What post-pandemic coverage looks like for healthcare providers

The word ‘soft’ doesn’t spring to mind when describing the current insurance market for Canada’s healthcare providers. But four years after the start of the COVID-19 pandemic, insurers are becoming more comfortable looking at, and writing, healthcare business.

“We’re having little problem placing coverage for best-in-class healthcare risks in general,” says Mona Krolak, a senior vice president and senior living practice leader at Hub. “So not just senior care, it’s been across the board.”

Beyond best-in-class risk, she describes a transition in which “we’re seeing more markets being curious about the [healthcare] class and looking at certain risks that they hadn’t considered in the last few years.”

A prime example is long-term care, from which insurers stepped away in 2020. She notes markets are now looking at all clients, with best-in-class business easier to place and even challenged accounts being considered. What’s more, the pandemic-era distinction between for-profit and not-for-profit care homes is fading now that more data are available.

“In terms of claims through the pandemic, no one was immune. We saw claims in both the not-for-profit, as well as the for-profit sectors,” Krolak says. “Going forward, markets are scrutinizing what organizations have done to mitigate risk, whether you’re for profit or not for profit.”

Key to those mitigation efforts is prioritization of infection controls, including having people on staff certified in Infection Prevention and Control (IPAC). She notes IPAC certification is now a Ministry of Health requirement. “We continue to see these types of mitigation practices as basic underwriting requirements that all markets have instated,” says Krolak.

Insurers writing in the healthcare space want to ensure a client’s risk management programs and protocols are being followed, and the brokerage is now more involved with management in this class of business.

“Insurers have significantly stepped up inspections of facilities and are offering more risk management [advice]. That’s part of their due diligence,” Krolak says. “If recommendations are made and organizations aren’t interested in investing the time and resources to better the risk, I believe that is a red flag for markets.”

Sometimes, making upgrades based on these due diligence processes is hard, especially if the changes aren’t in a client’s budget. “All of a sudden [they have to] spend the money and it can be a considerable amount. If it’s mechanical systems, sprinklers…the cost can be significant. For cash-strapped organizations, it’s sometimes difficult to spend that money where they don’t feel it’s necessary,” she says.

Krolak says clients are taking these recommendations seriously. They recognize that if they’re not implemented, they may have issues getting coverage.

For example, ventilation systems became a big issue for long-term-care homes during the pandemic. Insurers notice when owners and managers of older buildings continue making upgrades, even when pending redevelopment plans mean those structures will eventually be replaced.

“They continue to make improvements to those buildings where people are living,” Krolak says. “For example, older buildings that had quad rooms housing four people can only house two people now. This shrinks the number of available beds in long-term care. Redevelopment is [important] for the industry. Government recognizes this and is trying to get shovels in the ground for those homes that need to be redeveloped.”

This article is excerpted from one appearing in the April-May 2024 print edition of Canadian Underwriter. Feature image by iStock.com/sasirin pamai