The Lingering Insurance Question
Provider (04/02) Vol. 28, No. 4 p.29; Childs, Nathan

The increasing cost of professional and general liability (GL/PL) insurance is causing many assisted living centers, nursing facilities, and intermediate care facilities to pull out of certain markets, most notably in Texas and Florida. According to Theresa Bourdon, managing director and actuary at AON Risk Consultants, a survey carried out by her company last year found that the premiums for the average nursing facility increased by 130 percent over rates set in 2000. At the same time, the survey found that insurance coverage limits generally fell by almost $500,000 in 2001. The highest-liability-cost state in the United States is Florida, where a 1993 state law made it possible for personal-injury lawyers to bring lawsuits against long term care facilities under "strict liability" law. Not surprisingly, therefore, insurers have been trying to get out of the market, and by February 2001, the Florida Deputy Insurance Commissioner found that only 17 insurers out of 515 companies authorized to write commercial liability insurance were offering coverage to providers of long term care facilities. Insurance has now become so expensive in Texas and Florida that most facilities do not have liability coverage. Moreover, a survey conducted for the American Health Care Association last year found that 18 states have laws similar to Florida's that provide a civil cause of action separate from the medical malpractice statute. As a result, the problems affecting the long term care industry in Florida and Texas could be just the tip of the iceberg.


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