5 things to consider when arranging practice insurance

At Lloyd & Whyte, we’ve been helping medical professionals protect their practices for over 20 years – so you could say we know a thing or two about your needs. As the AOP’s appointed provider of insurance, we understand your situation and individual needs. This also means that when it comes to making a claim, we’ve handled similar situations before.

What is practice insurance?

It’s a type of business insurance designed to protect your healthcare premises. As a combination of insurance covers sold as a ‘package policy’, it allows you to satisfy most of your essential insurance requirements at once.

Practice insurance normally includes cover for:

• Contents; everything inside your premises including stock
• Buildings; the physical structure of the property, if you own it
• Business interruption; for loss of income in the event of a claim
• Public liability; in case a member of the public is injured on the premises and sues you
• Employer’s liability; in case an employee is injured whilst performing duties and sues you
• Legal expenses; contract, employment and tax disputes
• Fidelity; specific cover in case an employee steals from the business

Additional covers for AOP members:

• 50% seasonal contents cover increase (cover is for a limited time only)
• Shopfront/glass cover limit up to £500
• Goods in transit cover limit up to £2,500

Insurance can be a confusing subject. To help, we’ve put together 5 things you need to consider when arranging insurance for your practice:

1. Buildings and contents

Cover for buildings and contents are the nuts and bolts of your insurance policy. Each element is insured for an agreed total amount, called the ‘sum insured’. It’s up to you to define your sum insured – you should insure on a new for old basis. While your insurance company will offer guidance, it’s ultimately your responsibility to get it right. Overestimate and you’ll be paying too high a premium. Underestimate and you’ll be underinsured. Being underinsured can have dire consequences should you need to make a claim.

There’s a simple test for working out whether something is covered under buildings or contents. Imagine if you were to pick up your practice, turn it upside down and give it a shake – anything that falls out is considered contents; anything remaining is covered under buildings. Use our practice insurance contents calculator.

Don’t own the building?

Your insurer will need a declared value for your tenant’s improvements. This can be calculated in the same way as your contents. Redecoration made by the landlord before or during your lease does not constitute tenants improvement. This would need to be covered by the landlord’s own insurance. To fall under this area of cover, these must refer to changes that you have made as a tenant, while you have occupied the premises. This includes things like flooring, wall coverings, ceilings, partitions and air conditioning units. Tenants improvements are changes made to a property by the tenant themselves.

2. Business interruption

When your premises are unfit to accommodate patients as a result of material damage, business interruption cover will ensure you are not missing out on income. Therefore, it is imperative this element of cover is calculated correctly to meet your needs. Business interruption covers money paid or payable to you in the course of your business. It also includes extra expenses, which are costs that are incurred by you to minimise the interruption to the business.

Areas to consider under this section are: increase in rent, rates and taxes, salaries of additional employees and overtime payments as some examples. It’s important to check your cover is as comprehensive as possible, policies from different providers can cover different elements. Another area to consider under this section is the indemnity period which is the length of time this section of the policy will pay out for as a result of damage. It’s important you ensure this period of time is sufficient in the event of a loss, to get your business back up running.

3. Public liability & employer’s liability

Public liability and employer’s liability insurance cover potential risks to employees and members of the public visiting your practice.

If a member of the public were to injure themselves on the premises and feel you or your team were at fault, public liability would cover the costs involved in defending and settling any subsequent lawsuit. Employer’s liability provides similar cover with respect to your employees, where benefits are provided in order to fund compensation or legal fees should an employee be injured, made ill or killed at work.

Due to the unpredictable nature of these types of incidents, expenses involved in legal proceedings can be exceptionally high.

4. Legal expenses

This area covers the cost of preparing a legal case in certain circumstances. The types of scenarios covered will be outlined in your policy wording, however should cover most of those likely to affect your business. Often, they include such things as employment disputes, criminal prosecutions, data protection violations or tax investigations. Many practices pay out for a separate policy for tax investigations so providing the cover under a package policy is the same, you could save money by not having the need for separate cover.

5. Assessing your needs

As you can see, there’s quite a lot of depth to practice insurance. When you come to arranging or reviewing your policy, having the following information will make the process a lot smoother;

• Inventory of contents
• Property rebuild value
• Average monthly revenue
• Disaster recovery plan

Guaranteed saving of at least 10% on your next practice insurance renewal

As long as you haven’t had more than three claims in three years and the cover is similar, we guarantee to save you at least 10% on your next renewal.