Care Home Insurance
A care home is one of the more complex occupancies to insure, principally because residents may have additional mobility or care needs that affect evacuation planning. Fire strategy is built around moving people sideways to a place of relative safety rather than out, and everything an underwriter asks follows from that.
Care homes have a particularly broad liability exposure. Claims arise from falls, pressure injuries, medication errors, scalding and allegations of abuse or neglect, and they are brought by families as well as residents, sometimes years after the event.
Regulation runs alongside the insurance. Regulatory registration is fundamental to the operation of the business, and an inspection outcome that suspends or restricts it stops the income while the building stands undamaged, which is a different loss from anything the property section answers.
We can advise care home owners and operators on insuring the building, the residents' safety, the staff and the registration the business depends on.
Common claims and risk exposures
The exposures that produce claims in this trade, rather than a generic list.
Residents who cannot self evacuate
Progressive horizontal evacuation depends on compartmentation holding while residents are moved to an adjoining zone. That makes fire doors, resistant construction and staffing levels at night the things that matter most, rather than how quickly the building empties.
Night staffing and response
The number of staff on at three in the morning determines how many residents can be moved and how fast. Insurers ask about night ratios, and about how the home would cope if the person who knows the building best is not the one on duty.
Abuse and neglect allegations
The most serious liability exposure in the sector. Allegations may concern staff, other residents or historic events, carry reputational and regulatory consequences alongside the claim, and are defended on recruitment, training and record keeping.
Clinical care and medication
Administering medication, managing pressure care, moving and handling, and recognising deterioration are clinical activities. Claims arising from them need medical malpractice cover, which is not part of an ordinary public liability section.
Loss of registration
Where the regulator suspends or cancels registration, or embargoes admissions, income falls immediately. The building is undamaged, so the property and business interruption sections do not respond, and a specific extension is needed.
The cover we arrange
We arrange insurance around the property, its use, construction, occupancy and ownership structure. The cover available will depend on the individual risk and the terms offered by insurers.
Buildings
The structure on a reinstatement basis including adaptations: lifts, hoists, call systems, ramps and specialist bathrooms, which are a substantial part of the cost of reinstating a home to the standard the regulator requires.
- Structure and specialist adaptations
- Lifts, hoists and call systems
- Professional fees and debris removal
- Rebuild to current regulatory standards
Public liability and medical malpractice
Injury to residents, visitors and the public, together with claims arising from the care itself. The malpractice element is what distinguishes this from any other property class and should not be assumed to be included.
- Falls, scalds and moving and handling
- Medication errors and clinical care
- Limits commonly £5m or £10m
- Residents' visitors and contractors
Abuse cover
Defence and damages for allegations of abuse or neglect, including historic allegations where the policy allows. Terms vary considerably between insurers, and the basis on which historic claims are treated is worth reading closely.
- Allegations against staff or residents
- Defence costs included
- Historic allegations where covered
- Often a separate limit
Loss of registration and regulatory cover
Income lost where registration is suspended or restricted, and the cost of representation at inspections, investigations and inquests. Sector specific and frequently missing from a general commercial policy.
- Suspension or cancellation of registration
- Embargo on new admissions
- Legal representation at inquests
- Regulatory investigation costs
Business interruption
Income lost while the home cannot operate, with an indemnity period that recognises residents are placed elsewhere during a closure and do not simply return when the building reopens.
- Income during closure
- Indemnity period of 24 or 36 months
- Cost of relocating residents
- Rebuilding occupancy after reopening
What an underwriter will ask
Having these to hand shortens the process considerably, and usually improves the terms.
- Number of registered beds and the categories of care provided
- Dependency of residents, including nursing, dementia and end of life care
- Evacuation strategy, compartmentation and fire door condition
- Night staffing ratios and how they compare to daytime
- Sprinkler or suppression protection, and detection coverage and grade
- Regulator rating, the date of the last inspection and any conditions imposed
- Recruitment, DBS checking, training and supervision arrangements
- Claims history, separating property, liability, malpractice and abuse allegations
What affects the cost of your insurance?
The main factors insurers consider when assessing the premium.
Dependency and category of care
Residential care rates more favourably than nursing, and dementia or challenging behaviour higher again, because both the evacuation problem and the clinical exposure increase with dependency.
Fire protection and evacuation strategy
Sprinklers, full detection, intact compartmentation and a workable horizontal evacuation plan are important factors insurers consider, and on some homes they affect whether cover is available.
Regulator rating and inspection history
A good rating with no conditions supports terms; a poor rating, an embargo or repeated conditions will restrict the market. Insurers read it as evidence about management rather than just compliance.
Claims and allegations history
Liability and malpractice history drives this class more than property claims. A pattern of falls or pressure injury claims suggests a systemic issue and is rated accordingly.
Conditions and exclusions to consider
Terms vary between insurers, so treat these as the questions to ask rather than a description of any one policy.
Malpractice assumed but not bought
A general public liability section does not necessarily answer a claim about clinical care. Where medical malpractice is not specifically included, the most likely claims in a care home may be the ones that are not covered.
Abuse cover written on a narrower basis
Some policies exclude historic allegations, or respond only where the alleged act occurred during the period of cover. In a sector where allegations frequently surface years later, the basis matters more than the limit.
Fire precautions not maintained
Wedged fire doors, blocked compartment lines and detection out of service undermine the evacuation strategy the terms were built on. In a building where residents cannot self evacuate this is treated with particular seriousness.
Regulatory penalties and fines
Fines imposed for regulatory breaches are generally uninsurable as a matter of public policy. The defence and representation costs can be covered; the penalty itself cannot.
Common questions
Is medical malpractice included in our public liability?
Not automatically, and it is the gap worth checking first. Public liability answers a visitor slipping; malpractice answers a claim about medication, pressure care or clinical judgement. In a care home the second is the more likely claim, so it needs to be named in the policy rather than assumed.
Does insurance cover an abuse allegation that proves unfounded?
Defending unfounded allegations is one of the main reasons abuse cover exists, since the cost of defence arises whether or not anything happened. Check how your policy treats historic allegations, because that is where the wordings differ most.
What happens if our registration is suspended?
Income stops while the building remains undamaged, so the property and business interruption sections do not respond. Loss of registration cover is the extension that deals with it, and it is frequently absent from policies sold as general commercial packages.
Do we need sprinklers?
Not universally required, though requirements have tightened for new and converted premises. Where residents cannot self evacuate, sprinklers materially improve both the safety case and the insurance terms, and in some homes they are what makes cover available at a sensible price.
How do I get a quote from True Risk Solutions?
Call 01304 262880 and speak to a broker, or email info@truerisksolutions.co.uk with what you do, what you need cover for and a phone number with the best time to call, and a broker will call you back. We need a phone number to quote, because the cover and the price depend on questions that are quicker to answer on a call than by email.
Speak to a specialist who understands your industry
Tell us about your business and the work you undertake, and we will come back to you with cover options built around it. Call 01304 262880, or email us with a phone number and the best time to call and a broker will ring you back.