Aged care providers face a combination of clinical, professional, property, liability, regulatory, cyber and employment risks that are different from those faced by most other businesses.
Aged Care Insurance is therefore rarely just one policy. A properly structured insurance program for a residential aged care provider may combine Medical Malpractice, Public Liability, Property and Business Interruption, Management Liability, Cyber Insurance, Workers Compensation and other specialist covers.
Mercantile Insurance Brokers can arrange and review insurance programs for residential aged care facilities, nursing homes and aged care organisations throughout Australia.
Our role as your insurance broker is to understand how your organisation operates, identify material exposures and approach insurers that are prepared to insure aged care and healthcare risks.
What Insurance Does an Aged Care Facility Need?
The appropriate insurance program depends on the services provided, number of residents, locations, property values, clinical services, staffing model, use of contractors and overall structure of the organisation.
Typical covers can include:
| Insurance | What It Is Designed to Protect |
|---|---|
| Medical Malpractice / Professional Indemnity | Claims arising from the provision or failure to provide professional, nursing, clinical or care services |
| Public & Products Liability | Third-party bodily injury or property damage claims not arising from excluded professional services |
| Property Insurance / ISR | Buildings, contents, plant and other physical assets against insured events |
| Business Interruption | Loss of income and additional operating costs following insured property damage |
| Management Liability / D&O | Certain claims against directors, officers and the organisation, depending on the policy |
| Statutory Liability | Certain investigation, defence and insurable penalty exposures, subject to policy terms and applicable law |
| Cyber Insurance | Cyber attacks, ransomware, privacy breaches, data loss and associated business interruption |
| Workers Compensation | Workplace injury cover as required under the applicable State or Territory scheme |
| Motor / Fleet Insurance | Vehicles operated by the aged care organisation |
| Machinery Breakdown | Breakdown of specified plant, machinery and electrical equipment |
Not every aged care provider requires every policy above, and the scope of cover varies significantly between insurers.
Medical Malpractice Insurance for Aged Care Providers
Medical Malpractice is one of the most important areas of an aged care insurance program.
A residential aged care organisation can potentially face allegations involving:
- medication errors
- failure to properly monitor a resident
- falls and fall prevention
- pressure injuries
- wound management
- infection management
- failure to recognise deterioration
- failure to escalate a resident’s condition
- nursing care
- nutritional or hydration issues
- manual handling and resident transfers
- dementia and behavioural management
- allegations involving restrictive practices
- failures in clinical documentation or care planning.
The insurance needs to reflect the actual services being delivered by the organisation, rather than relying on a generic description such as “aged care facility”.
Entity Medical Malpractice
It is also important to distinguish between insurance held by individual healthcare practitioners and insurance protecting the aged care organisation itself.
An aged care facility may be named in a claim because of alleged:
- negligence by an employee;
- failure of organisational systems or procedures;
- inadequate supervision;
- failures in clinical governance;
- inappropriate staffing or allocation of responsibilities; or
- vicarious liability for the actions of people delivering services on its behalf.
Individual practitioners carrying their own professional indemnity or medical indemnity insurance does not automatically remove the organisation’s exposure.
We can review how the Medical Malpractice policy treats employees, nurses, allied health professionals, contractors and visiting practitioners.
Does Public Liability Cover Injuries to Aged Care Residents?
Not necessarily.
A Public Liability policy and a Medical Malpractice policy perform different functions.
For example, an injury arising from the maintenance of the premises may potentially involve Public Liability, whereas an allegation that injury resulted from negligent nursing, clinical care, medication management or another professional service may fall within a Medical Malpractice or Professional Indemnity policy.
The interaction between these policies should be reviewed carefully so that professional-services exclusions in the Public Liability policy do not create an unintended insurance gap.
Aged Care Regulation and Insurance Risk
Australia’s aged care regulatory framework has changed significantly.
The Aged Care Act 2024 commenced on 1 November 2025 and introduced a rights-based framework for Australian Government-funded aged care.
Residential aged care providers operate within strengthened Aged Care Quality Standards covering areas including organisational governance, care and services, the care environment, clinical care, food and nutrition and the residential community.
The Serious Incident Response Scheme also imposes incident-management and reporting obligations on aged care providers.
These requirements make it increasingly important that an organisation’s insurance program is considered alongside its:
- governance framework;
- incident management procedures;
- clinical governance;
- complaints processes;
- risk management;
- contractor arrangements;
- employment practices; and
- regulatory obligations.
Insurance does not replace these obligations. However, appropriate insurance can form an important part of the organisation’s broader risk-management strategy.
Management Liability and Directors & Officers Insurance
The governing bodies and senior management of aged care providers carry significant responsibilities.
Depending on the organisation and policy structure, Management Liability or Directors & Officers insurance can provide protection for certain claims made against directors, officers and management.
Cover can potentially include areas such as:
- directors and officers liability;
- employment practices liability;
- certain regulatory investigations;
- defence costs; and
- certain statutory liability exposures.
Policy wording is particularly important. Fines and penalties are not automatically insurable, and some liabilities cannot lawfully be insured.
For larger aged care organisations, a dedicated Directors & Officers Liability policy may be more appropriate than a standard Management Liability package.
Cyber Insurance for Aged Care Providers
Aged care organisations can hold substantial amounts of sensitive personal, health, employee and financial information.
They may also rely heavily on clinical systems, medication systems, rostering, resident-management software, finance systems, email, cloud applications and third-party technology providers.
A cyber incident can therefore create both a privacy exposure and a significant operational problem.
Cyber Insurance can potentially provide cover for:
- ransomware and cyber extortion;
- data breaches;
- privacy incidents;
- forensic investigation costs;
- data restoration;
- cyber incident response;
- notification and crisis-management costs;
- business interruption following an insured cyber event; and
- certain third-party claims.
