The liability of long-term care facilities: COVID-19’s projected impact

The COVID-19 pandemic could cause large losses for liability insurers covering nursing homes and long-term care facilities, and therefore further tightening of rates, a Canadian managing general agent predicts.

“There are a lot of exposures in the business,” Stephen Stewart, CEO of Stewart Specialty Risk Underwriting Ltd., said in an interview of long-term care facilities. “If it’s not well-managed, then those exposures tend to increase. You’ve got patient-to-patient and staff-to-patient exposures, and these things all need to be managed.”

COVID-19, the disease caused by the novel coronavirus, has killed almost 2,200 people across Canada, with more than half of those deaths being linked to long-term care facilities, Canadian Press reported Friday. Ontario reported 57 more deaths at long-term care facilities Friday; its overall COVID caseload had grown by 5%, including a single-day record jump of 640 cases.

Lawsuits from patients or their families who got  COVID-19 while in the home “is definitely an exposure to insurers who are insuring liability,” said Stewart. “If you believe the headlines – the media stories that we see – there appears to be negligence in some of these cases. So they would certainly attract liability and larger claims and usually when that happens, we see a reaction and tightening of rate.”

Also predicting a rise in claims resulting from COVID-19 is Richard Bogoroch, founder and managing partner of personal injury and medical malpractice law firm Bogoroch & Associates LLP.

“In general, this has heightened awareness of some of the poor care that our elderly population is receiving from some of these homes,” said Bogoroch, a lawyer who has chaired or co-chaired Osgoode Hall Law School’s Professional Development program, Annual Update: Personal Injury Law and Practice, since 2005.

“I think when this all shakes out, we will probably see a continuation of the hard market in all lines and in [the liability for long-term care and nursing home operators] line,” said Stewart. “Because there will be losses, and they will probably be relative large.”

To mitigate the risk, Bogoroch said, “it is very important that every home understand its liability and its risk, and ensures that it has policies and procedures in place which are appropriate, and that they have appropriate staffing to look after the residents in their homes.”

In Ontario, Bogoroch reports, every nursing home, retirement home and long-term care home has obligations to keep all their residents safe. Usually a home will be covered by liability insurance, he said in an interview. Generally medical malpractice will not arise because the negligence is not necessarily negligence in providing medical care. But each case has its unique set of facts.

When Bogoroch & Associates is retained to sue a nursing or retirement home, the lawsuit is generally based on negligence and breach of the Occupiers Liability Act.

Alberta has its own Occupiers Liability Act, notes Erika Carrasco, Calgary-based partner with Field Law, whose specialties include insurance and litigation.

Alberta also has the Protection for Persons in Care Act, which requires service providers to take reasonable steps to protect clients from abuse while providing care or support services. Service providers would include nursing homes, shelters, supportive living settings and hospitals, among others.

In a lawsuit in Alberta, Carrasco said, a question before the court could be: What is the standard of care of a reasonable facility under the circumstances?

Long-term care and nursing homes have polices and procedures as well as legislative requirements. That is where you would look to see whether there was an act or omission that gives rise to liability, she said.

“Where the facility has shown they have done everything possible to follow those polices and procedures – it is unlikely that liability will be found,” said Carrasco.