Tackling coverage issues for substance abuse centers

Substance addition treatment centers come in all forms, and for insurance agents that may be new to the class, there are many things to know

Substance (Alcohol and Drug) Addiction is treated in specialized drug and alcohol rehabilitation programs and affiliated mental health centers. No single drug treatment is appropriate for all individuals as treatment approaches and individual programs continue to evolve. Today there are hundreds of these facility types in existence to battle the blight of these addictions which affect all age groups and walks of society. Individuals with a drug addiction or drinking problem have a wealth of different options available to them for treatment. Various treatment facility type options represent viable target classes for commercial insurance program business in the non-profit area.

In view of the many risks presented and professional services rendered, it is extremely important that these client-based facility types be adequately insured for all exposures. This would include insuring property assets to value as well as protecting the entity, along with employees and volunteers against potential liability/medical malpractice claims. Target facility types that may fall under the "umbrella" of Drug and Alcohol Treatment services include:
  • Sober Living Homes
  • Abuse Counseling Centers
  • Extended Care Rehabilitation Centers
  • Holistic drug and Alcohol Treatment Centers
  • Teen and Adolescent Treatment Centers/Teen Challenge Treatment Programs
  • Women and Men Gender Specific Treatment Centers
  • Addiction Recovery Center
  • Substance Abuse Facilities
As agents and brokers market these facilities; they find coverage is written primarily on an admitted basis. The general and professional liability coverage can also be written occurrence or claims made. However, the more difficult exposures, and those risks with loss problems can find their general and professional liability and abuse written claims made. Many risks in this segment have premiums in the middle market and above range.

A Comprehensive Insurance Program for these various facility types would include a general insurance coverage portfolio of the following:

Property Coverage - Many of these facilities have a residential component, so good property capacity is a priority
  • Building and Personal Property
  • Business Income/Interruption
  • Equipment Breakdown
  • Electronic Data Processing
  • Crime Coverage
  • Equipment Floaters
  • Miscellaneous Inland Marine Coverage

General Liability Coverage
  • Occurrence Form/Claims-made Form - Limit 1,000,000/3,000,000
  • Sexual and Physical Abuse Liability - Limit should be in addition to the General Liability limit
  • Personal and Advertising Injury Liability
  • Employee Benefits Liability
  • Medical Payments Coverage
  • Damage to rented premises

Professional Liability Coverage
  • Occurrence form/Claims-Made form - Limit = 1,000,000/3,000,000
  • Including employees and volunteers as insured

Auto Liability and Physical Damage Coverage
  • Liability limit available - 1 mil c/s/l -- (fleet/non-fleet)
  • Including Hired and Non-Owned Auto Covs.
  • Including Employees and Volunteers
  • Drive Other Car Coverage available

Umbrella/Excess Liability Limits
  • Strong umbrella or excess limits need to be available to accommodate larger risks.
  • Obtain a following form for General Liability/Professional Liability /Auto Liability/Employers Liability/Abuse and Molestation if possible

NIF Group, Inc. exclusively underwrites a comprehensive insurance program for Substance Abuse Centers for Liberty Mutual.  Please contact Paul Orlando – [email protected] for additional information on the program.

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