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Surgery Insurance - Case Studies

Surgery Insurance Appraisal - Our findings

A specialist surgery policy should protect the business against many common incidents such as escape of water, theft, flood, smoke, fire damage loss of income and  public /employers liability.

Without specialist help purchasing insurance can sometimes be time consuming and complex. What's more startling is that having purchased a policy, there may be some material issues that may not be obvious until a claim is made.

In 2015 we found that 91% of the surgeries we appraised by visiting them had a material issues that could have affected the outcome of a claim or had an adverse financial impact on the business, not to mention 65% had more than one issue. The most common issues were:
  • Underinsurance - value of replacing contents/rebuilding property was underestimated in one example by over 400%
  • Over-insurance - paying too much premium for cover that surgeries don't need in one example wasting xxx in premium
  • Non compliance to policy terms - conditions set by the insurer were not being adhered to, i.e. not meeting security conditions or complying with annual tests on equipments or giving an accurate description of the surgery materials or activities
  • Inadequate Business Interruption cover - no cover in place at all, turnover values that have not kept up with business growth  or underestimating how long it would take the business to recover trading and recover lost patients following a large loss
  • Insurers not advised of changes - for example expansions & increase in business revenue etc
  • Failing to insure fixtures and fittings as part of the surgeries assets or insuring them in the wrong area of insurance cover can meaning paying a lot more than you need to

Case Study 1 - Underinsurance

In January 2015, we contacted a surgery to offer a quote. Our consultant discussed cover requirements and was advised the surgery needed the contents covered at £18,500, buildings at £200,000 and the turnover was around £28,000. These figures were taken from their current insurer.

The consultant explained that the business turnover is very low and that they may not be adequately insured. In addition, the size of the surgery meant they could very well be underinsured for their contents and buildings.

As part of our service, the consultant offered the surgery a free and without obligation appraisal and customer agreed.

The appraisal results were startling. Our appraiser concluded that the contents was underinsured by 400%, they should have been covered for £74,000. The building was underinsured by £200,000 and the turnover was actually around £1m.

This meant that the current insurance held by the surgery, would leave them with a substantial bill should an unfortunate event have taken place. Thankfully the surgery didn't need to make a claim. Following the appraisal the surgery decided to place their cover with us.

Case Study 2 - Non compliant to policy terms

In November 2015, our consultant offered a surgery an appraisal as he couldn't determine the customer needs over the phone.

Our appraiser reviewed the surgeries current cover and identified that the surgery was not complying with the insurers terms. The surgeries current policy stipulated that a roof inspection was needed and failure to do so meant parts of the cover would  be void.

In addition to this potentially business changing loss r the  surgeries contents were also underinsured by £43,000. Thankfully no incidents had taken place and we were able to offer better terms and cover for customer on the right basis.

2015 Appraisals Report

We conducted a geographical spread of 123 surgery appraisals  and the findings are shown below:

'WESLEYAN’ is a trading name of the Wesleyan Group of companies.

Wesleyan Assurance Society and Wesleyan Bank Ltd are authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Wesleyan Financial Services Ltd, Wesleyan Unit Trust Managers Ltd, Practice Plan Ltd and DPAS Ltd are authorised and regulated by the Financial Conduct Authority.  Advice about investments, insurance and mortgages is provided by Wesleyan Financial Services Ltd.

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