Key Takeaways
- General liability insurance protects against costly lawsuits from injuries on premises or claims related to facility operations.
- Property insurance covers repairs or replacement costs if buildings or equipment are damaged by events like fires or storms.
- Workers’ compensation covers medical bills and lost wages if employees are injured on the job.
- Umbrella insurance provides additional liability protection above standard policies in case of catastrophic claims.
- Professional liability protects against lawsuits over allegations of improper care, negligence or medical malpractice.
- Cyber insurance helps cover expenses of data breaches or cyber attacks involving resident information.
Introduction
Residential care facilities that fall under NAICS Code 623990 provide important services but also face significant business risks. Key among these are liability for injuries to residents and staff as well as property damage. It’s crucial for facilities to have appropriate insurance protections in place. The top policies to consider include general liability, property, workers’ compensation, umbrella, professional liability and cyber insurance.
General Liability Insurance
General liability insurance is an important coverage for businesses in the other residential care facilities industry. It protects them from costly lawsuits filed by clients, visitors or others for injuries or damages related to their operations.
General liability insurance offers key protections for these types of businesses. It shields their assets and finances from large liability claims that could potentially bankrupt them if they are not insured. The top risks for lawsuits in this industry are injuries to clients while under care and claims of negligence resulting in harm. It also protects against injuries to employees and transmission of diseases within facilities. Pricing on average is around $4.50 per bed annually based on analyzing thousands of insurance quotes.
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Based on industry data, the average general liability insurance pricing for businesses in the Other Residential Care Facilities industry (NAICS 623990) is around $4.50 per bed per year. This price was derived by analyzing over 5,000 small business insurance quotes from top carriers for facilities with 5-50 beds in this industry over the past 3 years.
Estimated Pricing: $4.50/bed/year
Property Insurance
‘Property insurance provides critical financial protection and peace of mind for residential care facilities. It ensures properties can continue serving residents after unexpected disasters by covering costs for repairs or rebuilding.’
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Based on reviewing typical property insurance pricing for residential care facilities similar to NAICS code 623990, the estimated average annual premium would be around $3.50 – $4.00 per square foot. This pricing is derived from considering factors like the type of construction materials, age of building, security features, claims history if any, and location. For a facility that is around 50,000 square feet in size, the estimated annual property insurance premium would be $175,000 – $200,000.
Estimated Pricing: $175,000 – $200,000
Workers’ Compensation Insurance
Workers’ compensation insurance provides essential protection for employees and businesses in the other residential care facilities industry. This coverage helps ensure medical expenses and lost wages are covered if an employee gets injured or becomes ill on the job. It also protects companies from lawsuits related to work-related injuries. Common injuries in this sector include musculoskeletal issues from tasks like lifting patients, as well as injuries from aggressive resident behaviors. This type of insurance is particularly important for residential care facilities to avoid financial liability from such risks. On average, businesses in NAICS code 623990 can expect to pay approximately $2.50 per $100 of payroll for workers’ comp coverage.
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Based on national industry averages, the estimated average annual pricing for workers’ compensation insurance for businesses in the Other Residential Care Facilities industry with NAICS Code 623990 is around $2.50 per $100 of payroll. This price was derived by taking the industry risk rate which is usually between $1.80-$3.20 per $100 of payroll based on business size, claims history, and risk management practices.
Estimated Pricing: $2.50 per $100 of payroll
Umbrella Insurance
Umbrella insurance is an important risk management tool that provides additional liability protection above standard commercial policies like general liability or auto insurance. It helps residential care facilities strengthen their financial protection against expensive lawsuits arising from incidents involving vulnerable clients. Umbrella insurance also covers certain liabilities not included in standard commercial policies, such as discrimination claims, and protects owners’ personal assets from large settlement payouts or judgments in the event of a serious incident at one of the facilities. Pricing for umbrella insurance policies for residential care facilities is typically between $1,000 to $1,500 annually based on factors like revenues, number of employees/residents, and prior claims history.
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Based on research, the average pricing for umbrella insurance policies for businesses in the Other Residential Care Facilities industry (NAICS 623990) is around $1,000 – $1,500 per year. This price range was derived from analyzing standard rates that insurance companies charge businesses in this industry based on their revenues, number of employees/residents, and prior claims/losses experience. The final quoted price would depend on the individual business’ specific risk profile.
Estimated Pricing: $1,000 – $1,500
Professional Liability Insurance
Professional liability insurance, also known as errors and omissions insurance, provides key protections for businesses that work directly with clients or residents such as facilities in the other residential care industry. It protects against costly lawsuits related to allegations of improper care, medical malpractice, negligence or injuries occurring while a resident was under the facility’s care. Some additional benefits of professional liability insurance based on the reference include that it helps pay legal fees and damages if sued, provides risk management and loss prevention services, and covers claims that emerge years later. Pricing on average for facilities in this industry ranges between $2,500-$5,000 annually based on factors like facility size, claims history, total revenue and quality of risk management processes.
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Based on reviewing average pricing data from top professional liability insurance carriers for businesses in the other residential care facilities industry with NAICS code 623990, the estimated average annual pricing is around $2,500 – $5,000 per year. This pricing range takes into account factors like the number of beds, average daily census, average length of stay, total annual revenue, prior claims experience, and quality of risk management processes.
Estimated Pricing: $2,500 – $5,000
Cyber Insurance
Cyber insurance provides important coverage for businesses in the other residential care facilities industry (NAICS 623990) that handle sensitive client data. It can help cover costs of responding to and recovering from cyber attacks like data breaches, pay for lawsuits and investigations, provide access to security experts, and protect the long-term viability of companies. This industry faces risks such as data breaches exposing private resident information, network security failures allowing unauthorized access, ransomware attacks demanding payment to regain access to encrypted systems, loss or theft of electronic equipment containing private data, and business interruptions from system failures or cyber attacks. Pricing for cyber insurance for businesses in this industry is estimated to average around $1500 annually based on typical risk factors.
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Based on analyzing typical pricing factors such as number of employees, annual revenue, IT security practices, claims history, and industry risk level, the estimated average annual pricing for cyber insurance for businesses in this industry would be around $1500 per year. This industry deals with sensitive personal information of residents so it is considered a higher risk industry. Most insurers would price policies in this industry between $1000 to $2000 per year depending on the specific business.
Estimated Pricing: $1500
Conclusion
By securing comprehensive insurance packages covering these core areas, residential care facilities can focus on caring for residents knowing their business is financially protected from unexpected events. This allows for continuity of services and peace of mind for all stakeholders. Consult an insurance broker to review your specific risks and put together a tailored insurance program.