In discussing risk in the not-for-profit market, a significant focus is on liability exposures and how to mitigate professional liability and sexual abuse and molestation risks. However, it’s also critical that brokers focus on the various property exposures faced by not-for-profits, including nursing homes, shelters, and others.
Fire is one property exposure to review carefully. New facilities and converted buildings (for example, a hotel converted to a shelter) are built and remodeled in compliance with today’s building codes. These facilities will be equipped with commercial-grade fire doors and NFPA-13-rated sprinkler systems. If a fire breaks out in a nursing home, fire doors, an alarm system, and an NFPA-13 sprinkler system would do a lot to slow the spread of the fire and give firefighters adequate time to put it out.
Older buildings are also generally up to code and subject to regular state and federal inspections. A structure that is not up to code could face significantly more damage as well as state and federal fines. When discussing property exposures, insureds should understand the additional costs involved in rebuilding after a loss to comply with today’s building codes and the need for Ordinance or Law coverage to be included in their Commercial Property insurance program to help cover these costs.
Facilities where residents have various degrees of independence may have increased fire exposure if cooking is permitted. Therefore, it would be worth reviewing the insured’s residential cooking facilities and their rules about who gets to cook, where and when, and what safety measures are in place.
Supply chain issues, materials costs, and labor shortages all impact the need to properly value these properties at the outset.
Weather-Related Hazards, Equipment Breakdown, Business Personal Property, Resident Personal Property, Employee Theft
Not-for-profits face the same “typical” weather-related hazards as other brick-and-mortar operations, including rain, ice, and wind, as well as electrical and structural hazards.
Equipment breakdown is also a critical exposure for nonprofits. Therefore, utility considerations, such as how to operate when essential equipment fails, are an important part of these facilities’ emergency planning process.
In addition, these facilities will own medical-related business personal property. For example, some have hospital beds in the rooms and other equipment and property you would expect to see in a medical facility. This equipment needs to be properly valued and insured. Some facilities may also assume a level of responsibility for the residents’ personal property. It’s more likely that they would ask residents to care for their property and even have a signed waiver of responsibility for damaged property. Discuss with insureds their contractual agreements regarding residents’ personal property and the protocols in place to protect their property from damage or loss.
Employee theft, forgery, and alteration require robust risk-mitigation protocols and coverage to protect the nonprofit’s assets. The risks of fraud and embezzlement extend beyond the loss of an organization’s funds—even a single instance of fraud or embezzlement can jeopardize a nonprofit’s mission by harming the organization’s public reputation and potentially calling an organization’s tax-exempt status into question. As a result, every nonprofit should develop a plan for dealing with suspected fraud or embezzlement before the organization needs it.
Our Property Insurance
Seneca Insurance Companies provides monoline Property insurance for the not-for-profit market, including nursing homes and shelters. Our appetite also includes assisted living facilities, long-term care facilities, independent living communities, and continuing care retirement communities (CCRCs). Seneca Property insurance offers full-limit and primary loss limit policies, employee theft, forgery or alteration, Ordinance or Law, property off premises, property of residents, equipment breakdown, and utility services, among other coverage features.
