Genesis HealthCare’s insurance provider wants the nursing home giant to pay millions before it covers COVID-19 claims being brought by residents.
National Fire and Marine Insurance Co. on Tuesday filed a complaint for a declaratory judgment in the Eastern District of Pennsylvania asking the court to settle the dispute with Genesis. The filing was first reported by Law360 on Wednesday.
The two parties disagree on whether Genesis must pay one self-insured retention or multiple self-insured retentions before National Fire is obligated to provide coverage for claims and potential claims against the chain by residents who contracted COVID-19.
A self-insured retention is a dollar amount specified in a liability insurance policy that must be paid by the insured before the insurance policy will respond to a loss. Insurers across the nation have been looking to limit their liability and even restricting coverage of nursing homes when it comes to COVID claims, though it’s unclear how broadly the retention argument has been used so far.
Genesis declined a request for comment from McKnight’s Long-Term Care News on the matter.
Genesis argued with National Fire that all claims and potential claims made by residents and former residents who contracted COVID-19 at any of its facilities raised from the same healthcare event, meaning that it will only have to pay one self-retention, court filings said.
National Fire, however, said the differences in each Genesis facility may constitute multiple healthcare events “such that more than one self-insured retention applies,” according to court documents.
Genesis’ primary policy for self-insured retentions for loss and claims expenses requires the chain to pay $3 million per event for all locations (except in Kentucky), $5 million per event for all Kentucky locations, and $160 million aggregate for all locations.
The nursing home provider is currently facing 25 claims or potential claims related to the pandemic, according to court documents. The Pennsylvania-based provider has more than 200 facilities nationwide.
“National Fire respectfully requests that the court enter judgment in favor of [the insurance company] declaring that the known underlying lawsuits and pre-suit claims and potential claims arise from multiple healthcare events and that Genesis must satisfy a self-insured retention for each healthcare event before National Fire is obligated to provide coverage,” the company argued in court documents.