A Risky Business

Tim Ryan, Executive Chairman at UNA, looks at the current insurance risks shaping the care home sector.

The evolution of the care home insurance market has no doubt come from an increased perceived risk in the care home sector, driven by some high profile claims, which have caused insurers to re-align their position. In the latter stages of 2013 Ecclesiastical, whose care market share was approximately 15%, signalled its intention to reposition its care account in a bid to realign it with a more clearly-defined customer base. This was then followed by the news that Hiscox would also be withdrawing from the care home sector market.

Unfortunately for care home operators, the remaining insurers within the market have been reviewing their position which may cause rates to increase. The key for the care home is to ensure they make sure the brokers speak to insurers with proven credentials in the care sector.

What are the Risks? Care home owners seeking to ensure they have the correct insurance cover in place, and who aim to secure lower premiums, will increasingly be assessed on an individual basis. This will make it essential for them to implement rigorous risk management policies.

For the care home itself, one of the primary risks is employer liability, and it is a legal requirement to have a stringent and updated Health & Safety policy in place. The risk of staff injuries can be minimised by

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training and making sure everyone is familiar with the tasks they have to perform. It is important to encourage staff to be alert to risks and inform others about them too. A prime example is that of aggressive residents; if all staff members are aware of the potential dangers, steps can be taken to avoid anyone coming to harm. Homes can be fined by the Health and Safety Executive if they do not have the right insurance in place as an employer. The price of the policy will be given for a whole year, but many companies will allow it to be paid on a monthly basis.

There is also liability to others to consider. This may be in the form of the medication the care home dispenses to its residents or a visitor slipping over - these are all risks which should be managed by good risk management practices.

The care home building itself can also pose a level of risk and should be a major consideration in an underwriter’s judgement. A care home should ensure they have carried out an up-to-date building survey and insurance valuation. This report will confirm that the building has been safety-checked by a professional and poses a low-level risk, as well as confirm that it has been maintained in a suitable condition.

Managing ongoing risks is one of the most important aspects of any care home's insurance programme and

what maintains your income following insured damage. The only way to prepare for business interruption is to manage the risks to buildings and contents in order, to mitigate the likelihood of the damage which could impact the normal running of a business.

Considering Volunteer

Insurance Consideration needs to be given to insurance for voluntary workers. If the care home is under charitable status, then the only insurance that it will be required, by law, to have is employer's liability insurance, which offers protection if an employee is injured and the charity is negligent, and motor insurance if they run vehicles. Beyond that, insurance is discretionary. In the eyes of the law, volunteers are now treated as employees.

Volunteers need to have clear guidelines in place. Most specialist sector insurers will automatically regard volunteers as employees, but more general insurance policies might not offer such protection. With other insurance companies, the care home – if under charitable status - might have to disclose that they use volunteers and say how many. It might cost more money, but the charity will then have that protection if things go wrong.

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