Engineering Cover For Your Care Home

Why does a Care Home need engineering cover?

If an organisation owns or operates work equipment there are various legal obligations they must comply with. This applies to Care Homes in regards to any lifts, personal hoists and any other equipment you may use while caring for your service users. Regular engineering inspections will help ensure that both statutory requirements and general health and safety duties are met.

Operating dangerous, unsafe or defective equipment will inevitably lead to accidents, which can result in injuries to both your staff and your service users. This can lead to costly liability claims and in many cases create the risk of criminal prosecution for individuals and their organisations. In many instances, inspections are required by law, so conducting them is essential for avoiding prosecution. However, even when inspections are not specifically mandated, owners and operators still have an overarching legal duty to manage risks in the workplace and to ensure equipment is safe to use. Regular inspections are considered an implicit requirement to demonstrate sensible risk management practices. This is supported by the Health and Safety Executive’s (HSE) approved codes of practice, industry standards and manufacturers recommendations.

What kinds of equipment in your Care Home require inspection?

  • Passenger / goods lifts
  • Stair lifts
  • Bath hoists
  • Personal hoists
  • Wheelchair lifts
  • Hot water heating boilers
  • Steam boilers
  • Dumb waiters

This is not an exhaustive list and the Health and Safety Executive will consider the primary use of equipment to determine whether it legally requires inspection.

Engineering insurance for your care home

As well as covering your legal requirements for inspections, a comprehensive engineering policy will also cover your equipment for sudden and unforeseen damage including breakdown from internal defects, accidental damage by extraneous cause and any damage caused to the surrounding property caused by the explosion of any pressurised equipment. It may also cover the costs involved in hiring replacement equipment should yours need to be sent off for repairs.

ALDIUM can provide full engineering inspection and insurance cover for your care home. Contact the Care Team for your free consultation

Choosing the Right Insurance Product for Your Care Home

Care Home Insurance can vary dramatically depending on which Insurer your policy is placed with. While policies may seem very similar from Insurer to Insurer there can be significant differences in the details so it is important that you read your quote documentation carefully before making a decision. If you do not read your policy wording carefully and fully understand the product you are purchasing before agreeing to go on cover, you may find yourself underinsured or worse still not covered when it comes to making a claim.

While the cheapest policy may seem like the most attractive in the current climate this should be weighed carefully against several other factors before a decision is made, any one of which may cause you to reject your first consideration in the best interests of your business.

Price is an important part of any consideration but the old adage of ‘you don’t get a Rolls Royce for the price of a Mini’ applies to insurance as much as any other product or service and you should consider the breadth and depth of the cover being offered, the security of the Insurer (who you would expect to have the wherewithal to pay claims) and the knowledge and standards of the broker you are considering appointing to act on your behalf.

The last few years have been particularly turbulent within the Care Insurance sector for a few reasons:

  • A number of established Insurers such as Ecclesiastical and Hiscox opting to withdraw from offering insurance to the private care sector.
  • The short term emergence of Insurers who have offered premiums at unsustainable levels and ultimately collapsed leaving clients out of pocket, often without protection from financial compensation due to the Insurer being a non-Financial Conduct Authority (FCA) regulated company.
  • The entry of established UK Insurers into the care sector who have not always had the requisite experience and understanding of the market to price adequately to cover claims resulting in their subsequent withdrawal from the market.

There are however some Insurers with solid financial security, fully registered with the appropriate authorities who place sensible pricing decisions at the heart of their underwriting allowing for sustainable and reliable long term presence in the care sector. It is vital that you choose an Insurer who is directly authorised and regulated by the FCA, a primary member of the Financial Services Compensation Scheme and rated at least BB+ or higher by a known international insurance rating agency.

Why choose a policy specific to care homes rather than standard business insurance?

Generally speaking, standard business insurance will not include protection against the specific risks of the care industry which could leave your service users, staff and business vulnerable. While some insurance brokers may patch together various policies to cover your liability, buildings, contents etc., this will more than likely leave holes in your cover in regards to specific cover for a Care Business. Below we have outlined some of the key features to look out for, some of which are specific to a Care Business and others which you may need to adapt from the standard business policy:

Medical Malpractice Insurance

This is a vital part of an insurance policy for any care provider as it protects against claims resulting from errors made by medical professionals – for example if a staff member was to administer the wrong medication. It is covered under the public liability section of a policy but will usually have its own indemnity limit separate to that of the rest of that section of cover – i.e. the limit under the public liability section could be £10 million, but the limit for medical malpractice claims may be restricted to £2 million. Your policy schedule should outline this clearly for you, but if you are unsure it is worth confirming with your broker that you have adequate cover.

