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Why compliance and insurance go hand in hand (includes Free Insurance Renewal Checklist)
The article was first published on The Carer - Issue 28
It has been a tough year for the care sector. According to a study by LaingBuisson, more than half of English care homes have been hit by COVID-19.
Many insurance premiums have risen too. A recent National Care Association survey revealed that 68 percent of members interviewed had reported significant increases in their insurance premiums. While the average premium has risen by 20 percent, one provider reported that their renewal quote had increased by 880 percent.
High premiums not the fault of insurance providers
But before I go any further, the point of this piece is not to criticise insurers. Not only would that be unfair, it would also miss the point. Insurers and brokers are not guilty of profiteering. They are simply reacting to risk. Right now, due to the COVID-19 crisis, potential liability risks are myriad. Insurers have to consider employee claims, public liability claims, not to mention, claims made by residents.
It is a point not lost on Mike Padgham, the chair of the Independent Care Group. In August, Mr Padgham, told Carehome.co.uk “I do have some sympathy with the insurance companies because they’re worried about the risk, which is why I want the government to step in and help the industry.”
Securing a competitive renewal quote in the Pandemic
The question is, what can care providers do to lower renewal quotes? With around 100,000 users, QCS, the company I work for, which provides best practice content, guidance and technological care solutions for care sector, receives many calls from our customers searching for advice. So frequent are these calls in fact, that we’ve been collaborating with one of our closest partners, Howden Care, a specialist insurance provider for the care sector, to shed new light on the steps providers should take when approaching their insurance renewal.
Part of the challenge says Becky Newman, Associate Director of Howden Care, is that, “Providers may be used to working in a certain way with their broker which may now need to change. QCS and Howden are helping providers to prepare and be aware”.
Both organisations have teamed up to create a comprehensive checklist, which you can download at the bottom of the page.
Compliance management tools can help
At QCS, we believe that forging a closer union with insurers and brokers is not only a positive development, but a necessary one. Why? Well, the vast majority of providers who use our policy, process, content, guidance and auditing tools go on to achieve a ‘good’ or ‘outstanding’ CQC rating. This, in turn, give themselves a better chance of securing the insurance cover they need to continue operating.”
It is a view largely shared by Howden. Mrs Newman says, “Compliance management won’t necessarily translate immediately into lower premiums but in a hardening market, being able to demonstrate robust risk management and procedure compliance can help set a provider apart. In addition, compliance management can help create a defence against any allegations of negligence against the provider which could help them to manage a favourable claims experience.”
But compliance management aside, what are the key steps that every provider should follow when speaking to their broker?
Firstly, it’s vital that brokers are given adequate time to explore all the options. Therefore, in terms of engagement, Howden Care advises that care providers contact their insurer six weeks before renewal, and divide the renewal process into manageable stages.
Becky Newman says, “Providers should consult their broker for advice on potential options and those seeking terms should ensure that they understand their position well ahead of renewal. This is vital to ensure an informed decision is made when planning ahead. Certain timeframes will be required when approaching the market. A provider’s broker will potentially be speaking to more than one insurer this year in order to seek competitive terms, and this may take some time.”
Plan in some time to complete additional renewal forms
Insurers may well require extra information from providers this year, such as proposal forms for alternative quotes, or more information surrounding infection control procedures.
Mrs Newman says, “A timely submission of forms may open up more options for providers. Howden advises that operators seeking renewal quotes should consider and prepare financial forecasts in advance. Having this information ready, along with any other revisions to requirements for the coming insurance period can help speed up the process.”
Mrs Newman advises care providers to discuss any incidents of COVID-19 (amongst their service users and staff) with their broker. She says, “They may need to report these to insurers before the renewal date as a precaution and the information will be a ‘material fact’ for any new insurer who is looking to provide them with terms.”
Importance of favourable regulatory inspections
With fewer insurers now considering renewals for providers where the latest CQC inspection rating is recorded as ‘requires improvement’ or ‘inadequate’, securing a ‘good’ or ‘outstanding’ rating is vital.
By placing the most up-to-date content in the hands of frontline care workers, and furnishing them with the latest guidance and standards, the QCS system helps care workers to deliver the best care possible. But, its vast range, which include risk assessment, auditing and inspection tools, also gives managers and their staff a solid platform to secure an outstanding CQC rating.
For those providers who don’t secure a favourable CQC rating, Mrs Newman, has the following advice.
“If providers are in this position, it is essential that they engage with their insurance broker early. We would recommend that they have an action-plan available with surrounding commentary on improvements that have been made. Having this information available from the outset could help secure terms.”
With insurance premiums increasing considerably across the sector, Mrs Newman says, “Providers should speak to their broker about what to expect so they can prepare. They can also discuss options for paying monthly with a broker, and look at the best interest rates available.”
Careful review of terms
Providers should be aware of potential new limitations or exclusions within their terms. Howden recommends that time be set aside to review documents carefully with a broker. Becky Newman adds, “They (the broker) will be able to carefully review the terms with providers, pointing out any changes in cover and any potential consequences.”
We've also prepared a checklist to help providers plan for every single stage of the renewal process.
To download the Insurance Renewal Checklist, click here
*All information is correct at the time of publishing. Use of this material is subject to your acceptance of our terms and conditions.