Despite growing at a rapid pace, the care sector remains badly understood, and thousands of businesses are poorly covered as a result.
Published on 11 February, 2022
Author: Richard Brooks, Broker Development Director
For many, the care sector is commonly associated with residential care for elderly people. In fact, says Richard Brooks, Broker Development Director at Markel UK, the sector is much broader, supporting a vast array of people across society. As a result of this misconception, many care businesses are inadequately covered by their insurer.
“Residential care alone comes in lots of different forms”, says Brooks. “Of course, many establishments are focused on caring for elderly people, but facilities for other vulnerable adults, such as those with challenging mental health, addiction and learning difficulties, often provide care on a residential basis too”. Then there is the growing subsector of domiciliary care: in this area, the number of jobs increased by 22% between 2012 and 2021, and is forecast to grow by a further 29% by 2035.
Beyond that, there are numerous other groups and organisations that brokers tend not to identify as falling within the care sector: from youth groups and women’s refuges, homeless shelters and bail hostels, to counselling, advocacy and fundraising services.
“For brokers reflecting on the communities in which they operate, you’ll see aspects of the care sector in every direction you look”, says Brooks. The problem is that despite having specific needs, many of these clients – in his experience, more that 65% – are being insured under conventional commercial combined policies. This type of policy “will cover the basics for any business,” he says.
You’re going to be covered for fire, theft, basic employer’s liability and public liability, things like that… the roof they operate under and the possessions that they have will be covered. But there are very specific risks, applying to the provision of care services.
“For example, a commercial combined policy’s public liability cover would include liability for causing a bodily injury, but commonly, things like medical malpractice are excluded. That’s a real problem, because often, that’s one of the fundamental services you’re providing as a carer. These policies are also often silent on abuse, so it would be open to interpretation whether an abuse event would be covered.
“At Markel, we explicitly provide medical malpractice cover as an extension of cover under the public liability section of the policy, and we also explicitly provide abuse cover to a certain level of indemnity, but these aren’t standard – that’s why you need a specialist policy.”
Inadequate cover can have consequences for both the client and the broker, says Brooks. “From the client’s perspective, they could be at risk of financial loss if a case is brought against them and they’re not covered. From the broker’s perspective, if the client can demonstrate that they had made it clear this was a loss they were concerned about, and the broker failed to act on that, the broker could be vulnerable to an E&O (errors and omissions) claim”.
At the same time, brokers should see the situation as an opportunity, says Brooks. “There’s a huge opportunity for growth here for brokers who are prepared to invest some time in understanding just how many of these potential clients are out there and how poorly served they are – you can achieve competitive advantage really easily by becoming an expert with just a little bit of extra knowledge”.
Here are some examples of operations you might not have considered part of the care sector:
Formerly known as bail hostels, these facilities provide accommodation for ex-offenders who have been deemed safe to leave prison but require monitoring and supervision to reintegrate into the community.
Provision of talking therapy in a confidential and dependable non-residential setting, covering topics such as bereavement, eating disorders and mental health.
Short-term accommodation for people experiencing homelessness, offering shelter, food, and bathing facilities as well as signposting to services such as rehabilitation and employment.
After school and breakfast clubs:
Wraparound care for children of primary school age that allows parents to balance work and family commitments.
Provision of safe accommodation for women and their children, offering services including counselling, support, advice, advocacy, and children’s activities.
To find out more about the care sector, download our care ebook at care.uk.markel.com/ebook.