Legislative bodies generally don’t move very quickly. That said, the state of California is known to enact new policy to drive major change in targeted industries. That’s true of a 2014 Assembly Bill.
After discovering that many Residential Care Facilities for the Elderly (RCFEs) were underinsured — or not insured at all — the state sprung into action. AB 1523 was passed in 2014 and went into effect the following year, requiring nearly all RCFEs across the state to carry liability insurance.
Current Liability Insurance Requirements for RCFEs
Per the 2023 California Health and Safety Code, which pulls language from AB 1523, all RCFEs in the Golden State — save those that are a part of a continuing care retirement community — have to carry a certain amount of liability insurance. This type of coverage steps in if one of your residents or one of their visitors gets hurt or otherwise negatively affected because of a negligent act or failure to act by one of your team.
If an ice machine malfunctions and causes a puddle on the floor that someone slips on, for example, this insurance comes to the rescue. Not only does it help the person get the damages they feel they deserve, but it protects you from paying them out of pocket. Your liability policy covers legal fees and any settlement you’re ordered to pay, up to your policy limits.
So, how much liability insurance does state law require you to have?
The Health and Safety Code reads:
“All residential care facilities for the elderly, except those facilities that are an integral part of a continuing care retirement community, shall maintain liability insurance covering injury to residents and guests in the amount of at least one million dollars ($1,000,000) per occurrence and three million dollars ($3,000,000) in the total annual aggregate, caused by the negligent acts or omissions to act of, or neglect by, the licensee or its employees.”
The Potential for Audits
This insurance requirement isn’t necessarily new. But the California Department of Social Services (CDSS) has ramped up its oversight of RCFEs. It’s now relatively common for that state authority to conduct audits to ensure facilities have the required coverage.
Ultimately, if you’d hoped your RCFE could fly under the radar, it’s not worth the risk in 2024. Fortunately, getting the coverage you need to comply with the California Health and Safety Code can be easier than you think.
To get a policy tailored to your facility that hits the coverage requirements of state law, talk with our team. As RCFE liability insurance experts, we know the ins and outs of what California Code requires. At the same time, we understand the risks your kind of facility faces, and we can help you get coverage in place to defend against them.
For help complying with California legislation about insurance for RCFEs — and support getting the right level of protection for your facility — don’t hesitate to get in touch. To get started, call our team at (805) 413-5668. If you don’t already have the required $1 million per-occurrence, $3 million annual aggregate policy state law mandates, don’t delay — contact us today.
