This article was produced in partnership with Amwins.
Abuse coverage is now among the most challenging lines to place in the healthcare sector. For allied health providers, especially those with pediatric, transport, or residential exposure, where one-on-one interactions or unsupervised care are common, securing this coverage has become not only costly but often limited in scope and availability.
Amid skyrocketing premiums, mounting legal risk, and decreasing carrier appetite, some in the insurance industry are questioning whether abuse liability can continue to exist in its current form at all.
“If you go to industry conferences or listen to panels, there’s a lot of discussion and real concern,” said Jordan Connelly (pictured), executive vice president at Amwins Brokerage. “Will this coverage become uninsurable? Should we carve it out completely from professional liability altogether?”
Historically, abuse coverage was often bundled with professional liability policies, and offered with full limits and little underwriting scrutiny. However, the market has changed drastically.
Healthcare environments with overnight care, like hospitals or nursing homes, have long been viewed as potential sources of abuse claims. But today, the exposure extends far beyond those settings, particularly in sectors involving children or unsupervised interactions.
At the same time, social inflation and legal reforms have eliminated look-back periods in many jurisdictions, meaning plaintiffs can file claims decades after an incident occurs.
The heightened litigation environment has rattled the reinsurance markets, according to Connelly. In particular, London-based reinsurers are increasingly reluctant to support abuse coverage, pressuring carriers to scale back offerings or exit the segment entirely.
“We’re seeing fewer full-limit options and a lot more supplemental coverage,” Connelly said. “Standalone abuse policies exist in the market, but they’re expensive and they often come with limitations.”
Rather than walking away from abuse coverage entirely, many markets are reducing limits through what Connelly calls micro-layering – stacking smaller limits, such as $1 million layers, to build a $5 million tower. But building coverage above that level, especially for large social service organizations or nursing home groups, has become exceedingly difficult, she added.
As the traditional market tightens, healthcare providers are seeking alternative risk transfer strategies. Captives are becoming more common, particularly for more sophisticated clients who can assume a greater portion of the risk internally. Still, Connelly said most allied health providers are responding in simpler ways.
“Right now, the most common solution is scaling back coverage,” she said. “If a client previously had $10 million in abuse limits, they might now carry $2 million or $3 million. That’s all they can afford.”
Other clients are managing cost through large self-insured retentions (SIRs), buffer layers, or co-insurance arrangements. Standalone abuse policies are another option, but there can be gaps, Connelly warned, especially around physical abuse.”
“You need to confirm: Is physical abuse covered under the professional liability policy, or will the general liability respond? That’s where brokers need to dig in,” she said. “There are stand-alone abuse policies that offer physical and sexual abuse, but most of them respond to sexual abuse claims only.”
With underwriting scrutiny tightening, allied health clients must demonstrate strong risk controls to obtain coverage. For those with any history of abuse claims, underwriters want to see documented changes: new protocols, training, and prevention measures and hiring practices
“Even something as simple as transport can pose a risk,” Connelly said. “If you’ve got one EMT in the back of an ambulance with a patient, that’s a potential exposure. One client addressed it by requiring two staff members during all transports.”
Other best practices include background checks (repeated regularly, not just at hiring), social media screening, and physical safeguards such as surveillance cameras and live video feeds. In long-term care settings, some providers now allow family members to log in remotely to monitor loved ones.
“These aren’t foolproof,” said Connelly. “But they show an effort to reduce risk, and that goes a long way with underwriters.”
The growing cost and complexity of abuse coverage are having real financial implications for healthcare providers. For many, the shift has been difficult to understand, especially since abuse was once considered a minor exposure.
That’s where brokers can make a major difference. Connelly advised retail agents to ask smart questions early in the placement process: What is the pediatric exposure? Are there one-on-one care situations? What controls are in place?
At Amwins, the strategy is to get out ahead of the problem. “We’re advising our clients early: this is a tough part of the placement,” she said. “I always tell my team: when you’ve got tough news to deliver, make sure to deliver it early so you can build a plan and keep everyone aligned.”
Whether it’s layering policies, restructuring limits, or identifying specialty markets, the right guidance can help clients navigate an increasingly unforgiving segment of the market.
“Whether we build the coverage with our existing markets or structure it as a standalone policy, we walk them through the options and help compare,” Connelly said. “The key is being proactive; that way, we can plan and win together.”
