Why do group homes need insurance?
Your clients might have physical disabilities, behavioral problems, or struggle with addiction. That places tremendous liability on your services and staff. Group home insurance can safeguard your financial well-being despite lawsuits, injuries, and other risks of caring for those with complex needs.
Find the right coverage
Insureon helps group homes find insurance quotes that match their unique risks.
Get free expert advice and peace of mind knowing you have the right property and liability coverage for your small business.
What types of business insurance do group homes need?
These insurance policies cover the most common risks of group homes.
General liability insurance
General liability insurance covers basic third-party risks, such as a client tripping on your staircase. Bundle it with commercial property insurance for savings in a business owner’s policy.
- Slip-and-fall accidents
- Damage to a resident's property
- Libel and slander lawsuits
Professional liability insurance
This policy can cover expenses if your group home is sued for negligence, such as an injury caused by lack of supervision. It's also called errors and omissions insurance (E&O).
- Failure to provide promised care
- Accusations of negligence
- Lack of supervision
Business owner’s policy
A business owner's policy, or BOP, is a cost-effective way for policyholders to buy general liability coverage and commercial property insurance together.
- Accidents that cause bodily injury
- Damage to a resident's property
- Damaged or stolen group home property
Directors and officers insurance
Directors and officers insurance (D&O) protects board members against legal expenses if they are sued for a decision made on behalf of your group home that led to financial loss.
- Accusations of mismanaged funds
- Failure to comply with regulations
- Failure to perform official duties
Workers’ compensation insurance
Most states require workers' comp for group homes that have employees. It also protects sole proprietors from work injury costs that health insurance might deny.
- Employee medical expenses
- Disability benefits
- Lawsuits over employee injuries
Commercial auto insurance
Commercial auto insurance can pay for property damage and medical bills in an accident involving your group home's vehicle. Each state has its own requirements for auto liability insurance.
- Property damage caused by your vehicle
- Injuries caused to another person
- Repairs due to vandalism or weather
How much is insurance for a group home?
A small group home will pay less for commercial insurance than a larger company.
Factors that affect business insurance costs during underwriting include:
- Services offered, such as medical care or independent living training
- Business property and equipment
- Business income
- Where your business is located
- Business operations
- Types of insurance purchased
- Policy limits and deductibles
How do I get group home insurance?
It's easy to get group home insurance policies if you have your company information on hand. Our application will ask for basic facts about your business, such as revenue and number of employees. You can buy a policy online and get a certificate of insurance with Insureon in three easy steps:
- Complete a free online application.
- Compare insurance quotes and choose policies.
- Pay for your policy and download a certificate.
Insureon's licensed insurance agents work with top-rated U.S. insurance companies to find the right insurance coverage for your group home's unique needs, whether you work independently or hire employees.
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FAQs about business insurance for group homes
Read answers to frequently asked questions (FAQs) about group home insurance and more.
Does group home insurance cover abuse and molestation claims?
Abuse and molestation claims are often excluded from standard group home insurance policies. Because of the high-risk nature of these allegations, coverage is typically not included automatically.
To be fully protected, group homes may need to purchase a separate abuse and molestation endorsement. This type of coverage can help pay for legal defense costs, settlements, and judgments related to claims of abuse, neglect, or improper conduct involving residents or staff.
It’s important for group home operators to review their policies carefully and work with an insurance professional to ensure this coverage is in place—especially when serving vulnerable populations.
Are there any exclusions in a typical group home liability insurance policy?
In addition to abuse and molestation coverage, most group home liability insurance policies have exclusions, meaning some types of claims aren’t covered and require separate policies or endorsements.
Common exclusions include:
- Intentional or criminal acts: Assault, fraud, or acts of malice aren’t covered because insurance only applies to accidents.
- Employee injuries: Covered by your workers’ compensation insurance policy.
- Professional mistakes: Errors in care or services require professional liability or errors and omissions (E&O) insurance.
- Auto-related claims: Accidents involving business-owned vehicles are covered by commercial auto insurance.
- Property you own: Damage to your own building or equipment falls under commercial property coverage.
Because every policy is different, it’s important for group home operators to review their coverage and add the right endorsements to avoid gaps in protection.
Do I need special insurance if I transport residents?
Yes. If your group home transports residents, you’ll typically need commercial auto insurance. This policy covers accidents involving vehicles used for business purposes, including injuries to passengers and damage to other vehicles or property.
In addition, you may need coverage that protects residents while they’re in your care, custody, or control. Some policies address this through general liability extensions or related endorsements, but it’s important to confirm how your insurer handles situations where residents are being transported or supervised off-site.
Because transporting residents increases your risk exposure, group home operators should review their auto and liability policies carefully and work with an insurance professional to make sure both the vehicle and the people inside it are properly covered.
What factors affect the cost of group home insurance?
Several factors influence how much a group home will pay for insurance. Insurers look at both the property itself and the risks involved in operating the home.
Common cost factors include:
- Location: Local crime rates, weather risks, and state regulations can affect pricing
- Building age and condition: Older or poorly maintained buildings usually cost more to insure
- Size of the company and building: Larger homes with more space and operations have higher risk exposure
- Services offered: Homes providing medical, behavioral, or specialized care often face higher premiums
- Number of residents: More residents typically means more liability risk
- Staff size: A larger staff increases employment-related and liability exposures
- Coverage limits and deductibles: Higher limits and lower deductibles usually increase the premium
- Claims history: Prior insurance claims can raise your rates
Because every group home is different, the best way to control costs is to tailor coverage to your specific needs and work with an insurance professional to avoid paying for coverage you don’t need or missing coverage you do.
What other types of insurance should group homes carry?
In addition to general liability and professional liability, group homes often need several other types of insurance as part of their risk management plan to fully protect their operations and finances, such as:
- Commercial property insurance covers damage to the building, furniture, equipment, and other business property from events like fire, theft, or storms.
- Directors and officers (D&O) insurance protects board members and leaders from claims related to management decisions, governance issues, or financial mismanagement.
- Business interruption insurance, also called business income coverage, helps replace lost income and pay ongoing expenses if the group home must temporarily close due to a covered loss.
- Commercial umbrella insurance provides extra liability limits on top of your general liability, commercial auto, or employer's liability insurance for large or unexpected claims.
Carrying the right mix of policies helps group homes stay financially stable and continue providing care even after a serious incident.