Having the right level of cover in place
To avoid ending up out of pocket, it’s important to make sure you have the right level of cover in place for your premises. This means assessing whether your surgery is over or under-insured.
When settling a claim, your insurance provider will appoint a Claims Adjuster to assess any loss or damage to your property, and to ensure that all conditions of your policy are met. Where it’s deemed that a property is under-insured, there’s likely to be a shortfall in your payout should you need to claim.
For example, let’s say your business contents are insured for £100,000, but the actual replacement value of your contents is £150,000. Your practice then suffers water damage unexpectedly from a broken pipe that leads to a cost of £30,000.
In this scenario, you would only receive a £20,000 payout (minus any excesses). This is because your insurer would settle the claim by dividing your declared sum (£100,000) by your actual sum (£150,000) and multiplying that figure by the amount claimed (£30,000).
On the other hand, being over-insured means you’re probably paying more for your insurance policy than you need to.
For example, having blanket cover of £100,000 may seem like a good idea on paper, but if the value of your contents only adds up to £70,000, that’s the maximum amount your insurer will pay out in the event of a claim. So, you’re paying for £30,000 of cover you don’t need.
Understanding the conditions of your policy
While it might be tempting to skip the small print of an insurance policy, it’s important to know what all the terms mean as they can affect the outcome of your claims and the payout amount you’re offered.
Some common insurance policy conditions include:
A warranty is simply a set of conditions that you must comply with as a policyholder.
For example, when you’re arranging surgery insurance, you’ll be asked about the security you have in place at your premises.
Your insurer may set minimum-security requirements that you will need to meet in order for you to be covered against burglary or theft – for example, a five-letter mortice deadlock for extra protection. This would be classed as a warranty.
An endorsement is when your insurer decides to amend the conditions of your original policy.
If your insurer considers your premises to be located in a low theft area, and that you have adequate security in place, they may not require you to fit this type of lock. This would be classed as an endorsement.
An exclusion highlights which parts of your policy have limited cover or are excluded.
If your insurer considers your premises to be located in a high theft area, they may insist on removing the part of your cover related to theft. This would be classed as an exclusion.
Providing information to your insurer
As a busy practice owner, it’s easy to fall into the trap of not providing your insurer with important information relating to your surgery – not because you don’t want to, but because you may not realise it’s important enough to affect your cover.
For example, if you share facilities with a neighbouring business, this may impact the conditions of your policy later down the line.
This is where seeking advice from a specialist insurance provider can help. They’ll be able to carry out a room-by-room assessment of your surgery and make recommendations for the level of cover that is suitable for your practice.
Many Practice Managers worry that this process will drive up premiums, but it’s important to remember that the only priority for your insurer is making sure you’re adequately covered should the unexpected happen.
Regularly reviewing your building and contents insurance
In any GP practice or dental surgery, there will be a number of changes that happen to your premises throughout the year.
For example, you might:
- Purchase new equipment
- Increase your medication stock
- Update your security system
- Build an extension
- Refurbish your waiting room
It’s important to keep your insurance provider informed of these changes in case it impacts your cover.
Many practice owners make the mistake of reviewing their contents when they come to renew their policy, but if you make a claim before then, your new purchases or building changes may not be covered. This increases the risk of a shortfall in your insurance payout in the event of a claim.
If you’re carrying out structural changes to your building, be sure to seek advice from your insurance provider or broker before the work commences, as you may need to increase your level of cover.
Prioritising price over practice needs
As a business owner, it’s understandable to want to save on costs where possible. But when it comes to insurance, it’s wise to concentrate on protection against unforeseen threats to your business assets and income, rather than immediate savings.
Instead of focusing on price, look to purchase value for money. For example, advised policies may cost more initially, but you’ll be receiving recommendations that are tailored to your specific business needs.
With this in mind, you may want to consider getting in touch with a specialist insurance broker that can offer in-depth knowledge of your business and the cover you need to protect yourself against potential risks.