California Care Facility Bond

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California Care Facility Bond

In order to legally provide residential care services in the state of California, all residential care institutions must first get a license from the Department of Health and Human Services. The residential care facility licensing rules and regulations in California were created by the California legislature with the intention of ensuring that residential care facilities participate in ethical business operations.

Residential care facilities that keep the money of their residents in a trust account are required to acquire and keep up a California Care Facility Bond in order to be eligible for licensure. This is done to offer financial security for the administration of the legislation governing licensing.

If a residential care facility manages the financial affairs of its patients, the California Health and Safety Code 1569.60 mandates that the facility must file a surety bond in the state of California in the amount of at least $1,000. Bond form LIC 402 in the state of California is also sometimes referred to as residential care facility bond, assisted living facility bond, or community care facility bond.

Before the state will issue you a license, you are required to post this bond with them if you run a residential care facility that also handles the financial matters of your patients. The loyal and honest management of client and resident money is explicitly required of licensees of residential care facilities under this bond form.

Residential Care Facility

Surety Bond-Residential Care Facility

Residential care facilities, also known as senior care facilities, are smaller private facilities that typically have 20 inhabitants or less and are staffed 24 hours a day, seven days a week to provide non-institutional home-based services to elderly persons who do not need 24-hour nursing care.

Residential care facilities are also known as senior care facilities. In addition to the provision of food, these establishments often provide help with personal care duties, such as grooming and toileting.


The state of California requires all residential care facilities to acquire a surety bond as part of the application process in order to get a business license. This requirement applies to institutions that place resident cash in a trust account. If the residential care facility fails to comply with the rules set out in the appropriate licensing legislation, then the bond guarantees that residents will get compensation for any financial loss they may have suffered as a result of the failure.

To be more specific, the California Care Facility Bond protects residents in the event that the care facility mismanages resident finances in any manner, shape, or form. In a nutshell, the bond is a kind of insurance that protects the general public in the event that the care facility engages in unethical behavior with the money of its residents.

Bond Amount

There is a range of possible annual premiums for the California Care Facility Bond, from 1% to 7.5% of the total bond amount. Insurance firms decide on a customer’s premium by considering a number of factors, such as the customer’s credit score as well as their level of expertise.

Bond premiums for California Care Facility Bond start at $50 per year. Your specific premium will change depending on the amount of the bond that is needed for you, which in turn is determined by the kind of residential facility that you run and how its money is managed. Before you go ahead and buy your bond, you need to be sure that the state has confirmed the whole amount of your bond.

According to the California Health and Safety Code Sections 1560, 1568.021, and 1569.60, the maximum amount that may be claimed on any Residential Care Facility Bond must be equal to the entire amount of resident money that is kept in a trust account. Also, each act includes a provision that stipulates the bond amount must be at least $1,000 and cannot be lower than that.

Frequently Asked Questions

Why Is It Necessary for California Care Facilities To Get Bonded?

You are agreeing to properly handle resident client money in accordance with the law if you file a bond for a residential care facility. In the event that you or your facility improperly handles client cash, the surety firm that issued the bond will pay legitimate claims to persons who have been damaged up to the full amount of the California Care Facility Bond. After that, you would be responsible for compensating your surety firm for any losses it incurred as a result of paying out claims.

How Do Residential Care Facilities in the State of California Renew Their License?

The Department of Health and Human Services will get in touch with the residential care facility in advance of the license's expiry date to provide them with guidance on how to successfully renew their license. The licenses for all California residential care facilities expire every year and need to be renewed well in advance of their expiry dates.
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