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Retirement centers and additional insurance risks

Many retirement centers across the country are registered as sectional title schemes. As such, their building insurance needs are provided for by one of the specialist property insurance products available. A closer look exposes a number of additional risks not readily catered for under the specialist property policies.

One of the most common types of addition risk is that of medical care facilities. This may vary from a complete frail care facility that includes medical staff and treatment facilities to a very rudimentary facility that offers only basic frail care. Medical insurance risks are a specialised field. If the property owners or body corporate are the owners and operators of the medical facilities, they must ensure that suitable insurance cover is put in place. Where the medical facility is out-sourced to a private service provider, the scheme must ensure that the service provider has suitable cover. Where the scheme provides very basic frail care facilities to the residents, they must ensure that all liability risks are catered for. Failure can potentially leave a scheme financially crippled after a liability claim.

Further to the liability risks mentioned above, the scheme must consider insurance cover for the facility’s contents as well as the protection of staff employed by the scheme.

Most retirement centres have additional facilities for their residents. These may include an office, a communal lounge, a library, a kitchen and dining room or an area for social gathering such as a clubhouse or bar. These facilities are normally furnished with contents and additional fittings that are not covered as buildings. The insurance policy can be extended to cover any content losses. If the facility includes a gym or sporting facility, additional measures should be considered to allow for potential liability exposure due to potential injury when people use the facilities.

If food is prepared and served on the insured premises by scheme employees (as opposed to a contractor), the scheme should consider including a food and beverage extension under the scheme’s insurance liability cover. Related to this, is purchasing and storing of dry and perishable food stock. Perishable food stock in a sizable scheme can have quite a high financial value which necessitates insurance against stock loss. If a cold room or freezer stops working, the value of perishables lost may amount to a significant sum.

A lot of insurance requirements for a retirement centre as a sectional title scheme are not automatically included in the specialist policies. It is important that they get advice from experienced and qualified advisors to ensure they purchase insurance that provides them with the depth of cover and financial protection they need.


Author:  Bruce Gibson, Addsure

Contact Addsure – The Leaders in Sectional Title Insurance – for fit and proper advice from advisors who understand Sectional Title. Contact us in Johannesburg (011) 704-3858; Durban (031) 459-1795; Cape Town (021) 551-5069