Top 5 Insurance Mistakes Senior Placement Agents Make (And How to Avoid Them)

As a senior placement agent, your role is all about trust — families count on you to guide them through critical care decisions. But when it comes to protecting your own business, many agents unintentionally leave themselves exposed by misunderstanding or underestimating their insurance needs.

Whether you're a solo operator or run a growing referral agency, the wrong insurance setup could jeopardize everything you’ve built.

Below, we break down five of the most common insurance mistakes we see senior placement agents make — and how to avoid each one.

1. Confusing E&O with General Liability

A major misconception in the industry is that a general liability (GL) policy is enough to cover all professional exposures. It’s not.

General liability only protects against bodily injury and property damage — like if a visitor trips in your office.

But Errors & Omissions (E&O) or professional liability insurance is what actually protects you from claims that your recommendation, advice, or referral caused financial harm — the core of your business.

👉 Learn more about the difference in our breakdown: Senior Placement Agent Liability Insurance: Errors & Omissions vs Professional Liability

2. Assuming the Facility’s Insurance Covers You

Some agents believe that the senior living communities they refer to will “cover them” under their own insurance. That’s rarely the case.

Facilities have coverage for their operations — not yours. And even if you’re listed as a referral partner, you’re still operating independently. If a family sues you for a bad placement or oversight, the facility’s policy won’t come to your defense.

💡Tip: You need your own standalone policy, no matter how close your relationship is with the facilities.

3. Using the Wrong Business Classification Code

Insurance pricing and eligibility are determined in part by how your operations are classified. If you’re miscategorized — for example, listed as a home care provider instead of a placement agent — you could face:

• Higher premiums

• Denied claims

• Non-renewals

This is especially common if you're working with a broker who doesn’t specialize in senior placement insurance.

🔗 Our guide explains this risk: Protect Your Senior Placement Business: The Importance of Class Codes and Description of Operations

4. Letting Coverage Lapse Between Clients or Referrals

Some agents take out coverage temporarily or cancel during “slow” seasons to save money. But that opens up a dangerous gap.

Most professional liability policies are claims-made, meaning you need to have an active policy both when the incident occurred and when the claim is filed. A lapse, even for a few months, could cost you everything.

💡Even if you only refer occasionally, continuous coverage is the safest (and often most affordable) strategy.

5. Underinsuring to Save a Few Dollars

It’s tempting to reduce your limits of liability to cut costs. But ask yourself — what would it cost to defend a lawsuit, even if you’ve done nothing wrong?

Many agents choose $1M/$3M coverage because it offers the right balance between premium and protection.

To see sample pricing based on your location and business model, check out:

👉 How Much Does Senior Placement Agent Insurance Cost?

Final Thoughts: Get Covered the Right Way

Insurance for senior placement agents isn’t one-size-fits-all. But avoiding these five mistakes can go a long way toward protecting your livelihood and your reputation.

At CarePro Insurance, we specialize in professional liability for placement professionals — and we make it easy to get a policy designed just for your business.

👉 Visit our Senior Placement Agents page to learn more or request a quote today.