Abuse in care homes – would your insurance cover be able to respond?

Recent research carried out under lead author, Dr Claudia Cooper, a psychiatrist at University College London (UCL), has revealed that staff in care homes across the country, are struggling to cope with the demands placed upon them and are increasingly at risk of allegations of abuse.

Dr Cooper states: “We found low rates of verbal and physical abuse; the abusive behaviours reported were largely matters of neglect. These behaviours were most common in care homes that also had high rates of staff burnout, which suggests it’s a consequence of staff who are under pressure and unable to provide the level of care they would like to offer.”

Researchers anonymously questioned 1,544 care staff from 92 homes across the country, asking them to describe what they had seen or done in the past three months. They were asked if they had carried out or witnessed either positive or abusive behaviour. Examples of abuse were reported in 99% of the care homes involved in the survey.

What is abuse in the context of insurance?

When we consider the meaning of abuse it is common to relate to abuse of a sexual nature, however in fact abuse has a much broader definition than this. In the context of an insurance coverage, abuse means bodily injury or stress which is caused by one or a combination of the following:

  • physical abuse;
  • sexual abuse and molestation;
  • financial abuse;
  • emotional and psychological abuse; and
  • neglect.

Is your abuse cover claims made or claim occurring?

In a majority of abuse incidents, the allegation may not arise until several years after the incident has occurred. For this reason it is critical that an organisation understands how their insurance cover will respond. Abuse cover is offered either on a ‘claims made’ or ‘claims occurring’ bases.

A majority of insurers now offer abuse on a claims made wording and believe this is the future of the insurance market. However, there is a strong argument that organisations are better protected in the longer term if their abuse cover is on a claims occurring wording.


What are the differences?

The features of a Claims Made abuse wording

A claims made policy will reference a retroactive date. The retroactive date should always be the date abuse cover was first purchased. For any claim to be covered, the policy must be in force the date the claim is made and result from services provided by your organisation on or after the retroactive date.

Organisations may be surprised to know that abuse cover automatically ceases to exist if the policy is cancelled for any reason leaving the organisation unprotected.


Measures your adviser will need to take when moving a claims made insurance policy

Insurance brokers must carry out a number of important measures when moving a claims made cover from one insurer to another, these include:

  • Abuse cover must be sourced retrospectively with the new insurer. Without this consideration the new policy would not cover any claims arising for services prior to its inception date. Claims reported after the policy is cancelled will not be covered even if the work undertaken was when the insurance was in force.
  • Prior to cancellation, all known incidents which may give rise to a claim must be notified to insurers. Failure to report may result in claims being declined.


The potential pitfalls

A new insurer may charge an additional premium for covering abuse retrospectively. Claims made policies have lower premiums than their claims occurring rivals. So what may seem a good deal at the outset, may soon become more expensive in the long run.

A new insurer will seek to ensure historically that there is evidence of good inspection outcomes, adequate record keeping and robust safeguarding, recruitment and training policies in place. Without the right professional advice, changing insurers creates a risk of retroactive dates being missed, gaps in cover and increased insurance premium costs.


The features of a Claims Occurring abuse wording

A claim is lodged with the insurer on cover at the time the incident occurred even if a claim is brought after the policy is cancelled or moved to another insurer. Leaving one insurer for another is easier, the risk of being uninsured is reduced and organisations will not be subjected to additional premiums for retrospective abuse cover.

Traditionally, abuse cover on a ‘claims occurring’ basis has proved more expensive than a ‘claims made’ basis. However, a well run organisation with a good inspection history, safeguarding policies and training should not have to pay too much extra for an abuse cover which will ensure the long term protection of the organisation.

The correctly arranged ‘claims occurring’ policy provides assurance that the policy will operate for past events even if abuse cover is unobtainable or unaffordable in the future or if the organisation is sold on or no longer trading.

Insurers offer a ‘claims made’ wording for their own benefit rather than the benefit of the organisation. It is recognised in the industry that a claims made wording ultimately limits the future liability of insurers by the sheer fact that once a policy is cancelled, all cover ceases to exist. This can seem unfair particularly as a premium would have been paid for the cover. Ultimately, there is strong argument that a claims occurring wording provides greater stability and assurance over the long-term for organisations exposed to allegations of abuse.

Find out more

If you need assistance to determine how abuse cover works for your organisation, please visit our care sector page or use the Contact Us form to get in touch with us.