January 1, 2023

Social Services Agencies – Specialty Lines Insurance Markets

The social work profession is noble and founded on service, integrity, and clinical expertise. It can be a stressful and dangerous occupation. The nation is grateful for what you do, AND SO ARE WE! Thank you!

In this article, let us consider your profession and the risks through the eyes of an insurance carrier.

The carriers focus on four major lines of insurance: Property, Casualty, Life, and Health & Disability. Each has actuarial statistical models and decades of detailed loss experience data that predict and support the expected claims losses, benefits, and premiums.

Insurance you buy in connection with your social work profession carries the P&C label in the Property & Casualty line. P&C insurance policies include a wide variety of coverage such as auto, motorcycle, homeowners, travel, boat & marine, business owners, property, and many other categories and include certain liability elements.

Occasionally, a person, practice, or company needs specific insurance coverage not generally covered under typical insurance policies. They may have a coverage need for their particular business or practice, for an antique car, or perhaps for a flood. Flood claims, for example, are most often excluded from property insurance policies, so you need a particular type of insurance policy for that coverage.

Insurance carriers refer to insurance purchased for specific and unique purposes not typically covered under other insurance policies as “Specialty Lines.”

Specialty lines insurance products, created for high or unusual risks, cover risks not covered under regular insurance policies. They have unique specific actuarial statistical analysis and claims loss experience history supporting them that are separate from general lines of insurance. Specialty liability insurance, for example, includes various specialty policies used to fill coverage gaps and exclusions in primary commercial or personal insurance policies.

For your practice in the social worker or psychology profession, Professional liability, and often General Liability and Cyber Liability, are specifically designed for these occupations and are treated as specialty lines by insurance carriers. The shakeup in this insurance market started in 2018 with sizeable social justice lawsuit verdicts and a general increase in claims and lawsuit litigation. As reported in the insurance trade magazine Rough Notes in November 2022, social services agencies’ missions are expanding while their access to insurance is contracting.

As a result, social workers and psychologists were swept up in the medical malpractice risk pool as insurance carriers declined coverage. This substantially increased premiums by double, lowered per-occurrence limits, reduced aggregate limits, raised deductibles, eliminated specific previously covered perils, and imposed lower sub-limits on many covered perils. The result is that you pay much more premium for much less insurance coverage. Similar to when you pay twice as much for a box of cereal, that is half the volume it used to be.

The societal trend is that people are becoming more inclined to care for their loved ones at home and to hire help to care for them instead of placing them in a facility. Further causing insurance carriers to decline coverage or raise premium rates dramatically is the out-of-office lack of “fixed location” risk. Risks from a fixed office are more predictable and lower than the risk exposure when practicing out in the field in various venues.

Therefore, the practitioner comes to the client to provide care, not the other way around in a traditional office setting. The risks expand exponentially when the work moves out of the clinic or from the office to the field under fire. This change of venue, subject to more external threats, increases insurance risk exposure in most categories of perils. Moreover, as social service agencies join with first responders and police regarding domestic dispute incidents, new and more severe risk exposures and perils arise. Many insurance carriers either exit this specialty market entirely or significantly reduce insurance coverage and raise premiums extensively.

At Preferra Insurance Company RRG, an A.M. Best “Excellent” rated insurance carrier operating in all 50 states, we continue to freeze premiums at the lowest levels in the nation and have had no rate hikes. We continue to provide the most comprehensive insurance coverage in all our insurance lines with no deductibles, generous sub-limits, and per-occurrence limits. We also continue to offer $5,000,000 in professional liability aggregate coverage, the highest in the nation.

We are dedicated to our only business, insuring the specialty market of Social Workers, Psychologists, and Allied Health/Behavioral Health professionals. Thank you for your most valued service to people.