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Long-term care operators should be wary of increased liability costs following the onset of the COVID-19 pandemic after a new report found that industry is facing increasing loss costs — with the frequency of $1 million-plus claims growing. 

The survey, conducted by London-based insurance company Willis Towers Watson, focused on senior living owners and operators’ general and professional liability claim costs. The report featured responses from 38 companies, 19% of them skilled nursing facilities, and includes data on more than 14,000 claims that have occurred in the United States since 2009. 

Researchers found that loss costs, defined as loss cost per unit of exposure, have steadily increased across the country from 2009 ($391) through 2018 ($590), and claim frequency has increased 4% annually during that same timeframe. 

The drivers of those losses included choking, which had an average severity of $275,000, and resident falls, which had an average severity of $155,000. 

“The falls data raises the question of acuity: how can companies evolve their operations strategy to proactively manage residents’ acuity levels as the industry’s population ages in place,” report authors said. “Some avenues to consider include the use of technology, as appropriate, to assist with supporting resident needs and ensuring staff are properly trained and competencies validated for higher acuity challenges.” 

The industry is going to have to absorb a “huge cost increase” while still reeling from the pandemic, researchers said after digesting the findings.

“The frequency of claims was also increasing and elevating total costs and, based on past healthcare claims experience, this increases the chance of a direct, but lagged, increase in the frequency of claims,” report authors concluded.