Some owners of Residential Care Facilities for the Elderly (RCFEs) choose to lease the facilities they need rather than buy real estate. Leasing certainly comes with benefits. Maintaining the property falls to the landlord, not to you. And if your RCFE grows, it’s generally easier to relocate to a different, larger location.
Establishing the lease agreement can be somewhat tricky, though. Once the landlord learns about the intended use of the property, they might have some concerns about the risks that come with caring for the elderly. Fortunately, putting the right insurance in place goes a long way toward easing minds and protecting everyone involved.
Plus, some landlords require leasing RCFEs to hand over a certificate of insurance (COI) periodically. With the right policies in place, providing this proof of coverage is relatively easy.
There are two big categories of insurance that landlords usually require from RCFE owners:
#1: General Liability Insurance
Most commercial leases require this kind of coverage from the lessee. It steps in to cover claims (notably, legal expenses) if someone gets hurt or something gets damaged and another party tries to blame the RCFE for it.
Whether you lease or own your facility, all RCFE owners benefit from general liability insurance. If a resident slips and falls on-site, for example, this policy can help you cover the cost of a lawyer defending you if the resident’s family sues you for the incident.
In most cases, your landlord will require you to list them as an “additional insured” on the general liability policy. This way, if they get pulled into the lawsuit as the property owner, your policy will protect them, too.
Your RCFE insurance agent can help you get the landlord added as a named insured to satisfy the requirements of your lease. They can also review the policy language to be sure things are set up properly. It’s valid to cover the landlord against risk relating to your operation, but you don’t want to end up paying for their own negligence, for example. An experienced agent can help you there.
Commercial Property Insurance
To protect your RCFE, you’ll generally need commercial property insurance. While the landlord’s policy protects the land and the permanent structures on it, you’ll store plenty of assets on site. Your own property insurance policy protects you if a fire breaks out and damages or destroys medical equipment, furniture, and your residents’ belongings, for example. Having your own policy in place should make it clear-cut if you experience a covered disaster.
Here, it’s important to be on the same page as your landlord. You want your policy to pick up where theirs ends so you don’t have any gaps in coverage. If you build out the space to better run your RCFE, for example, make sure you know whose policy covers that improvement.
Getting the insurance your landlord requires — and making sure it offers your RCFE strong protections — shouldn’t be hard. For help establishing coverage and making sure it aligns with your landlord’s requirements and your facilities risk exposure, contact our team at InsureMyRCFE at (805) 413-5668.
