Rising Insurance Premiums

Your recent insurance renewal letter may have given you a bit of a shock when you opened it…

With the recent high profile scandals in the care sector and the risk of bigger claims being pressed by lawyers on behalf of clients, the big Insurance companies and the underwriters who specialise in the care sector are getting a lot more choosy these days about offering cover and the price they charge.  The biggest insurance company, Ecclesiastical Insurance, has announced it is withdrawing from most of the care sector in March 2014 following losses on some very large claims. Ecclesiastical covered about 30 percent of all care homes in the UK and some have called this move a body blow to the care industry. Other insurance companies have raised premiums and/or reduced cover for abuse claims.  So what can a care provider do to manage insurance costs?

First point; make sure that you begin the renewal process in good time. The needs of care homes are complex and need to be examined in detail.  We suggest starting the dialogue with your insurance provider 3 months ahead of renewal date.  The risk otherwise is you may be forced to pay whatever they offer you without time to negotiate.

There are some insurers out there who are very cheap. This causes concerns because cover may be limited or they might not be collecting sufficient premiums to pay claims, or they may not be investing sufficiently in their own infrastructure, meaning that service levels may be poor.  Insurance is like care.  You want to provide good quality care but it doesn’t come cheaply; neither does good quality insurance!

One insurance broker we work with, Simcox Brokers, says the place to start is with your risk management and safety awareness.  If you can show solid evidence of quality risk management, a broker can often persuade underwriters that the risks of problems and therefore claims arising under your insurance policy is low.  And this of course translates into lower premiums for you.

All insurers will check a care provider’s latest CQC reports, but this is no more a sign that there is nothing bad in the public domain.  To show that you are well “above the line” in terms of quality and low risk, an independent assessment of quality can be a valuable asset in insurance negotiations. Doing an independent assessment says a lot about you to an insurer.  It says you are open to feedback and looking to improve and suggests you have confidence in the quality of what you do. In turn, that engenders confidence on the part of the insurer.