Navigating the world of insurance and ensuring you have appropriate cover is important. The responsibility for ensuring adequate insurance is in place falls to case management companies and individuals, although insurance providers and brokers can help to assess your needs and recommend types and level of cover. Increasingly however, case managers are finding they need to understand more about the details and levels of indemnity to be able to provide and discuss this information with referrers.
Understanding and reviewing insurance cover for case management is probably not an activity greeted enthusiastically by most and whilst clearly being centrally important it can also seem an opaque subject in terms of the details and meanings behind policy wordings. Insurance providers and brokers should be able to explain the cover needed and what the policies mean and this article can assist in being able to engage in discussing your past, present and future policy needs and insurance provision.
Insurance industry expert David Balen from Balens Insurance presented a recent webinar that delved into the types of insurance case managers require and the crucial differences in policy wordings.
David outlined that insurance policies are legal documents that provide different types of coverage depending on requirements. In addition to the usual Employers and Public Liability Insurance which are necessary for businesses, case management companies should have cover for the full extent of their professional activity. Case law and duty of care inform the thinking around the professional responsibility for the work health and social care professionals do with and for others. Case managers should consider adding Medical Malpractice and Personal Injury cover to their insurance in addition to Professional Indemnity.
Terminology is important
David advised on the importance of understanding the legal underpinning and the terminology within insurance policies. The following glossary will provide a useful starting point when reviewing your policy (and reading the rest of this article!)
Glossary of Terms
Below is a glossary of some of the terms used in the presentation with an explanation of each:
Medical Malpractice Insurance
Also known as Medical Liability Insurance, Medical Malpractice protects healthcare professionals in the event of allegations of Medical Malpractice or clinical negligence.
Insurance that protects those offering professional services against claims for loss or damage made by clients or third parties as a result of negligent service or advice provided, even if the service or advice was free.
Personal Injury Cover
Insurance that covers medical or rehabilitation expenses for people involved in an accident, limited to a specific amount.
Insurance that covers employers in the event of injury or illness sustained by an employee because of work undertaken on behalf of the employer.
Insurance that covers individuals, businesses and non-commercial organisations against any claims for injury or damage for which they are liable.
Insurance that protects against claims brought for personal injuries, loss or damage caused by faulty products and unforeseeable circumstances which includes equipment demonstrations.
Statutes of Limitation
The amount of time set by law to bring a claim or criminal charges against an individual or company after which a claim cannot be made.
Claims Made Basis
A term within an insurance policy that only provides cover for any claims which are notified during the term of a policy. This is not always the same period when the actual incident caused the claim.
Insurance that provides cover for businesses or individuals where trading has ceased and insurance policies are no longer in force.
Indemnity to Principal
A clause in an insurance policy that allows for the end principal (client) to be indemnified following a loss as opposed to the policyholder and any payment will be made directly to the principal.
Any one occurrence
Covers claims up to the policy limit but there’s no limit to the number of claims as long as the policy limit is not exceeded.
An arrangement where an insurer transfers all or part of a risk to another insurer so they protect against the risk of the first insurer.
The coverage of services that were undertaken before the start of a policy
The start date of retroactive cover that does not cover risks before the inception of the policy.
Understanding the Claims Process
If it is deemed that the duty of care has been breached, then the person who has suffered due to the breach has the legal right to make a claim. The two questions that are then asked are:
- How long does a person have to make a claim should this become known to them?
- When and how does it become known?
The UK has generous Statutes of Limitation, such as three years for Personal Injury claims and six years for others, such as slander, data issues and financial loss. In the event of minors or vulnerable people, such as those with learning difficulties, the limits are almost indefinite.
Claims are made from the date of discovering the problem, not the date it occurred. “This is where things can begin to extend beyond the reach of many Claims Made policy wordings that and can lead to contractors asking to look at the insurance policy wording,” says David. If the policy that was in force at the time has no Run-off Cover’ in place, it can become a more significant issue.
Case management companies may have Professional Indemnity and Medical Malpractice on their policy already. If this is the case on a Claims Made basis, the insurance company will continue to pay as long as the policy is kept current. The policy can be upgraded each year and needs to be retrospectively applicable to be applied to claims made for previously completed work. If, however, there is no run-off security within the policy, it can be purchased separately. If run-off cover is purchased, payments must continually be made to remain covered. But if an insurer exits the marketplace, the cover will stop and alternative insurance needs to be sought from an insurer who is willing to cover for previous work.
If a policy was to be stopped for any reason, the cover would not be in place. This must be considered before stopping a policy, and deciding whether to purchase run-off cover to guard against future claims.
Examples of where policies have stopped include:
- Maternity leave
- Injury or illness
The other alternative is the Claims Occurring policy which is typically used with Public Liability (PL) or Employers Liability (EL) cover. These are general liability insurances, not Medical Malpractice or Professional Indemnity cover., Balens combines the two into one policy which prevents issues with run-off and the work is ‘locked in’ to the year that the work was carried out. In addition, they included a backwardly compatible clause so that (provided there were no previous claims) it would be possible to run it back and increase the amount of cover.
Case Managers will also need PL insurance if they are present on a premises in the course of work, such as a client’s home, in which Case Management is involved. In addition to PL, it may also be advisable to consider Product Liability insurance, which covers items or equipment that are being demonstrated, adjusted and adapted rather than something that is intended for sale.
EL cover is needed if employing people which, in addition to office-based staff, extends to carers and support workers if they are employed by the company. This also includes students and volunteers and is designed to protect companies financially if people are injured whilst working under company supervision. Some companies may be reluctant or refuse to cover healthcare professionals, so this may need researching to ensure all staff are covered despite the differing roles.
A Checklist for Case managers Reviewing Their Insurance Cover
David has provided a checklist to assist case managers to review insurance policies and needs:
|✔ Does cover exclude Limited Companies? (usually on an association scheme eg BAOT, ASLT it does)
|✔ Does it include indemnity to principal, or if a contractor, does it indemnify your subcontractors?
|✔ If you are a contractor, does it require all of your subcontractors to have their own insurance (and especially cover that indemnifies you)?
|✔ Does it exclude any work involving specification etc for buildings (adaptations, design etc)?
|✔ Is it on a Claims Made or Claims Occurring basis?
|✔ If Claims Made, does it include retroactive cover for previous work performed? If so, to what previous date?
|✔ If Claims Made, what provision is there for run-off if policy stops, for how long and how much? Is it guaranteed?
|✔ Any excesses requiring you to pay the first part of a claim?
|✔ Is the indemnity limit inclusive of legal and other defence costs in the total cover, or are they unlimited per each claim, or amount per claim?
|✔ Does it cover a maximum of £5m or £10m in the whole year (aggregate basis) or is the number of £5/10m claims unlimited in the year?
|✔ Is it only based on financial loss claims or does it include Malpractice causing injury or death?
|✔ Does it include Public and Products liabilities – if so on a Claims made or occurring basis?
|✔ Do you need separate Employers Liability cover for employees, students, volunteers etc? (Usually £10m is easily available on an occurrence basis)
For more information including the Q&A session between David Balen and an audience of case managers please follow this link to view the webinar recording.