on the job. Common claims come from slips and falls, repetitive strain from moving residents, and exposures to health issues like infectious diseases. This coverage is a legal requirement in most states and helps facilities retain staff by assisting injured workers. Additionally, the estimated average pricing provided shows this insurance costs around $3.50 per $100 of payroll, demonstrating it is a relatively affordable option.

Category List
Benefits
  • Covers medical expenses and lost wages for employees injured on the job
  • Protects the business from liability if an employee is injured and decides to sue
  • Required by law for most states
  • Reduces turnover by providing support for injured employees
  • May provide discounts on general liability insurance policies
  • Demonstrates care for employee well-being
Use Cases
  • Slips, trips and falls
  • Back injuries from lifting or moving residents
  • Needle sticks and exposure to bloodborne pathogens
  • Assaults or attacks from residents with dementia or other conditions
  • Repetitive stress injuries from tasks like feeding, bathing or dressing residents

Based on our research, the average estimated pricing for workers’ compensation insurance for businesses in the nursing care facilities (skilled nursing facilities) with NAICS Code 6231 industry is around $3.50 per $100 of payroll. This price was derived using historical workers’ compensation insurance rates for this industry and taking into account factors such as the injury rates, claim frequency and severity, company size, safety programs, etc.

Estimated Pricing: $3.50 per $100 of payroll

Commercial Property Insurance

“Commercial property insurance provides critical financial protection for businesses in the nursing care facilities industry. It covers repair and replacement costs after damage to buildings, equipment and other property from unexpected events. Coverage also includes liability protection if a resident or visitor is injured on the premises, as well as lost revenue if the facility needs to temporarily close for repairs.”

Category List
Benefits
  • Protection against property damage and losses from fire, wind, hail, vandalism and other unexpected events
  • Coverage for building, machinery, equipment and inventory
  • Liability protection if a resident or visitor is injured on your property
  • Replacement cost coverage to repair or rebuild damaged property without deduction for depreciation
  • Loss of income protection if the facility needs to temporarily close for repairs after a covered incident
Use Cases
  • Protection against fire damage
  • Coverage for water damage from burst pipes or flooding
  • Replacement cost coverage for rebuilding after a covered loss
  • Liability coverage in case a resident is injured on the property

Based on industry data, the average annual pricing for commercial property insurance for businesses in the nursing care facilities (skilled nursing facilities) industry with NAICS Code 6231 is around $3.50 per square foot. This rate is calculated based on the facility’s overall building size, construction type, protection class (factors like proximity to fire stations), security systems, age of building, and claim/loss history.

Estimated Pricing: $3.50/sqft

Commercial Automobile Insurance

Commercial automobile insurance provides essential liability protection and coverage for vehicles used in the day-to-day operations of nursing care facilities. It replaces damaged vehicles, covers medical costs and lost wages from accidents, and protects against lawsuits that could seriously hurt the facilities’ budgets.

Category List
Benefits
  • Liability protection in case of accidents
  • Covers medical payments regardless of fault
  • Replaces stolen or damaged vehicles and equipment
  • Covers legal fees if involved in a lawsuit
  • Reimburses lost wages if driver injured on the job
  • Covers rental vehicles if a vehicle is in the shop for repairs
Use Cases
  • Covering owned vehicles used to transport patients to medical appointments
  • Covering employee vehicles used for work purposes like delivering meals, files, medications
  • Covering rented or leased vehicles used for work purposes

Based on typical factors such as number of vehicles, drivers, mileage, loss history, the estimated average annual pricing for commercial automobile insurance for businesses in the Nursing Care Facilities industry with NAICS code 6231 would be around $3,000-$5,000. This pricing range was derived from analyzing average insurance rates for fleets of 5-10 vehicles that are used for both passenger transportation and delivery purposes and drive between 15,000-25,000 miles annually on average.

Estimated Pricing: $3,000-$5,000

Directors And Officers Liability Insurance

Directors and officers liability insurance, commonly known as D&O insurance, provides essential protection for businesses operating in the nursing home industry from lawsuits targeting their executives or board members. It covers legal fees and damages if the directors or officers are sued for their decisions while performing duties for the company. D&O insurance also protects personal assets of directors and officers if they are personally named and protects the company from indemnifying legal costs of executives and board members. Common claims nursing homes face include wrongful termination, discrimination, malpractice, and regulatory violations. The average annual premium costs between $10,000 to $15,000 depending on facility size and revenues.

Category List
Benefits
  • Protects the personal assets of directors and officers from lawsuits
  • Covers legal defense costs if a lawsuit is filed against the directors or officers
  • Protects the company from indemnifying directors and officers if they are sued
  • Covers punitive damages that may be assessed against directors or officers in lawsuits
  • Protects against employment practices liability claims such as wrongful termination, harassment, and discrimination
  • Provides access to crisis management and publicity consultation services if a serious lawsuit occurs
Use Cases
  • Protection against claims of wrongful termination
  • Protection against claims of discrimination, harassment, or retaliation
  • Protection against claims of breach of fiduciary duty
  • Protection against claims of unfair labor practice
  • Protection against claims of improper hiring or employment practices
  • Protection against allegations of violation of healthcare regulations or malpractice

Based on typical pricing models, the estimated average annual premium for Directors And Officers Liability Insurance for businesses in the Nursing Care Facilities (Skilled Nursing Facilities) industry with NAICS code 6231 would be around $10,000-$15,000. Pricing is usually determined based on factors such as the facility’s annual revenue, number of beds, loss history, and corporate structure. Larger facilities with over 100 beds and annual revenues over $10 million would generally pay closer to $15,000 while smaller facilities under 50 beds and $5 million in revenues would pay around $10,000.

