Opening a new Residential Care Facility for the Elderly (RCFE) requires a lot. You need to find the right property and the right staff. You need to think about how to differentiate yourself from the competition. You need to establish strong resident contracts and processes for care.
With so many moving pieces, insurance might feel like the least of your concerns. And with a good insurance broker, it can be. Still, this is a box you definitely need to make sure you tick. The state of California requires specific types of insurance in order for RCFEs to operate.
Let’s walk through the insurance California RCFE operators need before they can open.
Must have: Liability insurance
The California Health and Safety Code requires all residential care facilities for the elderly to have liability insurance. Specifically, you need to have a
policy with at least these limits:
- $1,000,000 per occurrence
- $3,000,000 annual aggregate
This can get a little tricky, though. Many new RCFE owners get general liability insurance and think they’re covered. Actually, though, the state mandates that RCFE operators have broad protection for any injuries that the facility causes, from a slip and fall on the property to negligence in care.
To meet that requirement, you also need professional liability insurance. That covers you for errors and omissions, improperly administered care, and more.
To get the coverage required by state law, RCFE owners can choose a facility liability policy that blends general liability coverage with professional liability coverage.
While not required by law, you might also consider adding physical and sexual abuse liability coverage into the mix.
Our experienced team can help you determine what types of liability insurance you need and at what limits.
Must have: Workers’ compensation
If you have even one employee, state law requires you to carry workers’ compensation. This policy covers medical care and lost wages if your employee gets hurt while working for you.
This isn’t a requirement for RCFEs in particular. Instead, it’s a must for all business owners operating in California. Fortunately, our team can help you get the lowest rates on the market through our exclusive program.
Sometimes optional, but recommended: Property insurance
While property insurance isn’t required by state law, your insurer, your landlord, your investor, or anyone else peripherally involved in your operation might mandate it. Plus, it’s a key layer of protection for you.
If a fire breaks out or a storm damages your property, commercial property insurance steps in to help cover the cost of rebuilding or repairs. This can cover the medical equipment you have on site, too.
Additional coverages to consider
The above outlines coverages RCFE owners typically need to have in order to operate in California. It doesn’t, however, give you a comprehensive overview of the type of insurance that could help you avoid issues and expenses.
You might also want to consider:
- Commercial auto insurance
- Cyber liability insurance (for data breaches)
- Employment practices liability insurance (to defend you if you get sued for wrongful termination, discrimination, etc.)
- Business interruption insurance (to cover lost revenue if you have to close due to disaster)
- Umbrella insurance (which extends the policy limits of your liability insurance)
Our team has extensive experience helping RCFE owners put the right coverage in place. To talk with us about what coverages and limits best suit your facility, contact our team at InsureMyRCFE at (805) 413-5668 today.
