FAQS: Insurance Implications for Primary Care Networks
The formation of a PCN brings new challenges so it is vital to ensure you are properly protected.
No two PCNS are the same, so each will need specific solutions. Here at Lloyd & Whyte we make sure your cover is bespoke to your circumstances. We understand this sector and can advise you accordingly.
Three years on from their launch in 2019, there is still some confusion around the set up and insurance requirements for PCNs and Federations. Here are some commonly asked questions with answers to help you understand what you need to know about protecting yourself and your staff.
Question:
Is the legal structure and set up of our Primary Care Network important?
Answer:
Yes. The legal structure you adopt must support your proposed operation model. You need to agree who will employ your staff and what services are being delivered and by whom. This will also determine where your legal and financial liabilities will sit.
There are several structural options open to running a PCN; – Flat, Lead Practice, Super Practice, and Federation provider. The most popular structure for a PCN is either a flat network, or a network with a lead practice. Whatever form it takes, it is effectively a legal joint venture.
Question:
Why is a partnership agreement important?
Answer:
A PCN is a collaborative working partnership and as such operate as a legal entity. All parties within the PCN have joint and several liability for costs and it is vital that the lead practice has a valid partnership agreement in place, as they will be holding PCN Funds.
Question:
We have Clinical Directors acting on behalf of multiple practices, so, what cover is needed?
Answer:
Any decision makers within the PCN accused of Errors and Omissions will need Directors and Officers Insurance.
Question:
Why does a PCN/Federation need Professional Indemnity and Management Liability cover?
Answer:
The PCN must have a Clinical Director or board of directors to provide overall governance, leadership and strategic direction of the PCN acting on behalf of multiple practices. Should they be found to be liable of wrongdoing, their employer (whether that is the practice or a PCN set up as a limited company) would need to cover the legal and compensation costs themselves.
Whilst clinicians may have their own individual indemnity protection, it gets more complicated when care is shared between several clinicians. If direct responsibility cannot easily be determined, then the employing entity, i.e. the PCN or Federation and its directors, could be implicated. Liability for malpractice may be direct or vicarious, meaning that the organisation can be held liable for the acts of its employees.
With responsibility comes accountability, so it is important that any clinical director (the board) should have this cover if they are making decisions that relate to the business, whether a strategic or policy decision, or implementing standards of practice. Professional Indemnity cover is designed to protect the business in the first instance; with some policies have extensions of cover to include the employing entity if they are jointly named in litigation with the insured person. The insurance covers legal defence costs and possible compensation.
Management Liability covers the cost of legal action and any civil settlements from allegations of wrongdoing, directed at the company as a whole or its managers, directors, and officers.
Question:
Won’t State Backed Indemnity be enough?
Answer:
Standard GP Medical Malpractice (treatment risk) insurance or CNSGP will not extend to cover the types of issues above, nor can it protect all issues which arise from managing the business contracts. State Backed Indemnity deals with claims resultant from clinical negligence.
Question:
Will having a Limited Company (Ltd) status protect the practice manager?
Answer:
No, a Ltd company status does not protect the practice manger from any claims arising from bad administration or policy advice, such as Health & Safety.
Question:
I have got Employees working across different sites, what do I need to cover them?
Answer:
If you are employing staff directly you need Employer’s Liability and Public Liability Insurance – to cover those working on behalf of the PCN, across practices.
Question:
What if we have an issue with an unfair dismissal claim?
Answer:
Employment Practices Liability is a facet of a management liability policy which covers traditional legal disputes that often arise between the business and a third party as well as the business and an employee, such as any HR and employment disputes.
Question:
How do we protect ourselves against possible Partnership Disputes?
Answer:
Legal Insurance, such as that provided by our wrap around policy provides legal indemnity, underwritten by ARAG. This also covers Medico-legal assistance and Insurance Contract disputes.
In Summary
Apart from contents, buildings and cyber cover, a federation or PCN’s insurance requirements revolve around liabilities – public, employment, management and professional. Any organisation that is setting up separate entities to deliver primary healthcare services scope will need Professional Indemnity, Directors and Officers Insurance, Legal Insurance and Employment Practices Liability
Ordinary business insurance may not be suitable for a Primary Care Network or Federation so it is advisable to seek professional advice. As your primary care network progresses, the issues you face will vary and change. That’s why it’s important to make sure you’re covered with an insurance plan designed for your network’s needs.