Public Liability

This is to protect both you and your residents. As the owner of the business you are responsible for ensuring that your Care Home is as risk free as possible, but even with the best, most efficient risk management policies in place accidents can still happen. The Public Liability section of your policy covers your legal liability for accidental loss, damage or injury to a third party on your premises. With the current climate around abuse claims and the eagerness of claims farmers to chase both residents and relatives to claim against Care Homes it is imperative that you have extensive cover in this area and know exactly what you are and are not covered for. You can read more about this in one of our earlier articles here https://www.aldium4care.co.uk/what-to-look-for-in-care-home-insurance/

Employers Liability

Employers Liability cover guarantees that you have access to adequate funds should a situation arise where you need to compensate a member of staff for any injury or damage resulting from a situation that you, as their employer, are responsible for. This is a legal requirement and most policies cover this up to £10 million as standard.

Flexible Liability Cover

While most policies will include public liability cover at £5million as standard there are times when you may need to temporarily or permanently raise this limit to £10million in order to tender for a public contract. A bespoke Care Home policy should allow you to raise the amount covered when you require it. It may be the case that your Insurer limits their public liability cover to £5 million, but the Local Authority require you to have cover for £10 million. In this case you will require what is known as an Excess Layer policy to cover the additional £5 million required. This means that a separate Insurer from the one providing your policy will cover you for the additional amount, but your Broker should be able to include this in your overall package.

Residents Contents 

The personal belongings, valuables and money belonging to your residents are covered separately to your business contents so it is imperative that you secure adequate cover for your residents in addition the amount you have declared for you contents. These levels can differ between policies so it is important to check what you’re covered for. Resident’s high value items will likely need to be insured separately and don’t forget that personal cash usually has a separate limit.

Buildings Insurance

A Care Home business is usually completely reliant on the premises and it is more than likely your most expensive asset. The buildings insurance part of your policy exists to cover the costs for repairing damage – from storm damage to your roof right through to rebuilding following a serious fire. This means that you will need to insure yourself for the full re-build cost of your property to ensure cover should the worst happen. It is important to factor in not just the main building itself, but also any outbuildings, boundary walls, pools, fitted kitchens and bathrooms etc.

Contents Insurance

The contents insurance cover in your Care Home policy is there to protect the items in your building that belong to your business. This includes everything from your office equipment (computers, chairs etc.) to specialist care machinery (hoists, walk in baths, washing machines etc). It is also worth noting that if you lease equipment then it may not be necessary to accept the insurance offered by the leasing company as these items can usually be covered under your Care Business policy. Make sure to ask your broker about this if you are unsure as you could be paying to insure the same item twice.

Business Interruption

The business interruption section of your Care Home insurance policy covers you against financial loss following an event which causes the business to run at an increased cost of working, such as a fire. It is important not to underestimate how long it can take to get your business back up and running following such an event – for example, if your Care Home building is a heritage listed property then it may take much longer to rebuild if you need to source a particular material. Most Brokers would suggest a 24 month indemnity period as standard but this can be increased if you feel that it could take longer for your business to recover from a serious incident.

Engineering Inspection

Service equipment, such as lifts and personal hoists are required by law to be inspected either annually or bi-annually. This section of a policy can also include cover for breakdown from internal defects, accidental damage from an extraneous cause and the hire of replacement equipment. This is not usually included as standard as part of a Care Home insurance policy so it is important to remember to ask your broker about this cover if they do not mention it.

Legal Expenses

There are a wide range of legal pitfalls that a Care Home Owner may encounter on an almost daily basis and we have found that Care Home Owners are more likely to claim on this section of a Care Insurance policy than any other. This section of your policy provides cover for many situations but it is most commonly used for employment disputes, contract disputes and also legal defence against criminal prosecutions brought by the Police, Health & Safety agencies and Local Authorities. It also gives cover for civil actions in some specified circumstances. Comprehensive legal protection should also include a number of 24 hour helplines covering legal advice, tax advice and counselling.

