Care home insurance is a type of commercial buildings insurance policy that can protect a care home owner or business for a number of different things such as medical malpractice, infectious diseases, increased liability and residents’ contents to name a few.
In the event of fire or flood damage, the buildings and contents can be covered. Care home insurance is not a single product but can be combined with other types of business cover.
However, it is important to note that care home policies will be tailor made to meet the specific requirements of the care industry including but not limited to care homes, hospitals, charities and even home care services.
Standard business insurance does not cover all the essential protection required against the specific needs and risks associated with the care industry. Without the right cover, your business, staff, and service users may be left vulnerable.
Some insurance providers will offer you standardised options that cover your liability, buildings and contents. There will still be gaps within your policy that need to be fulfilled. Here are a few specific examples for you to consider:
Infectious disease cover: For most businesses operating in the care industry, cover against the break out of any infections is very important. Whichever insurer you select, make sure they provide the largest range of protection, some will cover all known diseases.
Medical malpractice insurance: This is absolutely vital to the care industry, you must make sure you have this protection in place. As an example, if a member of staff was to accidentally give the wrong medication to a client (care home resident), this could have severe consequences and will likely result in many legal cases.
Increased liability cover: Check to see how much your insurer will cover you for public liability and what limit of indemnity is covered. Some providers will offer £10 million as standard. If you have a higher level of cover, it will be easier to meet the needs of quality contracts that require this within their terms and conditions.
Residents’ contents cover: Any money, valuables and personal belongings for your residents will also need to be covered. Similar to standard contents cover for home insurance policies for cover away from the home, common examples may include £1,000 per person for valuables, pedal cycles at £250 and up to £100 for personal money. Most of the contents of residents will generally be covered in the total sum insured as standard. The level of cover can vary from each insurance policy, so it is important that you check beforehand what you are covered for including any limitations.
A specialist policy for hospitals, home care services, charities and other providers of care may also be available.
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There are several different types of care home insurance cover you may need, depending on your individual circumstances. Here is a breakdown of the main types of care home insurance you will want in place.
The rebuild cost of the care home will likely be the most valuable asset. Care homes are reliant on the business premises as their clients will be residing on site. Make sure you are covered for the full rebuild cost of the property. Buildings insurance will cover you for damage or repair costs. Remember to calculate things like fitted bathrooms and kitchens, swimming pools, boundary walls and any outbuildings.
Having the right buildings insurance in place should cover you against the following:
These are just a few examples of what you can expect. Read through any policy booklets for full details of cover and an exclusions that apply.
Care home contents insurance will cover items within the building that are owned by the business. This can cover anything from office equipment, furniture, and specialist care machines that assist with medical treatment or mobility. Lifts must be required by law to be fully inspected each year and may be covered under service equipment. Some insurers will carry out and manage any regular inspections within the plan at an additional cost.
Employees’ and residents’ contents will also need to be covered within care home contents insurance cover. General contents, personal belongings, valuables and money will all have different levels of cover. This amount may be different from each insurance provider.
It is a good idea to compare the different limitations and exclusions on each policy to make sure you get cover that is right for you. Some residents who have very valuable items such as jewellery and watches will most likely require a separate contents insurance policy to be covered. Remember that accidental damage cover is usually an optional extra and money may only be covered up to £250.
Service equipment such as elevators and stair lifts must be inspected on a regular basis. It is important to check the legal requirements to see if they must be checked every 6 months or on an annual basis. Some insurers will carry out and manage any regular inspections within the plan at an additional cost. Check to see if this is included as standard or if it can be added as an optional extra.
Public liability insurance will cover your legal costs for things like accidental damage, loss or injury to any third party on your business premises. As the owner / manager, you will be held liable for making sure the care home is risk free. In any unforeseen circumstances, accidents can still happen.
Most policies will cover you for £5 million but some increase this limit up to £10 million. Employers’ liability insurance is a legal requirement for any business that employs staff on a permanent or casual basis.
It can cover your legal costs and compensation expenses if a member of stuff pursues a claim against you. For example, a care home employee may have an accident at work which causes injury or damage, and you will be held liable as their employer.
If you need to take legal action against a third party (e.g. supplier) or need your own legal costs to be covered should anyone make a claim against you, legal expenses cover should be something you consider.
As standard, care home insurance policies will include some level of legal expenses cover but it is a good idea to make sure you have everything you need included.
We can all understand how frustrating a home emergency can be. The same will apply to care home staff and residents, whether it be a boiler breakdown or a broken window. Emergency cover can be included as an optional extra to ensure any problems are dealt with as soon as possible.
Elderly residents who reside in a care home will expect very high standards, if these are not met, they or their families may take legal action against you. Most care homes will have onsite maintenance staff to cover the majority of these situations but it can be useful to have immediate access to a specialist engineer, electrician or plumber in times of need.
This can cover you for any period you are unable to operate the business. For example, if there is a fire on the business premises, business interruption cover can cover the costs of logistics and additional staff while any part of the building is unavailable for use.
You will be able to claim for any extra costs from any ‘down time’ or loss of service.
Keeping a care home well maintained and up to modern standards is a full time job in itself. As you scale the business, buy additional equipment, plan extensions or carry our repairs, remember to recalculate the level of cover you will require. The amount you will need for your sum insured under both buildings and contents may also need to be increased accordingly. If you are not careful, you may end up exceeding the amount of cover you currently have which can affect you negatively in the event of a claim.
The care industry will have very high standards and these should not be allowed to fall. In the event of a personal accident which means a staff member is unable to work, additional pressure can be placed on your other employees which can create stress. Personal accident cover on a care home insurance policy could cover you for these additional costs of work due to an employee absence. These funds can go towards paying for staff replacements during this period and help you maintain a high quality service.
Some care home insurers provide their own unique features such as a 24 hour legal advice line, 24 hour stress helpline and specialist legal expenses cover. Before purchasing a new policy, take a good look to see what additional value they can bring to your business aside from standard requirements.
The amount you will have to pay for care home insurance will vary depending on a number of different factors. Here are a few rating factors:
It is important to choose a policy that is right for you, make sure you have everything you need to cover you in the event of having to make a claim.
The amount of cover you require will be based on how much it will cost to rebuild your premises and cover the replacement costs of all contents.
Your rebuild cost will be based on how much it will cost to rebuild the property from scratch (e.g. materials and labour). Often, many people confuse this with market value, which is incorrect as it factors in your location. This can be difficult to estimate so it is worth appointing a professional surveyor to correctly calculate this for you.
Similarly, the level of contents insurance should be based on how much it would cost to replace all contents within the premises. This can also be difficult to calculate, it may be worth adding up the values of all high value items and give a generous amount for each room, resident and staff member.
There are several ways to reduce the overall cost of care home insurance, here are a few options to consider:
You should now have all the necessary information you need to help you choose the right policy and level of cover. Use Utility Saving Expert’s online comparison tool to help you find cheap care home insurance.
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