CCRC and life plan
How should the aggregate be structured on a single campus?
Carefully, because the standard answer does not apply. A designated location general aggregate endorsement is the usual fix for a multi-site operator, and on a single campus it does nothing, because the campus is one location.
That matters because a campus with independent living, assisted living, memory care and skilled nursing concentrates four claim profiles at one address, drawing on one annual aggregate. The frequency that aggregate has to absorb is the sum of all four levels of care, not the frequency of the largest one.
Size it against total campus claim frequency over five years rather than against a market default. This is the setting where a thin aggregate is most likely to be tested, and the operator least likely to have modeled it.
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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.
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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