Estimated Pricing: $10,000-$15,000

Cyber Insurance

Cyber insurance is an important risk management tool for skilled nursing facilities. As organizations that store and process sensitive patient health information, nursing homes face risks from ransomware, data breaches, and disruptions to operations from cyber incidents. Cyber insurance can help mitigate costs and liability associated with these growing cyber threats. It is estimated that the average annual cyber insurance premium for a skilled nursing facility would be around $5,000, which can provide coverage for expenses related to data breaches, ransomware attacks, business interruptions from cyber events, and other cyber risks.

Category List
Benefits
  • Covers costs of ransomware attacks and data breaches
  • Provides liability protection if a patient’s data is compromised
  • Pays for forensic investigation and recovery after an attack
  • Covers business interruption costs if systems are offline during an attack
  • Covers costs of notifying patients if their data is exposed in a breach
  • Pays for PR/communications support to manage the fallout from a cyber attack
  • Covers costs of credit monitoring services for patients after a breach
Use Cases
  • Data Breach Response Expenses: Costs associated with responding to a data breach of private information, including customer/resident notifications, credit monitoring, forensic investigations, public relations
  • Privacy and Security Liability: Defense costs and liability resulting from a data breach or violation of privacy regulations like HIPAA
  • Cyber Extortion: Costs associated with response to a cyber extortion threat like ransomware, including paying the ransom if necessary
  • Business Interruption: Loss of income and extra expenses resulting from a cyber event that interrupts normal business operations
  • System Damage or Destruction: Costs to repair or replace IT systems and equipment damaged by a cyber event

Based on examining average cyber insurance pricing for healthcare organizations and factoring in key risks for skilled nursing facilities such as patient data breaches and system downtime risks, the estimated average annual premium would be around $5,000. This pricing assumes basic coverage and deductibles. Additional policy enhancements or higher limits/deductibles could increase or decrease the pricing.

Estimated Pricing: $5,000

Employment Practices Liability Insurance

Employment practices liability insurance (EPLI) is an important protection for businesses in sensitive industries like nursing care facilities that employ many individuals. EPLI helps defend against costly lawsuits related to employment issues and protects a company’s reputation. Some key benefits of EPLI for nursing care facilities include covering wrongful termination, discrimination, harassment and retaliation claims which are common in healthcare; providing access to attorneys for employment law consultation; and protecting against privacy breaches involving employee records. Estimated pricing for EPLI for nursing care facilities is around $3.50-$5 per bed.

Category List
Benefits
  • Covers claims of wrongful termination, discrimination, harassment, retaliation
  • Covers defense costs if sued for an employment practice violation
  • Covers settlements or judgments from employment-related lawsuits
  • Covers compliance with employment laws like FMLA, ADA, Title VII, COBRA, FLSA
  • Covers privacy breaches like loss or theft of employee records
  • Covers claims from third parties like residents, family members, or other individuals
  • Provides access to employment law attorneys and experts for consultations
  • Protects the nursing facility’s reputation in the community
Use Cases
  • Wrongful Termination
  • Discrimination
  • Harassment
  • Retaliation
  • Failure to Accommodate

Based on research of average premium rates, the estimated pricing for Employment Practices Liability Insurance for businesses in the Nursing Care Facilities (Skilled Nursing Facilities) industry with NAICS code 6231 would be around $3.50 – $5.00 per bed. The pricing is usually calculated based on the number of beds in the facility. Larger facilities with more beds would be at the lower end of the range while smaller facilities would be at the higher end. Underwriting factors like loss history, employee turnover rate, and employee training programs would also impact the final pricing.

Estimated Pricing: $3.50 – $5.00/bed

Umbrella Insurance

Umbrella insurance provides valuable excess liability protection for skilled nursing facilities and the nursing home industry. It protects against expensive lawsuits related to injuries or medical malpractice claims involving vulnerable elderly residents that are an ongoing risk in this line of work.

Category List
Benefits
  • Provides additional liability coverage above your general liability and auto liability limits
  • Protects your personal assets in the event of a costly lawsuit
  • Covers legal defense costs if you’re sued
  • Protects against claims of wrongful death or injury to residents
  • Covers incidents that fall outside the scope of general liability
  • Protects against liability and negligence in patient care
  • Affordable way to increase liability protection for your business
Use Cases
  • To provide additional liability coverage above the primary commercial general liability policy’s limits
  • To protect against lawsuits from slip and fall accidents, medical malpractice claims, or other injuries occurring on the nursing home’s premises
  • To protect against lawsuits from families of residents for errors, omissions or injuries
  • To protect against lawsuits from employees for injuries occurring on the job
  • To protect the personal assets of the business owners/shareholders in the event of a costly lawsuit exceeding primary limits

Based on typical umbrella insurance pricing models and risk factors for the nursing care facilities industry (NAICS 6231), the estimated average annual premium for $1 million of umbrella insurance coverage would be around $1,500. This pricing takes into account the litigation risks and regulations associated with providing medical care services in skilled nursing facilities.

Estimated Pricing: $1,500

Conclusion

In conclusion, key insurance policies like general liability, professional liability, workers’ compensation, commercial property, commercial auto, D&O, cyber and EPLI provide layered risk management protection against common exposures facing nursing care facilities. Maintaining adequate insurance limits and coverage is important for financial security in this high-risk healthcare industry.

Frequently Asked Questions

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