Insurance Consideration for Disaster Preparedness
Presented at CAHF Really Ready 5 Conference
On February 21, 2019, Michael Boldt participated in a panel discussion regarding Business Continuity. The 2-hour session was conducted as part of the 2-Day California Association of Healthcare Facilities (CAHF) Really Ready! Disaster Preparedness Conference in Anaheim California. Scott Aronson, Russel-Phillips & Associates (RPA) provided an overview of the essential elements for a Long Term Care facility to include in an effective Disaster Business Continuity Plan. Brian Collier and Aaron Edmonds, Plum Healthcare Group, shared their experiences with the resent 2018 Camp Fire that destroyed a Plum run nursing home along with the entire town of Paradise California. Michael presented a list of 6 topics that long term care managers should discuss with their risk management and insurance vendors to ensure the maximum insurance coverage and mitigation to help continuity after a disaster.
1. Hazard Vulnerability Analysis
A disaster plan begins with a hazard analysis. From an insurance standpoint disasters are not limited to fires, hurricanes, and earthquakes. A $12,000,000 wrongful death judgment, or a large class-action employment practices lawsuit would be a disaster to most organizations. While conducting a Hazard Vulnerability Analysis as part of your disaster preparedness efforts, all hazards should be considered.
2. Who is an Insured
Insurance policies only insure an entity or person that is specifically included as an insured by the policy. A building is not insured; only the building owner is compensated by a policy for a loss suffered to his/her building.
3. Mitigate both Insurable and Non-Insurable Risks
Some hazards are not insurable or the cost of insurance is so high that an organization might decide to retain the risk associated with that particular hazard. There are other ways, besides insurance, to mitigate the risks associated with a disaster. Lease agreements can be written to mitigate exposure to either a lessor or lessee, for instance
4. Understand How Your Insurance Policy calculates a Loss
Many insureds are unpleasantly surprised by the compensation they receive after suffering a loss because the limits or coinsurance clause in the policy has not been sufficiently explained.
5. Know What Hazards are Excluded by Your Policy
Some insurance companies offer inexpensive premiums and then limit their exposure by adding exclusions to a policy.
6. What are the Notification Requirements Regarding a Potential or Actual Loss
Usually "As Soon As Practicable but no later than 30 days after the insured becomes aware of a loss".
For a more detailed explanation or if you would like to schedule an evaluation of your current insurance policy, contact BRMS.