$2M Professional Liability (E&O) Insurance for Senior Placement Agencies

Senior placement agencies asked by a hospital, health plan or senior living operator for $2M usually need a policy that pays up to $2M per claim, so check both numbers on your limit.

What does a $2M requirement mean for senior placement agencies?

Professional Liability (E&O, short for Errors and Omissions) covers claims that your advice or services caused a client a financial loss. Whether a claim that a resident was hurt at a community you recommended is covered depends on the policy wording, because many forms limit bodily injury. A $2M clause might read like this:

• Per claim: the most the policy pays for any one claim. Here, $2M.
• Aggregate: the most the policy pays for all claims in one policy year. See Professional Liability limits explained.
• Claims-made: Professional Liability almost always covers claims made and reported while the policy is active, for work on or after the retroactive date (the earliest date of work covered). See claims-made vs occurrence.
• Defense costs: many policies pay defense costs inside the limit, so legal fees reduce what is left for claims.

Who asks senior placement agencies for $2M?

Most small agencies and solo advisors carry $1M (see $1M Professional Liability for senior placement agencies). $2M sometimes appears when the partner is larger or the work is closer to health care:

• Hospital discharge planning teams that keep a list of approved referral partners.
• Health plans that refer members to you for housing help.
• Large senior living operators that sign referral fee agreements.

How is $2M built?

At $2M, the limit is usually one primary policy (the policy that pays first) written at $2M/$2M. Placement agencies are usually not health care providers, so many buy Miscellaneous Professional Liability, a general form for advice and referral businesses. If your advisors do clinical care assessments, a carrier may ask about forms made for health care workers instead.

A $1M primary plus a $1M excess layer (extra limit that pays after the primary is used up) can also work. The excess should follow form, meaning it uses the same terms as the primary. Confirm with the client that primary plus follow-form excess meets the clause. A commercial umbrella almost never covers Professional Liability. Clients usually cannot be added as an additional insured, and some carriers make exceptions when a contract requires it, so say so when you request quotes. Many clients ask for a certificate of insurance (a one-page summary of your coverage) instead.

If a client asks for more than $2M, see $3M Professional Liability for senior placement agencies. Limits of $3M and above are rarely found online and usually need a broker. Morrow can help you find it.

What will underwriters ask for?

An underwriter is the person at the insurer who decides whether to offer coverage and on what terms. For a placement agency at $2M, expect questions like these:

• Your services: tours, care needs assessments, help with benefits such as Medicaid or veterans programs, moving help, or online referrals only.
• Who does the assessments, and any licenses your advisors hold.
• How you are paid. Many agencies earn referral fees from communities, so expect questions on how you disclose them to families.
• How you vet communities, such as reading state inspection reports and touring.
• Placements per year, revenue, and memory care share.
• Prior claims, complaints, and your current policy and retroactive date.

What affects the cost?

• Service mix. Clinical assessments and benefits advice usually raise risk compared with referrals only.
• Size and volume. More placements and more revenue mean more chances for a claim.
• Written agreements. Signed agreements with clear fee disclosure can help.
• Claims history. Prior claims can raise the price or narrow options.
• Limit and retention. A higher limit usually costs more. A higher retention (the amount you pay on each claim before the policy pays) usually lowers the premium.

Frequently asked questions

My hospital contract says $2M. Is a $1M/$2M policy enough for my senior placement agency?

Usually not. A $1M/$2M policy pays up to $1M per claim, so a $2M per claim clause is not met. Send Morrow the clause and your current policy. We can request $2M quotes and ask carriers to keep your prior acts coverage (coverage for work done before the new policy starts) where the market allows. Start the new policy by the date the agreement requires, and keep your current policy until then. Report anything that could become a claim to your current carrier before it ends.

Do I need medical malpractice insurance as a senior placement agency?

Usually not. Medical malpractice insurance is written for licensed providers who give care. An agency that only refers and advises often buys Professional Liability instead. If your staff give clinical care, tell the underwriter.

Is General Liability enough for a senior placement agency?

Usually not. General Liability covers things like a visitor tripping in your office. It often does not cover a claim that your advice was wrong, but your policy wording decides.

What happens to my coverage if I close my senior placement agency?

A claim first made after the policy ends is generally not covered. A tail, or extended reporting period, can cover those claims if they come from past placements, and it usually has to be bought within a short window after the policy ends.

This article is general information, not legal advice or a coverage determination. Coverage depends on the actual policy wording, carrier underwriting and your contract terms.