Loss of Registration

It goes without saying that the loss of registration for any Care Home can be devastating. This section of the policy provides cover against the financial depreciation of the premises or reduction in turnover following the withdrawal of the certificate that allows you to run the business.


As we said at the start of this article: a Care Home insurance policy can and will vary from insurer to insurer, so it is important to know exactly what cover you do have and what cover you do not have. Your Insurance broker should fully understand your requirements and have the necessary expertise in and knowledge of the care sector to find cover that meets those requirements for you. This is essential to being able to provide you with the suitable technical guidance in a clear manner and obtaining cover that truly reflects your bespoke insurance needs. That’s why our consultants and underwriters at Aldium have been specially trained to guide and advise you when it comes to selecting the best cover for your business. They have a shared background in both financial planning and direct care, and this combined knowledge helps them to understand your exact requirements and advise you on the best possible solutions to your insurance requirements.

Is the cheapest deal always the best deal?

 

Buying insurance is easy, but buying the right kind of insurance can be a bit more difficult. There are hundreds of companies all willing to give you their “cheapest quote” or “best deal”, but is what is cheapest always what is best?

All insurance policies serve to provide a guarantee of compensation for specified loss, damage, illness or death in return for payment of a specified premium. Where they all differ is in which of those specified events are included in the cover. You may have cover on one policy for many things that you wouldn’t have cover for on another, but they will both be presented to you as “an insurance policy”. So how can you be sure you are buying a policy that provides not only the cover you need, but also the cover you want?

If you don’t spend the time explaining your exact demands and needs to your broker then they can only provide you with an insurer’s standard policy which may be adequate for a large range of businesses but not specifically designed for yours. While a standard policy may offer a quick, cheap option, they are not tailored to your specifications and therefore may not offer the same protection as a bespoke policy from your Broker. Generally speaking, the more detailed your policy is, the more security and protection it will offer your business.

Despite this, according to recent industry research only 38% of Care Home Owners consider the cover provided to be the most significant factor in deciding on an insurance policy. If you compare that to the 61% of those surveyed that consider price to be the most important factor when choosing a policy, it’s easy to understand why so many Care Homes end up under insured. A pre-packaged policy won’t cost as much as a bespoke policy, and it won’t take you as long to get a quote – but it also won’t be built specifically for your business and your needs. If you don’t take the time to discuss all of your needs with your broker and explain exactly what it is you expect from your insurance policy then you are forfeiting the opportunity to develop a comprehensive insurance package that adequately addresses your businesses demands.

Care Home Owners are feeling the pinch from all angles at the moment, so it’s understandable that many would see their insurance policy as a suitable area to trim the fat. You are legally obliged to have insurance for your business, and as such it is often viewed as a “must have” rather than a “want to have”. Because of this attitude towards insurance, many Care Home Owners focus on what they must insure rather than what they want to insure. It can be very tempting to just cover the bare minimum to ensure you are legally compliant and not really explore all the options that are available that could be more suitable to the Care Home that you run. With the rising costs of running a Care Home it must be incredibly tempting to choose the cheaper option over the more expensive but more comprehensive cover being offered, but if your business were to experience a incident or event not covered or inadequately covered by a policy purchased with price as the main priority, it could end up costing your business more than you may have saved by choosing the cheaper policy.

There are many options for a Care Home Owner when it comes to choosing an insurance policy. That’s why it is essential to discuss all of your options with your Broker rather than just choose the cheapest policy available. Spending slightly more time and money on a policy could be the difference between successfully pursuing a claim and significantly losing out financially if you don’t have the right cover in place.

  • Before approaching your broker for a quotation, speak with people within your company who may be more informed of your insurance requirements in areas that you may not be – your accountant, care manager, maintenance people etc.
  • Start your process by designating a budget for your insurance package, and make sure that your Broker is aware of that budget. This will allow them to source quotations within your price range, but it will also help you to choose the policy which is the best value, and not just the cheapest.
  • Take the time to discuss you required cover with your broker. Be prepared to spend anything up to an hour going through the quotation process. It is important that your Broker understands your requirements exactly.
  • Give the same amount time to your broker when they are presenting quotations to you. It’s easy to “switch off” after hearing the premium, but it is important that you fully understand the options being given to you.
  • Take your time with your decision. Don’t be afraid to ask as many questions about the quotations being offered as you feel necessary.
  • Ignore the premium until you understand the cover being offered. List your quotations in order of how they best suit your needs, and then compare the prices. Move down that list until you find the best cover which fits within your budget range.

