CCRC and life plan
Do we need fiduciary liability separately from D&O?
Yes, and it should be a separate policy rather than a shared sublimit inside D&O. They cover different duties: fiduciary liability addresses ERISA responsibilities for employee benefit plans, while D&O addresses governance of the organization.
A CCRC is a labor-intensive employer running retirement and health plans, which puts the usual fiduciary exposures in play: plan fee reasonableness, investment selection, and the administrative errors that come with onboarding and offboarding a large workforce. ERISA imposes personal liability on the individuals serving as plan fiduciaries, and those individuals are frequently your own executives sitting on a plan committee without having been told that is what they became.
Confirm separately that the ERISA fidelity bond requirement is satisfied. The bond protects plan assets against dishonesty and the liability policy covers breach of duty; they do different jobs and one does not substitute for the other.
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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.
Are volunteer trustees personally exposed?
Yes, on governance decisions about an obligation running decades forward. Many trustees were never told that is what serving involves.
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.
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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