post image

Care insurance
Are you covered for all eventualities?

Choosing the correct insurance products to suit the needs of your organisation is not as complicated as it might seem. Largely, it depends on the type of business you operate, its size, and the assets you need to protect. Justine Dignam from Markel International explores the options available.

The care sector is incredibly diverse with a broad range of insurance requirements, which often go well beyond the usual covers associated with other industries.

Care providers face several important considerations, such as ensuring effective corporate governance and providing a high-quality service, as well as managing risks such as assault or abuse, management liabilities and property loss and damage.

Public Liability Insurance

In our increasingly litigious society, public liability insurance is an absolute necessity for organisations involved in the provision of care, support and advice for vulnerable people. This is because there are several ‘wrongful acts’ that can lead to a claim being made against you – ranging from a service user being injured, to damage you might cause to third party property.

Accidental injuries, such as slips, trips and falls, can lead to a soft tissue compensation claim. Depending on the severity, this could cost around £2,000, plus legal fees which typically add another £5,000 to your costs; unless you have the right public liability cover in place.

Some specialist insurance policies include abuse cover as part of their public liability insurance. This is particularly important for care organisations and can protect against an incident, or alleged incident, involving someone in your care that may occur during the period of cover.

Scenario 1: Third party damage
Public liability insurance would protect your organisation if, for example, a volunteer driver for a community transport organisation failed to adequately monitor a service user who then opened a car door into the path of an oncoming vehicle. The community transport organisation could be held responsible for the damage caused to both vehicles.

Scenario 2: Injury to service user
If a service user were sitting in the rear of a car awaiting assistance when a volunteer inadvertently closed the car door onto their outstretched hand causing cuts and bruising, you could be liable for the injury.

Professional Indemnity Insurance

Regardless of how many years’ experience your organisation may have, there is always the possibility that you or one of your employees could make a mistake.

Professional indemnity insurance covers you for legal costs and expenses in defence of a claim, and damages and compensation awarded against you.

It is an important cover for anyone who provides any form of care or support and protects against allegations of professional negligence, such as giving a client incorrect advice, defamation, employees’ dishonesty and medical malpractice.

Providers who are involved in any kind of medical care should consider professional indemnity insurance that includes medical malpractice cover to ensure they are protected should a healthcare worker, for example provide negligent treatment resulting in injury or death. Without professional indemnity cover, your financial position could be left vulnerable if a claim were to be brought against you. Ensuring adequate insurance is in place gives you peace of mind that you are prepared should an incident occur.

Scenario 1: Breach of professional duty
A care organisation employed an agency worker to fill a gap in their staff without checking that the worker had been provided with appropriate training. The agency worker negligently injured a service user leading to a claim against the organisation for breach of professional duty.

Scenario 2: Inadequate supervision
A service user was burnt during a cookery lesson undertaken at a training centre that catered for adults with learning difficulties. A family member made a claim alleging inadequate supervision.

Employer’s Liability Insurance

Employer’s liability insurance provides cover for legal costs and expenses in defence of a claim and damages and compensation awarded against you in the event of alleged injury to an employee.
It is a legal requirement for an organisation to have a minimum of £5m cover, and failure to get appropriate cover can result in a fine of £2,500 for every day you are not insured.

Employer’s liability claims are extremely common. If employer’s liability cover didn’t exist, your organisation would have no option other than to fund the full cost of claims itself. This could include payments for damages and legal costs and the cost of obtaining your own legal representation.

Claims are wide-ranging. They can and do arise from ex and current employees. They can be brought due to a wide range of physical and psychological injuries sustained during employment.

Such claims should never be taken lightly or disregarded. Even a minor injury can cost several thousand pounds to deal with, while a more serious injury or illness can easily lead to claims in the tens or hundreds of thousands of pounds.

Scenario 1: Employee injury following assault
An employee who worked with vulnerable adults was assaulted by a service user when the employee refused to allow a snack before mealtime. The service user bit the employee’s hand and shoulder resulting in the loss of the tip of the finger and permanent scarring to the shoulder. Employer’s liability insurance would protect your organisation in this instance.

Scenario 2: Cumulative strain injury
A minibus driver working for a community transport organisation alleged cumulative injury because of the power steering on the minibus being defective. With employer’s liability insurance, the community transport organisation would be protected against this claim.

Management Liability Insurance

Management liability covers you for legal costs and expenses in defence of a claim, and damages and compensation awarded against you, in the event of a claim against a director, officer, trustee or manager at the organisation.

While most organisations are protected through public liability and other insurances, the individuals within the company are often unprotected. It is vital to recognise that individuals involved in the management and decision-making for care organisations bear considerable responsibility, both for their actions and the actions of the organisation they represent.

Making an incorrect decision on a seemingly minor issue can put the individual at risk of compensation claims, legal action or official investigations being directed towards them personally.

Scenario 1: Risk assessments not followed
Management liability insurance would protect your organisation if, for example, a manager of a centre providing respite care was investigated when a service user choked on their food and was hospitalised because the relevant risk assessments were not followed. The actions of the manager could be investigated by the police and the Health and Safety Executive (HSE).

Property Damage and Business Interruption Insurance

Business interruption covers you for loss of income and increased cost of working following an interruption, for instance if your premises had been damaged by an unexpected event, such as a fire or flood.

Property damage and business interruption covers the loss of income and increased cost of working in the event of damage to premises caused by unexpected events, such as fires and floods. Property damage insurance protects the building’s content in such scenarios.

Business interruption insurance helps to minimise the impact caused when you are unable to use your property. It can cover the additional costs incurred in seeking alternative offices or the income ordinarily earned from the affected premises.

Property damage covers you for buildings, general contents and portable equipment in the event of accidental damage, theft and various disasters including fires and floods.

Repairing or replacing damaged property can come at great cost to an organisation. Property damage insurance can protect against such expenses.

Business interruption insurance would protect your organisation if the following situations occurred:

Scenario 1: Premise was affected by floods
The premises of a residential care home was in a badly flooded area. The flood caused damage to the property and contents. As a result, the organisation had to rent temporary premises while the clean-up and repairs took place.

Scenario 2: A leaking pipe
A rehabilitation centre’s property was damaged when water escaping from a leaking pipe in a bathroom caused part of the ceiling to collapse. As a result, the organisation had to cover the cost of repairs to the property. This would be covered by property damage insurance were it taken out.

Additional covers to consider

  • Fidelity – covers you for loss of money or goods in the event of fraudulent acts by employees. Fidelity would protect your organisation if you were to experience theft by an employee.
  • Entity Defence – covers an organisation for legal costs and expenses, for example, in the event of corporate manslaughter, breach of contract or Health and Safety Executive investigation.
  • Cyber Risks – covers legal, IT security and regulatory costs in the event of a cyber-attack, theft or loss of data and network interruption.
  • Employment Law Protection – covers for legal costs and expenses in the case of an employment dispute, such as an allegation of constructive dismissal.

Care workers and providers are a key risk group when it comes to claims being made against them. Specialist insurance advice and cover is absolutely critical to give operators the confidence to run their businesses effectively.

Justine Dignam is UK Marketing and Propositions Director for Markel International.
Email: Twitter: @MarkelUK

What types of insurance have you taken out for your business? Share your experiences in the comments section and give feedback on this article. Not a member? Sign up today.

Notify of
Inline Feedbacks
View all comments

Caring for Care Workers. Donate to The Care Workers’ Charity and make a difference Donate