When you want to insure a property that’s already functioning as a Residential Care Facility for the Elderly (RCFE), the boxes to tick are fairly standard. You’ll need a general liability policy to defend your facility against its legal exposures, for example, and commercial coverage for the property itself.
If you’re thinking about building your RCFE, things are different. Constructing your own facility gives you a high level of control and lets you tailor it to your anticipated resident and business needs. But it also changes your insurance requirements.
To help you properly protect your property through all the phases of construction, let’s look at the coverage you might need at each stage.
Insurance Required During Construction
During construction, you want to protect your jobsite and the materials you’re storing on it. For that, your best bet is usually a builder’s risk policy. This helps you if someone steals from your jobsite or a fire breaks out in your partially built facility.
As the need for builder’s risk coverage suggests, construction is often not linear. Even if you have a thorough project plan, anything from material shortages to permitting delays could get in the way.
That might result in what insurance experts call delayed occupancy, meaning you can’t get into and start running your RCFE when you had originally planned. Your insurance agent can help you manage your risks here. If you’re promising beds to residents by a certain date, having additional coverages can help. Extra expense coverage, for example, pays out if you face costs to minimize delays after a covered loss (e.g., fire, theft).
There are a lot of unknowns that come with building your own RCFE. Talking with your insurance agent can help you manage them — and minimize any financial fallout as a result of them.
Insurance Leading Up To When You Start Admitting Your Residents
You might have anticipated some RCFE insurance differences during construction. They don’t stop there, though. Because your facility is new, it comes with some insurance considerations that an established facility won’t.
With a newly built RCFE, there’s no record of claims to evaluate or proof of historical compliance with state code. Insurers are essentially flying blind in trying to assign you a risk level — something they don’t love. You can take steps to help here, like:
- Securing your state license as quickly as possible
- Installing risk mitigation measures like a robust fire suppression system
- Minimizing the risk of incidents on site with thorough staff training and compliance with the Americans with Disability Act (ADA)
Start working with your insurance agent early to identify areas where you can potentially increase your coverage options or lower your premiums.
Then, make commercial property and general liability insurance your top priority. You’ll want both of those ready as soon as construction wraps up.
Before you start accepting residents, put additional coverages in place to defend against the risks they bring. Your new RCFE would probably benefit from both professional liability and physical and sexual abuse liability policies.
A seasoned RCFE insurance agent — like one from our team — can help you understand the differences with a newly constructed RCFE versus an existing one. For guidance during and after construction, contact our team at InsureMyRCFE at (805) 413-5668
