Should we stay or should we go? Considering both care and cost

In a disaster, emergency evacuation for long-term care facilities saves lives, not money. Evacuation expense reimbursement coverage may help when there is no question about whether to stay or go.

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 even hundreds of thousands of dollars for evacuation costs in a matter of hours to ensure a timely exodus ahead of the storms. Undoubtedly, the unexpected expenses related to moving a community en masse can quickly deplete financial reserves. 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 residents in response to a natural or man-made disaster. Evacuation expenses are the direct costs related to moving residents to a safer location. Some, but not all, policies require a mandatory evacuation order by a state or local official to trigger evacuation expense reimbursement coverage. While this coverage can help defray the costs of essentials including transportation, temporary housing and food, employee salaries, benefits or business interruption are often excluded.

Although not intended to replace the language in your policy, here are two tips to assist in seeking reimbursement for evacuation expenses:

  • Submit a reimbursement request to the insurance carrier in writing during the policy term in which the evacuation occurred or within any applicable extended reporting period linked to the address covered by the policy
  • Include proof of payment made by the named insured for pertinent evacuation-related costs; provide copies of all receipts for essentials such as transportation or temporary lodging

Additionally, keep these three key things in mind about evacuation reimbursement coverage:

  • It is separate from property coverage and is often seen as an endorsement on your general liability or professional liability policy
  • It does not require the occurrence of any property damage to be triggered
  • As reimbursement coverage, evacuation expenses must be paid first and then submitted for compensation

If your senior living community had to be evacuated due to recent hurricanes, there may be financial assistance available to cover your essential evacuation expenses. Review your professional liability and general liability policies, particularly the declarations and endorsements, to explore if the policy contains evacuation expense reimbursement coverage. 

And while this year’s hurricane season is coming to a close, now is the time to ensure you are fully prepared for future years and catastrophes. If your community doesn’t have evacuation expense reimbursement coverage, explore options with your insurance professional.

Read part 1 of this blog: "Should we stay or should we go? Hurricane preparedness in long-term care"


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