Is it permissible to have a currently self-insured Operator obtain eligible PLI insurance coverage for facilities being submitted to ORCF, but keep the remaining non-FHA insured facilities as self-insured?
It is permissible to have professional liability insurance for the HUD facilities (in compliance with Handbook Section 42321 REV-1, Section II, Production, Appendix 14.1 or its successors) and a different policy for the non-HUD facilities. In general, HUD needs to be assured that a large claim on any facility owned/operated/controlled by a common entity does not threaten the financial viability of the HUD-insured facilities. If there is an operator parent, as defined in Appendix 14.1 II.C, the operator parent must have HUD compliant PLI on all entities that is controls, operates or manages, including facilities that do not have FHA mortgage insurance. Please reference Handbook 4232.1 REV-1, Section II, Production, Appendix 14.1, Sections II.C, IV.B and VII for additional details regarding self-insurance and submission requirements. -- Apr-21