Resident Trust Fund Coverage
What this clause says
Coverage is extended to include loss of Resident Personal Funds held by the Insured in a fiduciary capacity, including funds held in a resident trust account.
What this actually means
Facilities frequently hold personal funds on behalf of residents in a trust account. CMS requirements at 42 CFR Part 483 govern how those funds must be managed, accounted for, and surety-bonded or otherwise assured for facilities participating in Medicare and Medicaid. A shortfall in that account is both a financial loss and a regulatory violation.
What it means for an operator
This is the coverage gap most likely to be discovered during a survey rather than after a claim. A standard crime form covers loss of the organization's money; funds held for residents are not the organization's money, they are held in a fiduciary capacity, and some forms do not reach them without a specific extension. Meanwhile the regulatory obligation to assure those funds sits on you regardless of what the crime policy says. Confirm the extension is actually endorsed, confirm the limit is sized against the aggregate balance the trust account actually carries rather than a nominal figure, and reconcile that balance regularly, because the reconciliation record is what a surveyor asks for.
How this evaluates
The Policy Checker applies these rules in order; the first match wins.
resident funds covered is set -> Compliant: Resident trust funds are specifically covered. Confirm the limit is sized against the actual aggregate trust account balance. resident funds covered is not set -> Gap: Resident personal funds are held in a fiduciary capacity and are not automatically covered by a standard crime form, while the regulatory obligation to assure them applies regardless.
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Check this term against your own program.
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Common questions about this clause
- Does my policy cover a resident trust fund shortfall?
- What covers a claim that staff financially exploited a resident?
- What insurance does a new assisted living facility need?
- How does a senior care operator lower its workers compensation experience modifier?
- What do underwriters actually want to see in a senior care submission?