The exact cover depends upon the insurer and policy wording.
Property and Business Interruption Insurance
Residential aged care facilities can represent substantial property exposures.
Insurance should consider more than simply the replacement value of the building.
Depending on the facility, property exposures may include:
- buildings and fit-out;
- contents and equipment;
- commercial kitchens;
- laundries;
- refrigeration;
- air-conditioning;
- boilers and plant;
- medical and mobility equipment;
- electrical and electronic equipment; and
- other infrastructure required to continue operating the facility.
Business Interruption
Business Interruption insurance is particularly important for aged care because a major property loss may create costs beyond rebuilding the damaged property.
A significant fire or other insured event could potentially require temporary relocation of residents, additional staffing, alternative accommodation, additional transport and other increased operating costs.
The appropriate Business Interruption basis and indemnity period should therefore be assessed carefully rather than simply selecting a standard limit.
Contractors and External Healthcare Practitioners
Most aged care facilities use a combination of employees, contractors and external healthcare professionals.
An insurance review should consider:
- whether contractors are included within relevant policy definitions;
- whether the organisation’s vicarious liability is covered;
- what insurance contractors are required to maintain themselves;
- contractual indemnities;
- labour hire arrangements; and
- visiting medical and allied health practitioners.
Requiring a contractor to carry their own insurance does not necessarily remove every potential liability from the aged care provider.
Claims-Made Insurance – Why Continuity Matters
Medical Malpractice, Professional Indemnity and Management Liability policies are commonly written on a claims-made basis.
This makes continuity of insurance important.
When reviewing or moving insurers, consideration should be given to:
- the retroactive date;
- previously notified circumstances;
- known claims or incidents;
- continuity provisions;
- policy notification requirements; and
- potential run-off requirements.
A lower premium should not be considered in isolation if changing insurers results in a material reduction in continuity or cover.
Why Use an Insurance Broker for Aged Care Insurance?
Insurance for an aged care organisation involves more than obtaining quotes from several insurers.
Mercantile Insurance Brokers can review:
Your Operations
We establish exactly what services the organisation provides and who provides them.
Your Clinical Exposures
We examine the professional and clinical services that may create Medical Malpractice exposures.
Your Policy Wordings
We compare the coverage provided rather than considering premium alone.
Your Property Exposure
We consider buildings, contents, plant, equipment and Business Interruption requirements.
Your Contractors
We review how policies deal with employees, contractors and other healthcare professionals.
Your Management Exposures
We consider the insurance requirements of the organisation, directors and management.
Your Cyber Exposure
We assess the organisation’s dependence on technology and its exposure to sensitive resident and health information.
The objective is to build an insurance program around the actual activities and risks of the aged care organisation.
Aged Care Insurance Australia
Mercantile Insurance Brokers can assist aged care organisations seeking new insurance or reviewing an existing program.
We can assist with insurance for:
- residential aged care facilities;
- nursing homes;
- not-for-profit aged care organisations;
- private aged care operators;
- multi-site aged care groups; and
- organisations providing associated healthcare and aged care services.
If your organisation already has insurance, we can review the existing program to identify material gaps, restrictive exclusions, unusual sub-limits or areas where the cover may no longer reflect the organisation’s operations. Where the aged care organisation itself can be exposed to allegations arising from clinical or care services, Entity Medical Malpractice Insurance should also be considered alongside practitioner arrangements.
Frequently Asked Questions About Aged Care Insurance
What insurance does an aged care facility need?
There is no single policy suitable for every aged care facility. A typical insurance program may include Medical Malpractice, Public Liability, Property and Business Interruption, Management Liability or D&O, Cyber, Workers Compensation, Motor and other covers depending on the organisation’s operations and assets.
What is aged care Medical Malpractice insurance?
Medical Malpractice insurance is designed to respond to certain claims alleging injury or loss arising from professional, nursing, clinical or healthcare services provided by or on behalf of the insured organisation, subject to the individual policy wording.
Does an aged care facility need Medical Malpractice insurance if its nurses have their own insurance?
The organisation can still have its own exposure. Claims may allege negligence by the facility itself, failures in systems or clinical governance, negligence by employees, or vicarious liability for people delivering care on behalf of the organisation.
Does Public Liability cover falls in a nursing home?
It depends on the circumstances and the policy wording. A fall arising from the condition of the premises may be treated differently from a fall allegedly caused by failures in clinical assessment, supervision, care planning or nursing care. The Medical Malpractice and Public Liability policies should be reviewed together.
Does aged care insurance cover medication errors?
Claims alleging injury caused by medication administration or medication management may potentially fall within Medical Malpractice cover, subject to the insured services, exclusions, policy definitions and circumstances of the claim.
Are contractors covered under an aged care provider’s insurance?
Not automatically. Policies differ significantly in their treatment of contractors. The definitions of insured persons, employees and contractors, together with vicarious liability provisions and professional-services clauses, should be checked.
Do aged care providers need Cyber Insurance?
Cyber Insurance is not simply an IT issue. Aged care providers can hold large amounts of sensitive health and personal information and may depend on technology to deliver day-to-day services. Cyber insurance can therefore be an important part of an aged care insurance program.
Request an Aged Care Insurance Review
If you operate a nursing home or residential aged care facility, contact Mercantile Insurance Brokers to discuss your insurance program.
We can review your current policies or approach the insurance market for alternative terms.
Phone: 1300 310 467
Mercantile Insurance Brokers Pty Ltd
ABN 67 632 896 461
Authorised Representative of Community Broker Network Pty Ltd
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