At Aldium we offer a completely bespoke service to our clients. We take our time collecting quote information from you so that we can gain a full understanding of your exact demands and needs. Our underwriters will source a policy for you that meets those expectations and our consultants will guide you through selecting the most appropriate package for your business.

Avoiding Under-Insurance

  • 40% of businesses do not have enough business interruption cover to get them back on their feet following a large claim

  • In 25% of SME claims reviewed by the FCA, the indemnity period expired before they returned to a normal trading position

If you find out at the time of making a claim that the policy you have bought does not provide enough cover it can have a devastating effect on your business. If at the time of the claim the Insurer discovers that you have undervalued your insurable interest then they may charge more premium at that point, or worse still significantly reduce the claim payment made to you.

There are many ways in which a business can be under-insured; buildings, contents, business interruption, liability etc. so it is vital that you complete a thorough search for information about your business before taking out an insurance policy to ensure you are sufficiently covered.

Suitable insurance forms a vital part of business continuity planning so it is essential to ensure you are buying the right amount of cover. Generally speaking, insurance companies base their premiums on the value of what the client is asking to be insured. The purpose of an insurance policy is to put you back in the position you were in before you needed to make a claim, and that can only be done if you have stated that position accurately to your insurer.

Under the Insurance Act 2015 the responsibility has been placed on the Client to make a reasonable search for information about the business to allow the Insurer to know the business in its widest sense. This means that it has become even more important for a business owner to provide as much precise information as they can when getting quotes for their insurance.

So how can you ensure that you have adequate cover?

It is essential to correctly assess the amount of insurance cover you need and to understand how to arrive at a suitable sum insured or liability limit of indemnity, and it is equally important to fully understand what they represent. The Insurance Act states that you must conduct a reasonable search for information when acquiring an insurance quotation, and this could require you to obtain or verify information from a number of sources who may hold or have access to important information about your business. For example; if you employ an accountant it may be worth checking with them before declaring an amount to insure in regards to your annual turnover, or consulting with a surveyor in regards to your building sum insured and how long a rebuild would take. You should obtain up to date valuations where possible and keep sums insured under review from year to year. It is also important to remember that policy standard limits are not always enough.

Rebuild Costs

The rebuild cost may be higher if you have a specialised property, such as a listed building. This could also increase the time it would take to rebuild your property if specific construction materials need to be sourced, so you should take this into consideration when deciding on your indemnity period for business interruption.

Business Interruption

When considering your business interruption the sum insured needs to represent the expected revenue over the period of time it would take to get your business back to its pre-claim trading level. This means that it is important to correctly asses both the sum insured and the indemnity period. It is wise to be as pessimistic as possible when considering how long it will take to get your business back up and running again after a total loss event as building work inevitably takes longer than planned and so the process of getting you back to a trading level can be out of your hands. Make sure you give yourself some breathing room when considering your business interruption.

Liability Cover

Liability policies are intended to pay the costs of defending an allegation of legal liability against your business together with any settlement or award of damages. To work out the liability risk for your business you need to consider any potential claims that might be brought against you or your business. These type of claims can come from many types of claimant – service users, their family members, staff, local authorities etc. so it is important to consider all of these and what type of claim they could bring against you. As an employer you will have a legal obligation to have at least £5 million of employers liability cover. It is also worth considering more specialist covers such as management liability, directors and officers cover, cyber insurance and professional indemnity insurance.

As well as ensuring you have enough liability cover, it is important to ensure you have the right kind of liability cover. Some insurers are now offering liability cover on a claims made basis, which may not provide sufficient cover for the care industry due to the nature of how claims are usually reported within the industry. I have written about this in much more detail here:

http://www.aldium4care.co.uk/what-to-look-for-in-care-home-insurance/

Top Tips

  • Use professional valuation services to help you decide on your sums insured.
  • Sums insured for buildings should be based on the cost of rebuilding, not the market value.
  • Particular features of your building might affect the cost of reconstruction.
  • 24 months is likely to be the minimum period required for a business to fully recover its trading level and to rebuild its customer base.
  • Disaster recovery or business continuity plans will significantly speed up the recovery period after a loss.
  • If you buy a “standard policy” check that all of the limits and indemnity periods are sufficient.
  • Make sure that you have considered the full risk and potential consequences of liability claims against you.
  • Check all of your documentation thoroughly. If there’s something you don’t understand or is unclear, which can often be the case with insurance jargon, then ask your broker to explain it to you (it’s what you pay us for!).

