Why Do Alcohol and Drug Treatment Centers Need Insurance?

Written by Amber Harper—Commercial Insurance Advisor

October 6, 2022 · 4 minute read

Blog Why Do Alcohol and Drug Treatment Centers Need Insurance?

According to a 2021 report by the Substance Abuse and Mental Health Services Administration (SAMHSA), 45.7 million Americans received either in- or outpatient treatment for mental health or substance use disorders in 2020, an increase from previous years' data.

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With more Americans seeking help, mental health and drug and alcohol treatment centers are starting to ask about their risks. The best way to reduce your treatment center's risk is by having comprehensive commercial insurance.

Is your center insured? What are the risks if your center does not have proper insurance coverage?

Risks of Your Treatment Center Being Uninsured

The most significant risk your drug or alcohol treatment center faces is how you handle the detox process. The detox process poses several safety and liability risks for your employees and patients.

Risk of Malpractice and Negligence Insurance Claims During Detox

Detox is an essential part of the treatment process. However, detox can be challenging and cause mental and physical complications for your patients. Your staff can do everything correctly, and complications can still occur. Therefore, it is essential for your employees to document everything in case a patient files a malpractice or negligence claim.

You'll also want to thoroughly note any preexisting conditions your patients may have as these may affect the detox process. In addition, you should know which substances they've used and for how long to ensure you provide the proper course of treatment.

Due to the risk of complications during detox, such as seizures and infections, you need to have the appropriate amount of staff to properly monitor and quickly treat complications as they arise. Many malpractice and negligence insurance claims by patients in treatment centers result from slow response time, medication interactions, and accidental slips and falls.

Risk of Property Destruction

Property destruction is also a common risk during detox. The detox process affects each patient differently. Sometimes an individual who uses substances and is going through the treatment process may become violent due to paranoia or other mental changes. Seizures may also cause a patient to break equipment. While this property destruction is unintentional, you still must replace the broken equipment.

Patients accidentally destroying property during detox isn't your only risk. There's always a risk of severe weather or vandalism. For example, your facility's roof may collapse due to strong winds, heavy rains, or snow. Similarly, a burst pipe may cause water damage, or a fire might break out due to faulty wiring or a kitchen accident.

Property damage, whether accidental or intentional, can be expensive to fix and can be a financial burden to your treatment facility. In addition, lost, stolen, or broken equipment can also be costly to replace.

Reducing Your Treatment Center's Insurance Risk

No medical professional likes to hear that a patient filed a claim against them. However, everyone working in the medical and treatment field knows there's always a risk. Unfortunately, you can't prevent malpractice or negligence insurance claims, or property damage, but there are steps you can take to reduce your risk of significant financial loss.

One step briefly mentioned above is requiring your employees, such as therapists, doctors, and nurses, to carefully document every part of the treatment process and medications administered. You must also provide the proper training for all your employees and volunteers. Your employees should know what to do when detox complications arise to help prevent malpractice or insurance claims.

Obtain Commercial Insurance Coverage

The best way to prevent significant financial loss and protect your employees, volunteers, and treatment center is by obtaining commercial insurance. There are four main types of insurance that can help your treatment facility:

  1. Property insurance: Can help cover the cost of expensive repairs, restorations, or replacing stolen or broken equipment.

  2. General liability: Can protect your facility if a patient, employee, or volunteer injures themselves while on your center's premises.

  3. Professional liability: Can protect your doctors, nurses, therapists, counselors, and other employees if a patient or their family member files a malpractice or negligence claim.

  4. Workers compensation: Can protect your center if an employee gets hurt at work.

Not every commercial insurance broker completely understands the unique risks treatment centers like yours face. Therefore, it is vital that you find a broker who understands your facility, your insurance needs, and the financial and legal risks your center may face. In addition, your broker should ask specific questions during the enrollment process to ensure they find a coverage plan that meets your needs.

Your broker may ask you about your intake process and whether you require a full medical background and doctor's notes. They may also want to know whether you employ crisis response teams and whether you have a detailed plan if serious detox complications arise.

The best way to protect your treatment center and your employees and volunteers is by purchasing a comprehensive commercial insurance policy from an insurance broker who understands your needs.

Our team at Leavitt Coastal Valley is made up of experienced brokers, underwriters, and administrators who understand the treatment industry and insurance. We take a personalized approach to commercial insurance and get to know your needs and vulnerabilities to find a customizable coverage plan that reduces your risk of financial loss in case of property damage or malpractice claims. We value integrity, transparency, and lasting relationships with our clients.

Let us help you protect your center, employees, volunteers, and patients. As you provide the best care possible for your patients, we will provide the right coverage plan for you.

Learn more about our property and general and professional liability insurance by contacting us at (805) 925-8607.