SELF-INSURANCE RESERVES |
9 Months Ended |
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Sep. 30, 2023 | |
| Insurance [Abstract] | |
| SELF-INSURANCE RESERVES | SELF-INSURANCE RESERVES
Medical Self-Insurance Reserves — The Company is primarily self-insured for employee health benefits. The Company records its self-insurance liability based on claims filed and an estimate of claims incurred but not yet reported. There is stop-loss coverage for amounts in excess of $0.2 million per individual per year and a maximum claim liability of $18.0 million. If more claims are made than were estimated or if the costs of actual claims increase beyond what was anticipated, reserves recorded may not be sufficient and additional accruals may be required in future periods. As of September 30, 2023 and December 31, 2022, the Company had reserved $2.8 million and $2.3 million, respectively.
Property and Casualty Reserves — As part of its property management business, the Company arranges for property and casualty risk management for the properties and entities affiliated with the Company (the “Insurance Program”). The Company uses a broker to arrange for insurers to provide coverage deemed necessary by management and required by lenders or property owners. Under the terms of the risk management program, each property has a $25,000 deductible for property and casualty claims for insured events. Insured property losses in excess of $25,000 for multifamily properties and $50,000 of commercial office properties are self-insured or fully insured as described below.
The Risk Management Program for property risks includes a Self-Insured Retention (“SIR”) component in order to more efficiently manage the risks. As of September 30, 2023, the Company’s SIR includes a layer of losses that the Company is responsible for satisfying after the properties have met their $25,000 deductible for each claim. That layer covers losses between $25,000 and $250,000, with an annual aggregate limit of $2.0 million. All multifamily and single-family losses above $250,000 are fully insured. For seniors housing properties, all losses are fully insured after the $50,000 deductible has been met. For commercial office, logistics and net lease properties, all losses are fully insured after the $50,000 deductible has been met. BIGRM, the captive risk management company wholly owned by the Operating Company, provides a $5.0 million insurance policy to cover the following: 100% of the $5.0 million layer above the multifamily deductible and SIR. All losses above $5.0 million are fully insured by multiple outside insurance carriers. Effective June 20, 2023, the per-occurrence limit for any single loss is $1.5 million with the annual aggregate limit increasing from $3.0 million to $5.0 million. All losses above the SIR thresholds are fully insured with the exception of catastrophic loss deductibles in excess of the deductibles outlined above. Catastrophic losses, in zones deemed catastrophic (CAT Zones), such as earthquake, named storm and flood zones, have deductibles that equal up to 5% of the insurable value of the property affected for a particular loss. Any catastrophic losses in non-CAT Zones are insured with the same $25,000/$50,000 deductibles and SIR of $75,000 for multifamily properties as outlined above.
On June 20, 2020, the Company added a general liability SIR aggregate limit of $10.0 million with a per-occurrence limit of $2.0 million and per location limit of $4.0 million, which was increased on June 20, 2022 to a per-occurrence of limit $5.0 million and per location limit of $10.0 million. Any insurance claims above these limits are fully insured by multiple outside insurance carriers. BPM insured this retention with the BIGRM captive. As of September 30, 2023 and December 31, 2022, the Company had reserved $1.1 million. As of September 30, 2023 and December 31, 2022, the total self-insurance reserve liability was $3.9 million and $3.5 million, respectively.
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