Over the past decade, large premium increases and shrinking coverage availability has spiraled as a result of three factors: inadequate care delivered by a small number of providers, an explosion of lawsuits and record-setting financial awards.  The results are industry-wide premium increases and an exodus of carriers from the market.

There has been a vicious cycle of dramatically rising rates and reduced coverage availability, where you pay a lot more and get a lot less. Most carriers have left the market all together, while traditional first-dollar coverage is giving way to high deductible, claims-made policies. Some facilities are unable to secure any liability coverage at all, having been dropped by long time carriers. Those “lucky” enough to find availability have been faced with rate increases of 30%, 50%, 100%, and MORE each year!

Market Force Factors

Rapidly growing population of elderly Americans Inadequate, or reduced funding Shortage of qualified nursing and support staff Legal climate (1987 Nursing Home Reform Act, Residents’ Bill of Rights) More aggressive plaintiff attorneys

Insurance Industry Factors

Inadequate premiums and underwriting Higher legal and insurance related expenses Insurers retreating from the market

Nursing Home Operator Factors

Lack of aggressive, effective risk management Actual cases of negligence