ALDIUM offer a bespoke insurance programme, designed and written to your exact demands and needs. Our specialist care consultants and underwriters are here to ensure you have the cover you need to make sure your business is fully protected when it is at its most vulnerable. If you are unsure if you currently have adequate cover for your business, or would like some advice around how best to find out what cover is required then call the Care Team at ALDIUM on 0151 336 5881 or email us at care@aldium.co.uk

Keeping Safe This Christmas

 

The festive period is one of the busiest times for a care home – all kinds of extra activities are planned and the traffic of visitors can be double what it normally is. It is also the busiest time for Insurers as both personal and commercial clients are exposed too much greater risks during this period (fire claims alone have been known to increase by up to 26% during December). Any damage or loss to your business can be a costly coal in your stocking, but most can be avoided by taking simple precautions to protect yourself and your business.

Lights

At this time of year, lots of lights, decorations and candles are a key feature of the celebrations. It goes without saying that candles and any naked flames pose a specific fire risk so this will need to be considered as part of your risk assessment procedures. It is best to avoid using candles if possible, but if you are going to use them it is important to ensure that all candles are encased in a candle holder and placed on a heat resistant surface. They should also be kept away from fabrics and should never be left burning overnight.

Take a moment to review the tree lights you want to use – check they have been tested thoroughly and inspect them visually, looking for bare wires or frayed insulation. It is also important to check that any lights being used conform to the British Safety Standards and if they are no longer under warranty (usually if they are older than 12 months) that they have been PAT tested. Make sure that you don’t overload plug sockets and you should ensure power leads and cables do not pose any trip hazards. It is also advisable that all lights need to be turned off overnight.

Of course, it goes without saying, make sure your smoke alarm is in proper working order and test it regularly.

Trees & Decorations

It is vital that you do not place your Christmas tree or flammable decorations near a source of heat (like candles, an open fire or cooking equipment). You also need to ensure that your tree is situated in a place which gives reasonable access to the tree while ensuring it does not obstruct exits and evacuation routes. Check it is held securely in place so that it cannot toppled over as it could cause a serious injury if it falls on someone. It may also be worth considering an artificial tree to avoid any risk posed by pine needles, such as slipping, getting them stuck under the skin, allergic reactions or the increased fire risk. You can even look into buying a flame resistant, non-allergenic tree.

The Weather

This time of year brings with it longer nights and a drop in the temperature. It is essential that you ensure that all exterior surfaces of the home are well lit and have been well gritted to prevent residents, staff and visitors from tripping over or slipping on ice. Making sure the home is well maintained and in good working order before any severe weather hits will help you prevent damage to the property from the wind, rain and snow. Clear out any guttering and drains, check your roof (including sheds, garages and outbuildings) and consider pruning any low hanging branches from nearby trees.

Frost can cause burst pipes risking water damage. It is important to familiarise yourself with the location of your stopcock in case of emergencies. It’s also worth lagging pipes and checking your water tank is insulated and also consider lagging outside taps to prevent them from freezing.

Visitors

It is very common for a care home to expect an increased number of visitors during the festive period. This not only opens your business up to a greater risk of someone doing something untoward in your home (theft, abuse etc) but also of a third party injuring themselves on your premises. It is vital to complete full security checks for anyone being allowed on site and giving the visitors identification so that staff know who should and who should not be on the premises at all times. It is also essential to keep a record the amount of people in the building as this will be imperative in ensuring everybody’s safety in the event of a fire. As stated before, it is important to ensure the grounds around your property are safe and the risk of any visitor slipping and hurting themselves is miminised.

Is your cover adequate?

Finally, check your insurance documents to ensure that you are adequately covered if the worst does happen –

  • Are your sums insured for your contents high enough to cover the extra items at the home during this time?
  • Do you have adequate business interruption cover should the home need to be closed due to fire or flooding?
  • Does your current policy give enough cover for any public in employee liability claims?
  • Does your current policy contain any terms or exclusions around theft or liability that may leave you exposed to the cost of settling a claim yourself?

If you are unsure about your cover then call the Care Team at ALDIUM for a free, no obligation review of your Insurance Schedule on 0151 336 5881 (option 1) or email us at care@aldium.co.uk