What insurance does a senior living expansion or renovation need?

Builders risk on the construction value, written on a completed value basis for the term of the project plus a realistic extension, because senior living projects routinely run long. Confirm whether the policy or the contractor provides it and make sure it is only provided once.

Delay in completion, sometimes called soft costs, covering continuing interest, additional financing cost and lost revenue if a covered loss pushes the opening date. For a project financed against projected census this is often the largest financial exposure in the whole build.

Liability for the construction activity, which sits with the contractor, with you as additional insured on both ongoing and completed operations. Completed operations is the one that matters years later when a defect surfaces.

And confirmation that your own general and professional liability continues to respond to residents in the occupied portion of the building throughout, which is not automatic when part of the schedule is under construction.

Renovating an occupied senior living building creates a set of hazards the ordinary construction risk model does not price: dust and infection control for immunocompromised residents, noise and disruption affecting dementia residents, temporary egress changes that interact with elopement risk, and utility interruptions affecting oxygen, refrigerated medication and nurse call.

Each of those has produced claims. The infection control one in particular has a documented pathway through construction-related fungal exposure in health care buildings, which is why an infection control risk assessment is a standard requirement for health care construction and a reasonable thing for an underwriter to ask about.

Require the contractor to carry general liability with limits that match the project, name you and the lender as additional insureds on a form providing ongoing and completed operations, provide primary and noncontributory wording, and waive subrogation. Require a performance bond where the lender requires one, and require the same of major subcontractors.

Then require an infection control plan, a temporary egress plan approved by the fire authority, a utility interruption protocol, and a daily coordination point with your administrator. Those obligations belong in the construction contract, because after a loss the question is what the contractor agreed to do rather than what everyone intended.

Tell the carrier before the work begins. A material change to the premises is normally a notice obligation, and a builders risk placed after a loss is not a builders risk.

Then confirm the licensure consequence of adding beds or changing bed type, since a license amendment often carries its own insurance evidence requirement, and confirm the new square footage and replacement cost value are on the property schedule the day the building is accepted rather than at the next renewal.