CCRC and life plan
Are volunteer trustees personally exposed?
Yes. Many life plan communities are nonprofit and governed by volunteer trustees drawn from the local community, and those individuals carry personal exposure for decisions about reserves, refund funding, disclosure and financial oversight.
The obligation they are governing runs decades into the future, which means decisions made in one board term are judged against outcomes in another. That is precisely the pattern that produces claims against people who thought they were doing community service.
Two protections matter. Directors and officers coverage sized against the obligation, with entity coverage and an innocent insured carve-back. And an indemnification provision in the bylaws that actually works, because D&O coverage is frequently structured around the assumption that the entity indemnifies first.
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More ccrc and life plan questions
What insurance exposure do refundable entrance fees create?
Residents holding refundable entrance fees are creditors as well as residents, which produces directors and officers claims the liability program will not answer.
Do our bond covenants dictate our insurance?
Frequently yes. Tax-exempt bond documents carry insurance covenants the same way a HUD loan or a REIT lease does, and the program drifts away from them annually.
How should the aggregate be structured on a single campus?
A per location endorsement does nothing on a campus, because the campus is one location. Size the aggregate against the whole campus claim frequency instead.
Does one policy cover all our levels of care?
It should, and the term that decides it is the professional services definition. A resident who transitions between levels should not transition out of coverage.
Do we need fiduciary liability separately from D&O?
Yes. Fiduciary covers ERISA duties for the benefit plans; D&O covers governance of the organization. Sharing a sublimit means one exhausts the other.
How do resident trust funds work at a CCRC?
The balances are larger than at a standalone facility, and the funds are held in a fiduciary capacity that a standard crime form does not necessarily reach.
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