Insurance: Liability

Liability insurance is not required by any California state law or regulation to be purchased either as a condition of RCFE licensure, or once the facility is in operation.  The application for RCFE licensure only requires “. . . information concerning insurance. . .” under Section 87155 (15) of Title 22.   Whether a facility carries liability insurance is 100% discretionary on the part of the Licensee. 

RCFEs are required to provide 24/7 care and supervision.  Further, with the appropriate waivers and approvals,  they can care for residents requiring more than casual caregiving such as those residents on hospice, who are bedridden, for whom the facility has a Total Care Waiver, who have stage 1 and 2 bedsores (decubitus ulcers),  and individuals with cognitive impairments resulting from dementia or Alzheimer’s Disease;  in all, there are 11 types of health care conditions which RCFEs can care for.   With this many types of care needs under one roof, coupled with medically untrained caregivers, the risks to your loved one are elevated. 

That’s why you should be concerned if a facility has not elected to carry liability insurance.

Liability Insurance:  From the consumer’s perspective, the most important insurance an RCFE could carry is liability insurance.  Liability insurance provides protection for the RCFE owner when claims for injury or damage occurs to a resident or the resident’s property.  For instance, if a facility causes severe harm, injury or death to your resident, what is your recourse for the harm the licensee or licensee’s employee has caused?  The consumer could sue the facility, but if the facility does not carry liability insurance the consumer’s chances of ever recovering costs for incurred medical bills, pain, suffering or punitive damages are next to nil. 

Self-Insure:   If the consumer asks to see a facility's current liability policy, and the Licensee advises that he is self-insured, ask to see a bond or other evidence of self-insurance. If a licensee says that he is self-insured, that means the licensee believes he has adequate assets in sufficient amounts to cover any judgment against him for causing harm, injury or death to a resident.    

Not New and Not Unusual:  Since 1986, Community Care Licensing has required Child Day Care centers to carry liability insurance as a condition precedent to licensure.  A child day care center must provide a) proof of liability insurance, b) proof of having a bond of $300,000, or c) a signed affidavit in a child's daycare file showing the parent was notified that the child care provider does not carry liability insurance, that the parent was so notified, and still elects to place their child in the care and custody of an uninsured provider. 

What can you do?  CARR advocates for the family member, conservator, fiduciary making the placement to ask the Licensee whether she carries liability insurance.  If yes, ask to see a current documentation such as an Acord form, or a Statement of Insurance from the broker .  Note the expiration of the insurance.  If the policy has expired, and the Licensee can’t provide a current copy of insurance – it’s simple:  the Licensee has no insurance.  Then at least you know.  Now you can weigh the risks of placing your loved one or conservatee in a place that doesn’t carry liability insurance. 

CARR is advocating for legislative change to Title 22 requiring a mandate that RCFE owners carry liability insurance. If you agree with this policy change, please email us with your support.  Before you place your family member in a facility that is not covered with a liability insurance policy, consider that every driver in California has to have proof of current insurance before the car can get on the road.   Why would you want your loved one to have fewer rights that motorists on California highways?

Notes in italics represent the views and/or experience of CARR regarding this topic and/or regulation..