Insurance Costs Soar Across Senior Care, Pressuring Nursing Home Operators
The average payment for senior care liability claims doubled in the decade ending in 2024, with skilled nursing and other higher-acuity settings facing the highest increases. (Source: Fotor AI)
The global senior care industry is facing unprecedented financial pressure as liability insurance costs for elder care providers have doubled over the past decade, according to Liberty Mutual’s recently released 2025 Senior Care Claims Study. The report, which analyzed 2,500 closed claims across a 12-year period, revealed that among all care settings, skilled nursing facilities (SNFs) are bearing the heaviest burden due to higher claim severity and complexity.
Insurance Claims Soar Across Senior Care Markets
A comprehensive review of 2,500 closed insurance claims from 2012 to 2024 reveals that the average claim payout in senior care has reached USD 226,028, with skilled nursing facilities reporting the steepest costs at USD 210,000 per incident. Assisted living communities and independent living facilities also faced rising costs, averaging USD 159,000 and USD 74,000 per claim, respectively.
The surge in liability costs is largely attributed to increased legal risks, complex care needs, and rising incidents of injuries such as falls and pressure ulcers. These factors are reshaping the global elder care insurance landscape, forcing operators to reevaluate risk management strategies and insurance coverage levels.
Falls and Pressure Ulcers Remain Top Cost Drivers
Falls remain the leading cause of claims volume across all care types, accounting for 45% of total claims. However, pressure ulcers, abuse allegations, and resident elopements (unattended departures) are driving up the cost per claim significantly, especially in skilled nursing settings where residents often suffer from multiple chronic conditions.
The report shows that claims involving failure to treat or prevent pressure ulcers and resident abuse result in the highest indemnity payouts, highlighting the critical need for proactive care, comprehensive staff training, and strict adherence to safety protocols.
Wrongful Death and Abuse Allegations Increase Financial Exposure
A striking 40% of closed claims included wrongful death allegations, significantly impacting claim frequency and severity. Abuse-related claims carried the highest average costs, with independent living facilities seeing payouts as high as USD 568,000 per case, underlining the perception of preventability in these environments.
These trends are pushing insurance providers to adjust premiums and coverage conditions, while elder care operators are urged to invest more heavily in resident monitoring systems, care plan documentation, and employee screening and training programs to mitigate risk.
Impact on Global Senior Care Markets
The rapid escalation in liability costs is expected to influence senior care insurance markets worldwide, especially in regions facing aging populations and increased demand for long-term care services. Operators in North America, Europe, and Asia-Pacific are likely to face tighter insurance terms, rising premiums, and greater scrutiny of care practices.
For investors, insurers, and elder care providers, these findings underscore the importance of developing robust risk management frameworks and adopting advanced care technologies to reduce exposure and improve resident outcomes.
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