Insuring your veterinary practice: have you covered all the bases?

Indeed, Nicola Whittaker, corporate communications manager for NFU Mutual, makes the point that, at a time when many businesses are moving out of local towns and villages, a local presence and a traditional face to face service can be important for customers: “For us this means we can respond to requests and instructions quickly and our claims service is fast and efficient,” says Nicola.

Laura Hyde, a partner at business consultancy and insurance specialists PPS GI, is of a similar view and says practices should always buy their cover from an expert veterinary broker that has the experience to ensure the cover they buy is both correct and adequate for their business. “They should never buy online and always consider the service they require,” she says. In her opinion, buying online gives no degree of choice or access to the bespoke covers related to veterinary practices.

This is the reason why Nicola says it’s important to look at the whole package offered by the insurance provider – service, cover and price. “When choosing an insurer it can be tempting to simply select your provider on the basis of cost; however, vets should satisfy themselves the level of cover and service provided will meet their needs should they have to make a claim.” This is where the personal service of a broker will trump the online or direct relationship where, to an extent, the buyer is driving the transaction.

Cover up

Of course, there are a multitude of covers a practice can need, including buildings, contents, business interruption, income protection and keyman, but do you need them all, and to what extent?

This depends on what, as Nicola suggests, keeps you awake at night: “Is it bad debts, employee issues, medical malpractice or the theft or damage of valuable equipment? These are all things you can insure against.”

Practices need to take the time to speak to their insurer about the risks that concern them and the types of activities and risk involved in the business. By doing this they can ensure they have the correct type and level of cover in place. A vet practice may require different levels of cover depending on its specialisms.

Turning to the “physical”, Laura says practices should also carry out an assessment of their equipment, stock and so on, working with the broker to decide on a replacement value for all items: “This can often be carried out by a junior member of staff creating a list of all items, per room and then obtaining a new value for the larger items. Smaller kit, consumables and stock can then be added to this.”

With regards to buildings, practices are often dealing with changes in partners or funding and a bank refinance often involves the requirement for a new valuation. Practices must ensure they request a rebuild valuation to be calculated at the same time, which can then be taken into account for insurance purposes.

While some insurances, such as motor insurance and employer’s liability insurance, are a legal requirement, some choose not to take out other types of insurance in an attempt to save money. Nicola suggests any short-term financial gain could turn out to be a false economy in the long term should the business suffer a major loss.

When selecting an insurer, vets should consider whether the quote being provided is specific to their business. “Does it have cover for contents and stock away from the surgery (important for vets dealing with farm animals) and does it have liability cover for when animals are left in the vet’s custody or control?” says Nicola. Practices should ask these sorts of questions.

Critical cover

As anyone will tell you, it’s important to both have the right level of cover and disclose all the facts to the insurer. Why? Because the information provided to an insurer is used to calculate the risk posed by a particular business and to set the correct level of premium for that business. Should you not have the right level of cover, when a claim occurs insurers may reduce the claim payment in proportion to the amount of underinsurance. This can obviously have serious ramifications to the practice.

For Laura, a bigger problem is, should practices not disclose all relevant facts, they are in danger of having cover terminated from inception or claims declined. Nicola adds, in some cases, insurers can recover payments that have already been paid or refuse any other benefit under the insurance policy. So being economical with the truth is not a good idea.

Lower the premiums or move on

Insurance isn’t cheap, but Laura makes the point that good claims management and risk control can lower premiums: “Physical changes with closed circuit television (CCTV) and alarms will make a difference, and changing the attitude of staff to take more care can reduce claim instances.”

Interestingly, Laura says premiums do not always reflect the risks being insured and certain providers offer policies at a price that really cannot be sustained. There can often be dual pricing, with companies buying cheaper policies at inception and then increasing the renewal cost so the client is simply back to square one. Practices should always refer back to their existing broker to see if any new deal being offered is correct.

Rather like motor insurance, some providers – NFU Mutual being one – operate a range of automatic discounts based on whether the business uses the services of a risk management company, has monitored CCTV, uses security guards (unlikely for practices) or is located within an enclosed development (again, unlikely for a practice).

Previous claims experience will always be considered and reflected in the premium, as will the number of years a business has been established. It’s obviously not sensible to use an insurance policy to claim for smaller incidents.

Naturally, practices, like anyone else, will vote with their chequebook if the price isn’t right. However, as Laura suggests, practices should allow a reasonable time to review the renewal: “At PPS GI we generally send our clients their policies 18 days prior to the renewal date, so they have time to decide if cover requires amendment.”

There will be a point when it’s worth changing insurer and Nicola says this can usually be organised quite quickly. However, she points out that, in rushing, practices run the risk of incorrectly insuring the business – “something that would not become apparent until you’ve made a claim”.

The advice is, if you are thinking of changing your insurer, spend time in advance reviewing your current cover and premium, identifying any changes in your business activities and talking to other business owners about their recommendations. Ask them how easy the insurer is to deal with, whether they charge for making changes to policy details and how they deal with claims.

Making a claim

“The true test of an insurance policy comes when you have to make a claim,” says Nicola. It follows that should an incident occur early, notification is a must. This way, the insurer can be involved from the start and decide if a loss adjuster is required or if an approved repairer could be used.

But, as with anything in life, it always helps to be prepared and you should always have the following to hand when you contact your insurer:

• your policy number;

• your name and address;

• details of the incident giving rise to the claim – including date;

• circumstances and, if possible, an estimate of the cost; and

• your contact number.

Laura advises, in the case of liability claims, negligence should never be admitted. “But it is a good idea to obtain written statements from all persons concerned at the time of the incident, even if a claim has not been intimated, so, should one be received, all the facts have been taken down while clear in everyone’s minds.” Photographs are always useful in the case of a claim and some insurers are now making this a requirement of the claims process.

Nicola also recommends in the event of an accident or criminal act, such as theft or malicious damage, you should also report the incident to the police and obtain an incident number.

Whatever you do; whoever you buy from, you should read your policy’s full terms and conditions. Nicola says they should be clear and easy to understand. “If after reading your policy in full you think the product you’ve purchased may not be the right one for you, or if you have any questions, contact your insurer straight away.”

The only time your surgery insurance is of benefit to you is in the event of a claim, so do you want to have a call centre or a dedicated point of contact offer you the support and sympathy you should expect?

You pay the money and take your chances.