If you’re closing up shop at your Residential Care Facility for the Elderly (RCFE), you’re probably already thinking — maybe even dreaming — about what you’ll do next. Don’t focus too much on the future, though. Until your license is officially terminated and you’ve fully closed your doors, you’re still on the hook for a few things.
Specifically, you need to take steps to make sure you’re properly insured during your wind-down and after your closure. We have a few tips to help there.
#1: Keep Policies Active Until You Get Across the Finish Line
Even if your residents have moved out, you don’t want to terminate your insurance policies just yet. There are a couple of policy types that should stay active until you hit specific benchmarks:
- Liability: This kind of coverage is a requirement for your RCFE license. It puts you at risk to terminate your policy before your license is terminated, then. Keeping your coverage in place protects you against getting into any kind of trouble with the Department of Social Services. And it safeguards you if something happens at your facility. If a worker comes in to uninstall equipment, for example, then trips and falls, you could be held liable. Maintaining your liability insurance all the way to the termination of your license protects you.
- Workers’ compensation: You probably wound down your staffing along with your residents. That doesn’t mean you can ditch your workers’ comp coverage just yet, though. If you have even one employee helping you with the closure, state law requires you to keep this policy active.
- Commercial property: Don’t cancel this policy until you’re no longer in control of the building. With less activity there as you wind down operations, it becomes an increasingly enticing option for thieves and vandals.
#2: Collaborate with Your Insurance Agent
Your insurance agent can help you determine the right timing for terminating policies. They may be able to help with coverage you need to keep, too. If you no longer have residents, for example, they might be able to help you get a lower premium on your liability insurance. And with fewer staff members, you should be able to get cheaper workers’ comp.
Working closely with your agent helps you keep the protections you need, comply with state law, and ideally save some money in the process.
#3: Figure Out if You Need Tail Coverage
If your liability policy offers claims-made coverage (versus occurrence coverage), it only protects you while the policy is active. If one of your residents comes back six months from now and sues you for something that happened at your RCFE, you won’t have any protection.
Fortunately, you can defend against this with a specialized type of insurance called tail coverage. This policy extends your reporting period, meaning you have the backing you need if someone tries to hold you liable even after your closure.
Preparing to close an RCFE is already a lot of work. Managing the insurance requirements that come with it doesn’t need to add more to your plate. Our experienced RCFE insurance agents can help you. Contact our team at InsureMyRCFE at (805) 413-5668 today.
