The changing face of health care and the impact on your SoR insurance

Published: 04 November 2016 Ezine

Author: Warren Town, Director of Industrial Strategy

It must be obvious to many that the NHS is slowly but inexorably moving towards a service based on what we can afford and not what is desired.

Here we have to pause because there is a distinct difference in ethos between the four countries of the UK, with England leading the way towards a mixed service model, with NHS care delivered by private and public economies.

Whilst the bulk of the NHS is still public, there are an increasing numbers of new players who are chasing the fast buck and prosperity, whether they target the ‘worried well’, or see a gap in the market that they think they can fill and make a profit.

But health care is not cheap and we have seen a number of providers doing as much as possible to limit their exposure to overheads and what they regard as excessive cost.

One cost that all health care providers must incur is indemnity insurance to protect themselves against negligence or injury claims. The obvious route to protect the business in the event of a claim is the purchase of insurance, commonly referred to as Malpractice or Professional Indemnity insurance. But, as with any insurance today, cover does not come cheap.

The second problem for a health care provider is that underwriters who are willing to quote for cover are extremely limited and many will insist on onerous conditions and exclusions that may leave the bulk of the risk with the provider.

You will know that as a member of the SoR you have indemnity insurance as a membership benefit. Historically, and in practice, this insurance cover has been regarded as a second line of protection for our members, because the primary cover you have arises from your employment relationship with your employer. 

In the past, provided employers were satisfied that the employee was not deliberately careless, it would pick up the tab if something went wrong and a patient was injured. This is because in these situations employers have a responsibility to protect the well-being of patients. This is referred to as ‘vicarious liability’, where the employer is responsible for you as an employee, for what you do and how you perform in accordance with the terms of your contract.

Hence any liability to a patient that arises as a result of your actions will need to be addressed by the employer and, only if they can show that you had breached the terms of your employment contract, will they be able to pass on liability to you.

When that happens, the SoR policy becomes very important in supporting you in respect of claims from patients. It is also possible for the claimant (the patient) to sue you as an individual as well and this is another situation where the SoR insurance may also protect you.

For the bulk of the SoR’s membership, where they are engaged on the national NHS contract, they can rely upon the NHS to be first in line if claims are made by patients.

The newly emerging and disturbing problem we have seen recently is that independent providers and some private companies are either not buying insurance, or are reducing the extent of their coverage and are instead requiring our members to rely on their SoR cover in the event of patient claims.

This approach is fraught with danger for the employer and the member. Not only is this likely to increase SoR membership fees due to higher insurance premiums, but in certain situations the underwriter for the member’s policy may deny liability due to failings by the employer. Members may be caught between a patient making a claim, an employer refusing to support the employee, and the insurance company. 

Let’s be clear: the SoR and its underwriters will not tolerate companies or independent practitioners trying to evade their responsibilities and to get indemnity insurance on the cheap and at the expense of the bulk of our membership, who will be left to foot the bill because of an increase in their membership fees.

We will be publishing a series of articles that will examine the employment relationship in detail and explain the implications of recent judgements that will impact on the ability of companies to subvert the law.