Care home insurance – can risk management halt the rising cost?
Concern over the management of care homes in the UK is a topical and sensitive issue. Mismanagement of care homes has now begun to take precedence over the sector’s widely publicised financial difficulties.
More recently, high profile incidents such as those seen at Winterbourne View in Bristol and Ash Court in London, and the associated media attention, has renewed public awareness of this whole issue. One of the leading insurers in the care market has recently reported a tenfold increase in the number of alleged, abuse, neglect or “failure to provide care” claims.
Frequency of Claims
General claims frequency is also on the increase. The stimulus for this being recession and a lack of loyalty to the employer. These are major factors in the propensity to claim, along with low pay and the mobility of labour.
The cumulative effect of the above will undoubtably affect the insurance market, and in some cases, has already influenced the market as insurers pull out of the sector and there is more pressure on the remaining providers to increase premiums.
The Possible Remedy
How can we stop premiums increasing or at the very least minimise increases?
The most important thing is to understand and address the risks within services. Operators can achieve this by implementing an effective risk management programme, and having a robust health and safety regime in place. Care home operators, insurance companies, and financial institutions are going to need to communicate effectively to create transparency around processes that minimise the degree of risk within the service.
Risk management processes are critical to the future of the industry. Whilst risk management is already considered essential to the proper care of clients, it will become imperative that these measures are comprehensively and transparently communicated to insurers so that they can better understand the businesses risk profile and manage premiums. This may mean sharing information with insurers, as far as the Data Protection Act will allow, to evidence that a robust and structured approach to quality and risk management is in place.
About D E Ford
D E Ford Insurance Brokers Ltd is a York based, independent Insurance Broker with over 30 years experience in the care home sector, insuring care homes throughout the UK.