Florida Assisted Living Facility Bond: A Comprehensive Guide

December 30, 2021

Florida Assisted Living Facility Bond

This guide provides information for insurance agents to help their customers obtain a Florida Assisted Living Facility bond

At a Glance:

  • Average Cost: Between 1% to 7.5% of the bond amount per year based on the applicant’s credit
  • Bond Amount: Determined on a case by case basis (more on this later)
  • Who Needs it: Florida assisted living facilities that serve as representative payees or are granted power of attorney for any resident
  • Purpose: To ensure residents will receive compensation for any damages should the assisted living facility mismanage their funds
  • Who Regulates Assisted Living Facilities in Florida: The Florida Agency for Health Care Administration

Background

Florida statute 429.07 requires all assisted living facilities operating in the state to obtain a license with the Agency for Health Care Administration. The Florida legislature enacted the licensing laws and regulations to ensure that assisted living facilities engage in ethical business practices. To provide financial security for the enforcement of the licensing law, assisted living facilities that act as a representative payee or have power of attorney for any resident must purchase and maintain a surety bond to be eligible for licensure.

What is the Purpose of the Florida Assisted Living Facility Bond?

Florida requires all assisted living facilities that serve as a representative payee or have power of attorney for any resident to purchase a surety bond as part of the application process to obtain a business license. The bond ensures that residents will receive compensation for financial harm if the assisted living facility fails to comply with the regulations set forth in Florida statute 429.27. Specifically, the bond protects residents in the event the assisted living facility in any way mismanages their funds or property. In short, the bond is a type of insurance that protects residents if the assisted living facility acts unethically with their funds or property.

Florida Assisted Living Facility Bond Form

Florida Assisted Living Facility Bond Form

How Can an Insurance Agent Obtain a Florida Assisted Living Facility Surety Bond?

BondExchange makes obtaining a Florida Assisted Living Facility surety bond easy. Simply log in to your account and use our keyword search to find the “assisted living” bond in our database. Don’t have a login? Enroll now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone at (800) 438-1162, email, or chat from 7:30 AM to 7:00 PM EST to assist you.

At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.

How is the Bond Amount Determined?

Florida statute 429.27 dictates that the limit on the assisted living bond must be equal to twice the average monthly aggregate income or personal funds due to residents or expendable from their account. Additionally, the value of any resident property the facility controls through power of attorney must be included when determining the required bond amount.

Is a Credit Check Required for the Florida Assisted Living Facility Bond?

Surety companies will run a credit check on the owners of the assisted living facility to determine eligibility and pricing for the Florida Assisted Living Facility bond. Owners with excellent credit and work experience can expect to receive the best rates. Owners with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the owner’s credit.

How Much Does the Florida Assisted Living Facility Bond Cost?

The Florida Assisted Living Facility Bond can cost anywhere between 1% to 7.5% of the bond amount per year. Insurance companies determine the rate based on a number of factors including your customer’s credit score and experience. The chart below offers a quick reference for the bond cost on a $10,000 bond requirement.

$10,000 Assisted Living Facility Bond Cost

Credit Score Bond Cost (1 year)
680+ $100
625 – 679 $150
575 – 624 $375
550 – 574 $500
500 – 549 $750

*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to, years of experience and underlying credit factors contained within the business owner’s credit report.

Who is Required to Purchase a Bond?

All assisted living facilities that serve as representative payees or are granted power of attorney for any resident must purchase a surety bond prior to receiving a business license. Florida statute 429.02 defines an assisted living facility as an institution that provides housing, meals, and personal services for a period exceeding 24 hours to one or more adults that are not related to the owner/administrator.

How Do Assisted Living Facilities Apply For a License in Florida?

Assisted living facilities in Florida must navigate several steps to secure their licenses. Below are the general guidelines, but applicants should refer to the application checklist for details on the process.

License Period – All Florida Assisted Living Facility Licenses are valid for two years from the date of issuance and must be renewed before the expiration date

Step 1 – Purchase a Surety Bond

Assisted living facilities that serve as representative payees or are granted power of attorney for any resident must purchase a surety bond

Step 2 – Purchase Insurance

Florida requires assisted living facilities to obtain general liability insurance. Assisted living facilities should contact the Agency for Health Care Administration for help determining how much coverage to obtain.

Step 3 – Pass Inspection

Assisted living facilities must pass both a fire safety and sanitation inspection conducted by the applicant’s local fire authority and county health department respectively. Additionally, assisted living facilities must pass a septic system (if applicable), food safety, and group care inspection prior to receiving their license.

Step 4 – Complete the Application

All Florida Assisted Living Facility License applications should be mailed to the following address:

Agency for Health Care Administration
Assisted Living Unit
2727 Mahan Dr., MS 30
Tallahassee Florida, 32308-5407

Assisted living facilities must complete the application in its entirety, and submit the following items:

    • Certificate of general liability insurance
    • Fire safety inspection report
    • Septic system or water supply evaluation report (if the facility is on a septic system)
    • Food hygiene inspection (for facilities with 11 or more beds)
    • Residential group care inspection report
    • Documentation verifying the facility has met all local zoning requirements
    • Documentation proving compliance with the community residential Homes site selection requirements
    • Proof of financial ability to operate (click here for facilities with less than 17 beds and here for facilities with 17 or more beds)
    • Copy of administrator’s high school diploma or GED certificate
    • Proof of property occupancy
    • Certificate of Authority (if part of a continuing care retirement community)
    • Application addendum
    • Required Medicare, Medicaid, and CLIA disclosures (if applicable)
    • Approved repayment plan (if applicable)

Assisted living facilities must pay a licensure fee based on the number and type of beds they operate. The fee can be calculated on the application form.

How Do Florida Assisted Living Facilities Renew Their License?

Assisted living facilities in Florida can renew their license online here. All Florida Assisted Living Facility Licenses are valid for two years from the date of issuance and must be renewed before the expiration date.

What are the Insurance Requirements for the Florida Assisted Living Facility License?

Florida requires assisted living facilities to purchase general liability insurance, contact the Agency for Health Care Administration for help determining the amount of coverage that is right for your customer. Assisted living facilities that serve as representative payees or are granted power of attorney for any resident must purchase a surety bond.

How Do Florida Assisted Living Facilities File Their Bond?

Assisted living facilities should mail their completed bond form, including the power of attorney, to the following address:

Agency for Health Care Administration
Assisted Living Unit
2727 Mahan Dr., MS 30
Tallahassee Florida, 32308-5407

The surety bond requires signatures from both the surety company that issues the bond and from an owner/officer of the assisted living facility. The surety company should include the following information on the bond form:

  • Legal name and location of entity/individual(s) buying the bond
  • Surety company’s name and location
  • Bond amount
  • Date the bond goes into effect
  • Date the bond is signed

What Can Florida Assisted Living Facilities Do to Avoid Claims Against Their Bonds?

To avoid claims on their bond, assisted living facilities in Florida must adhere to the following provisions:

  • Do not mismanage resident funds
  • Hold all resident funds deposited with the facility in a trust account
  • Submit accurate reports regarding resident funds

What Other Insurance Products Can Agents Offer Assisted Living Facilities in Florida?

Florida requires assisted living facilities to obtain general liability insurance as a prerequisite to obtaining a business license. Bonds are our only business at BondExchange, so we do not issue any other types of insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.

How Can Insurance Agents Prospect for Florida Assisted Living Facility Customers?

Florida conveniently provides a public database to search for licensed assisted living facilities in the state. The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.

2022-03-07T17:31:13-05:00