Inside This Article:
- Demand for senior care is rising as the number of older adults grows.
- Recent data shows that senior care claims are becoming more costly and taking longer to resolve.
- Professional Liability Insurance and Commercial General Liability (CGL) Insurance can respond to claims involving resident injuries and other incidents.
- Proactive risk management and working with a specialized insurance broker can help facilities navigate tightening underwriting and reduce future claims.
The growing number of older adults is fueling rapid growth in demand for skilled nursing, assisted living, and memory care facilities. At the same time, new industry data shows that senior care providers are facing a higher volume of insurance claims, particularly in the skilled nursing sector, along with greater claim severity, increased handling costs, and longer settlement times.
MedPro Group’s 2026 Senior Care Data Insight report found that the average indemnity payment on senior care claims climbed to $253,000 in 2024, while the share of claims taking more than three years to resolve has increased significantly in recent years. The report identified resident safety incidents, staffing challenges, communication breakdowns, and insufficient documentation as factors driving many of the industry’s losses.
“The Healthcare Insurance market is still really tough, and the information in this report shows exactly why,” said Heidi Johnson, Broker, Professional Liability, Burns & Wilcox, Kansas City, Kansas. “A lot of it really revolves around resident safety and what is happening to residents because of staffing shortages.”
The Healthcare Insurance market is still really tough, and the information in this report shows exactly why. A lot of it really revolves around resident safety and what is happening to residents because of staffing shortages.
These evolving risks underscore the importance of Professional Liability Insurance and Commercial General Liability (CGL) Insurance, which can help facilities respond to claims and lawsuits.
“Claim severity and frequency is on the rise based on the litigious culture we are currently in,” said Tyler Hayden, Broker, Professional Liability, Burns & Wilcox, Detroit / Farmington Hills, Michigan. “There really are not that many carriers writing in this space. A dedicated wholesale broker with a specialty in healthcare or residential healthcare will know the marketplace inside and out.”
Growing demand, greater exposure
According to government statistics, in 2023, there were 7.6 million Canadians aged 65 or older, representing 18.9% of the population. By 2030, the number of seniors is projected to be between 21.4% and 23.4%. MedPro Group’s recent report, which analyzed 2,266 senior care liability cases closed with indemnity payments between 2017 and mid-2025, found that assisted living claims averaged $211,000, while indemnity payments for memory care cases averaged $233,000. Claims volume is also increasing, especially in skilled nursing, with California and Florida accounting for the largest shares of claims.
Resident safety issues — including falls, inadequate monitoring, and pressure ulcers — “dominate the loss picture,” the MedPro report noted. According to Johnson, staffing shortages make it more difficult for facilities to consistently follow policies and procedures. “The facilities are growing because of the aging population and as they keep growing, they need more staff,” she said. “A shortage of staffing causes more claims, and that makes it harder to place the insurance coverage.”
In this environment, senior care facilities seeking Professional Liability Insurance and CGL Insurance may encounter more restrictive underwriting, higher retentions that increase out-of-pocket obligations, and policy exclusions or sublimits for certain exposures. These two policies are often packaged together with the same carrier, Hayden pointed out, adding that he recently used that approach to place Professional Liability, CGL, abuse, and property coverage with one carrier for a two-location, 12-bed assisted living facility in southwest Michigan.
“When you have CGL and Professional Liability placed with two different carriers, it creates an opportunity for both carriers to deny the claim and point the finger at the other line of business,” he said. “If you have both of those coverage parts with the same carrier, you never have to run into that situation.”
A changing claims landscape
A growing portion of senior care claims are taking more than three years to resolve, leading to higher legal defense expenses and other claim-handling costs, the MedPro Group report found. Large losses were especially pronounced in California, which accounted for 26% of the large-loss cases analyzed and had the highest average total paid per large-loss case.
“A claim can go for three years, and then that costs more,” Johnson said. “All of that contributes to why insurance costs are going up and why there is such a shortage of carriers. They are still dealing with so many open claims.”
Abuse claims are another significant concern. “We have seen a lot of abuse claims,” she said, adding that facilities with a history of abuse allegations may face non-renewal if they have not implemented risk management strategies to prevent future issues.
Facilities should understand how these allegations may be covered. Sexual Abuse and Molestation (SAM) Coverage can help facilities respond to claims involving sexual misconduct, abuse, or molestation, which may otherwise be excluded. Depending on the policy, SAM Coverage may be subject to a sublimit or provided at full policy limits, Hayden explained.
“What we like to see is Professional Liability, General Liability, and abuse coverage all together,” he said.
What we like to see is Professional Liability, General Liability, and abuse coverage all together [for senior care facilities].
Coverage for elopement should also be discussed, Johnson said. “This can happen in memory care or dementia facilities where someone may wander off the premises,” she said. “Those are often very large claims.”
A facility’s licensing status can affect the coverage available. While requirements vary by state, unlicensed facilities may be unable to obtain Professional Liability Insurance or coverage for resident injuries, Hayden said.
“You would be surprised how many facilities are out there operating without a license,” he said. “We can get them General Liability Insurance, but we cannot give them any Professional Liability Insurance or provide any coverage for resident injuries if they are unlicensed.”
Navigating today’s insurance marketplace
Senior care providers evaluating insurance options may encounter risk retention groups or risk purchasing groups, which can offer lower-cost insurance coverage through a master policy shared by multiple organizations. However, participants in these programs may share aggregate limits, meaning losses elsewhere in the program could affect the coverage available for later claims.
“If some of the subscribers have big losses early, that could exhaust the limits,” Hayden said. “If you have a claim toward the end of the policy, there might not be any coverage available to you.”
An experienced broker who specializes in the healthcare industry can help navigate these options, Johnson said. “Every carrier does things differently,” she said. “That is our job, and the agent’s job, to make sure we are getting the best program.”
Every carrier does things differently. That is our job, and the agent’s job, to make sure we are getting the best program.
Price and coverage are not the only considerations. Facilities should also look for carriers with reputable claims-handling teams and risk management resources.
“When it comes time to deal with a claim, you want that to be the most stress-free experience it can be,” Hayden said. “You want to be partnered with a carrier that is going to be responsive, transparent, and working in the best interests of the client.”
When it comes time to deal with a claim, you want that to be the most stress-free experience it can be. You want to be partnered with a carrier that is going to be responsive, transparent, and working in the best interests of the client.
Insurance carriers may offer risk mitigation controls surrounding staffing, employee training, documentation, and more. “A good business practice that goes a long way in preventing and mitigating claims is a well-rounded employee handbook that outlines standard operating procedures for client care,” Hayden said. “This, paired with regular employee training on best care practices, will help reduce the likelihood of claims.”
Agents can use their familiarity with common claims to identify weaknesses before losses occur. “As an agent, you know what claims everybody is seeing,” Johnson said. “You can help them get their controls in place, develop templates for policies and procedures, and make sure they provide adequate training to help prevent more losses and claims.”
