Finch part of Ethos Broking provide a care home insurance market update (in discussion with Ownacarehome and Buyacarehome)
The Care sector continues to be resilient despite challenging headwinds.
Insurers across all sectors are looking for sizable increases and continue to be in a hard market cycle. This has been particularly felt in the care sector as evidenced by the following:
- A lower insurer appetite for the Care sector, with emphasis on renewals rather than writing any new business.
- Insurer acceptance criteria has toughened significantly.
- Lack of competition resulting from a contracted market has resulted in escalating premiums
- Cover for communicable disease is now mainly omitted across most sections of insurer policy wordings effectively becoming a standard market exclusion.
What are the insurance premium implications for the Care sector?
Essentially, Care providers with a low risk portfolio will obtain the most favourable premiums. One of the key indicators of risk in care is the care provision’s Regulatory inspection result. A Requires Improvement or Inadequate rating will without doubt significantly increase insurance premiums and the care provision will need to provide an action plan of risk mitigation.
In the current climate, obtaining the best insurance premium starts with proactively demonstrating risk mitigation from the outset to enhance and future proof the key pillars of a care home operation, key aspects being a care provision’s people, processes, finances and reputation. With limited insurers quoting for new and existing care homes, now, more than ever it is important to select the right broker business partner to present your requirements to the limited insurers currently quoting.
What are your Top tips for insurance risk mitigation?
At Finch Insurance we consider the following when considering insurance risk:
- Demonstrate COVID / Infectious Disease management
- Ensure general Health & Safety has not been bypassed
- Focus on all regulatory areas
- Evidence continuous improvement in real time
- Minimise making claims on your insurance
- Consider a mock inspection to get constructive and actionable feedback on your care provision
A specialist broker understands the Care sector and the challenges it faces, encouraging providers to address their insurance matters in a timely fashion.
What example activities should a care provision address for insurance?
These include but by no means are limited to:
- Personal care
- Nursing care
- Night care
- Respite and re-enablement services
- Extra care
- Supported living care
- Household and gardening duties
Simply put, standard business insurance does not include vital protection against the specific risks of the care sector which could leave people that use the services, staff and the business vulnerable. Insurance specific to the care sector goes beyond usual public liability, buildings, contents, to include for example medical malpractice insurance and flexible liability cover.
What is Director/Officer liability insurance cover?
This represents liability cover to protect a care business against compensation claims brought about through an act of a director/officer. It is important because these actions may not be covered by other liability insurances. For example, this protects the personal assets of any director or officer of the company resulting from an error or omission, breach of duty or other matter whilst acting in such capacity for the care business.
Insurance remains a significant operating cost for a care provision, with a contracted number of insurers. With the Covid19 pandemic behind us in a new era time will tell how the insurance market reacts to the ongoing, resilient, and much needed care sector, and whether more suppliers return or join as suppliers of insurance making the market more competitive in the longer term.