Running a Residential Care Facility for the Elderly (RCFE) can be a way to make a positive impact on the lives of your residents while creating a steady income stream for yourself. It’s a win-win, but it does come with its fair share of challenges.
To start, you need to decide if you want to own or lease the property. Owning comes with some upside like building equity and the freedom to adjust the property to your and your residents’ needs. But with all of the demands of running an RCFE, shifting some responsibility for property maintenance to a landlord can be a boon.
Whichever route you go, you want to be ready for the unexpected. That means being properly insured. Since the types of policies you need vary depending on whether you rent or own your RCFE, it’s worth a deeper look.
What changes: insuring the property
Specifically, insuring a rented property means choosing different coverage than if you’re insuring an owned RCFE. Let’s look at what each camp needs to safeguard against the unexpected.
If you own
If you’ve decided to set a long-term foundation under you by buying your residential care facility, you need to insure it. A homeowners insurance policy won’t do it. When you run a business out of the property, it comes with additional risk exposures. As a result, insurance providers require a specialized type of policy.
You can safeguard your facility and the things you store in it with commercial property coverage. This policy steps in if you face a variety of issues, including:
- Fire
- Storm damage
- Theft
- Vandalism
- Burst water pipes
Commercial property insurance insures the structure of your RCFE, helping you rebuild in the event of a disaster. But it also protects the property you store on site, from the furniture to the medical equipment you use to care for your residents.
If you rent
Just because you rent doesn’t mean you’re fully covered here. While your landlord’s policy will protect the building of your RCFE, it doesn’t protect your belongings in it.
To cover everything from medical equipment and technology like computers to furniture and beds you provide for your residents, you need a tenant’s commercial property policy. Also called business personal property insurance, this coverage picks up where your landlord’s policy leaves off.
What doesn’t change: your liability exposure
Whether you lease or own your RCFE, one thing doesn’t change: your exposure to risk. If a resident falls, for example, you could be held liable for the resulting injury.
Fortunately, if you do find yourself facing a liability claim in court, the right kind of insurance can step in to protect you. General liability insurance covers the cost of defending yourself, plus any settlement you would otherwise need to pay (up to your policy limits). It can be a game-changer, protecting facilities from the serious financial trouble that can arise from a single incident.
If you rent, you might need to add your landlord to your liability policy as an additional insured.
Our team can help you figure out what’s required based on your specific situation. For help putting the right coverage in place to protect yourself and your RCFE, contact our team at InsureMyRCFE at (805) 413-5668.
