Abuse coverage for healthcare providers is facing serious challenges. This issue has become a hot topic among industry experts, particularly for those working with children or in environments that allow for unsupervised care. The rising costs and limited options for this type of insurance are making it increasingly difficult for providers to secure adequate coverage.
As of August 2025, professionals in the insurance field are expressing concern about the future of abuse liability coverage. Jordan Connelly, an executive vice president at Amwins Brokerage, highlighted the anxiety at industry conferences. Many are asking if this type of coverage can continue to exist in its current form, with some suggesting it may need to be completely separated from professional liability insurance.
Historically, abuse coverage was often included in professional liability policies with few questions asked. However, the landscape has shifted dramatically. Now, healthcare settings that provide overnight care, such as hospitals and nursing homes, are not the only places at risk. The exposure now extends to various sectors, especially those involving children or situations where staff may be alone with clients.
Legal changes have also played a role. Many jurisdictions have removed look-back periods, allowing claims to be filed many years after incidents occur. This has led to a more litigious environment, causing reinsurers, especially in London, to become wary of supporting abuse coverage. As a result, insurance carriers are either scaling back their offerings or exiting the market entirely.
Connelly noted that there are fewer options for full-limit coverage, with many providers now relying on supplemental coverage. While standalone abuse policies are available, they often come with high costs and strict limitations.
To adapt to these changes, many insurance markets are opting for a strategy called micro-layering. This involves stacking smaller coverage limits to create a larger overall limit. However, obtaining sufficient coverage for larger organizations, such as social service agencies or nursing homes, has become increasingly difficult.
Healthcare providers are now looking for alternative ways to manage risk. Captives, or self-insured groups, are becoming more common among those who can handle more risk internally. However, many providers are simply reducing their coverage limits due to cost constraints. A client who once had $10 million in coverage might now only afford $2 million or $3 million.
Additionally, some clients are managing their costs through large self-insured retentions or co-insurance arrangements. Standalone abuse policies can fill gaps, but they often only cover specific types of abuse, typically sexual abuse, leaving physical abuse potentially uncovered.
To secure coverage, allied health clients must show strong risk management practices. Underwriters are looking for evidence of measures taken to prevent abuse, such as new protocols and training. Even simple actions, like requiring two staff members during transport, can help reduce risk.
Best practices also include regular background checks and monitoring through technology, like surveillance cameras. While these measures are not foolproof, they demonstrate a commitment to safety, which can positively influence underwriters.
The financial implications of these changes are significant for healthcare providers. Many are struggling to understand why what was once a minor concern has now become a major issue. Brokers play a crucial role in this process by asking important questions early on, helping clients identify their risks and coverage needs.
Amwins emphasizes the importance of proactive communication. By addressing potential challenges early, brokers can help clients plan effectively and ensure they have the necessary support. Whether it involves layering policies or identifying specialty markets, the right guidance is essential in this challenging insurance landscape.