November 16, 2018
By Susan Burns and Laurie Moon
The projected paths of the two most recent hurricanes, Florence and later Michael, led several state governors to issue mandatory evacuation orders impacting more than a million people. Many of the coastal senior living communities in Florida, Georgia, the Carolinas and Virginia had to be evacuated for the safety and well-being of their clients, in some cases for both storms. These communities incurred thousands to hundreds of thousands of dollars for evacuation costs in a matter of hours to ensure a timely exodus ahead of the storms. Even now, senior living communities across the west coast are evacuating from the deadly wildfires in California.
Undoubtedly, the unexpected expenses related to moving a community en masse can quickly deplete the financial reserves of the impacted senior living communities. Evacuation Expense Reimbursement coverage can help alleviate some of this financial burden by transferring some or all of the financial risk to third party insurers.
Generally, an “Evacuation” in the long term care setting is defined as the removal of the majority (50% or more) of long term care residents in response to a natural or man-made disaster. Evacuation Expenses are those costs and related expenses for transportation, lodging and providing meals to residents who have been evacuated to a safer location.
Some policies require a mandatory evacuation order by a state or local official to trigger Evacuation Expense Reimbursement coverage, but not all policies have this requirement for coverage to be available. Intended to reimburse insureds for costs related to an evacuation, this coverage can help defray the costs of transportation, temporary housing and food. However, employee salaries, benefits or business interruption are often excluded.
Tips to assist in seeking reimbursement for Evacuation Expenses, (not intended to replace the language in your policy):
- Submit a reimbursement request for the affected community to the insurance carrier in writing during the policy term in which the evacuation occurred or within any applicable extended reporting period to the address contained in the policy.
- Provide copies of all receipts for payments made by the Named Insured pertinent evacuation related costs such as transportation costs, or temporary lodging.
- Include proof of payment of evacuation expenses made by the Named Insured such as transportation costs, or temporary lodging.
There are three key things to keep in mind about Evacuation Reimbursement coverage:
- It is separate from Property Coverage and often seen as an endorsement on General Liability or Professional Liability policy.
- It does not require the occurrence of any property damage to be triggered.
- It is reimbursement coverage so evacuation expenses must be paid first and then submitted for reimbursement.
If your senior living community had to be evacuated due to recent hurricanes, there may be some financial assistance available to assist with Evacuation Expenses related to transportation, temporary lodging and food for your residents. Review your community’s Professional Liability and General Liability policies, particularly the Declarations and Endorsements, to explore if the policy contains Evacuation Expense Reimbursement coverage.
Although this year’s hurricane season is coming to a close, if your community doesn’t have Evacuation Expense Reimbursement coverage, this may be a good time to explore this option with your insurance professional to be more fully prepared for next year.
CREDIT: Susan Burns is Associate Vice President of Specialty Operations, and Laurie Moon is Director of Professional Liability Claims at Sedgwick, a global provider of technology-enabled risk, benefits and integrated business solutions.