Falls and wounds are the most common drivers of general liability claim losses for long-term care providers, according to a new report.
Marsh, a global professional services firm specializing in insurance and risk management, released its 2024 General and Professional Liability Benchmark Report for long-term care and senior living providers last week. The largest study of its kind, the annual survey included an analysis of nearly 10,300 closed claims totaling approximately $1.8 billion in paid indemnity and expenses over the past 10 years.
John Atkinson, managing director and chairman of Marsh Chicago, said they prepare the annual report because of the concerns of nursing home and senior living providers about some negative trends in litigation in recent years and ways they can help manage risk.
“I think it’s fair to say that the industry has been asking for this kind of perspective, not only from a cost standpoint, but from a risk management standpoint,” he said.
Cost drivers
Falls continue to be the largest driver of claims, accounting for nearly 50% of the claims paid by long-term care facilities and more than 70% at senior living facilities over the past 10 years, according to the report.
In long-term care facilities, there were 1,840 fall claims for residents closed with an estimated total loss of $448.8 million. Wounds/skin injuries were second with 773 claims closed with an estimated total cost of more than $220 million, followed by infections with 461 claims for a total cost of $153.1 million.
Meanwhile, falls, abuse and skin/wound injuries were the leading cause of payouts at senior living facilities.
“It’s no surprise that falls continue to be the primary loss driver for both senior living and long-term care providers, or that wounds are the second primary loss driver for long-term care providers given the acuity of the residents admitted and retained in that setting,” according to the report authors’ summary on the Marsh website.
“What is concerning, however, is the significant number of wound claims shown for senior living providers,” it added. “This result emphasizes the importance of understanding these claims and implementing proactive risk management processes to identify and manage residents who develop (or are admitted with) wounds.”
The analysis also includes a state-by-state breakdown of claim frequency, severity and loss rate.
Atkinson noted that a number of states tend to have higher numbers of claims and the cost of litigation in some jurisdictions is significantly higher.
Kentucky, Florida and California had the highest loss rates by state for long-term care providers, while Florida, California and Illinois had the highest loss rates for senior living providers, the report found.
While final numbers aren’t yet available for 2024, the report projects a 0.3% increase in the frequency of claims for long-term care facilities and a 3.7% increase in claim severity. Long-term care facilities were expected to see a 4% increase in their loss rates in 2024.
