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5 Insurance Tips for Aged Care Organisations

Business Insurance Aged Care Insurance

Aged Care is a unique sector with multiple challenges including staffing, financial, compliance and insurance protection.

Crucial Insurance and Risk Advisors work alongside a number of Aged Care Organisations to manage their Insurance risk and here are our five top tips for organisations to consider within their insurance program.

1. Refundable Accommodation Bonds.

Did you know that you can insure the loss of interest earned if a claim occurs, and the accommodation bonds are withdrawn?

In addition, cover can also extend to cover the additional costs incurred with re-financing the funds needed for reimbursing accommodation bonds. This is usually on the provision that you are contractually required to do so under a term of agreement.

If your organisation holds Accommodation Bonds, then this policy extension is something to consider to reduce your financial loss.

2. Voluntary Workers Personal Accident

Voluntary Workers play such an important role within the Aged Care Industry and having a comprehensive Voluntary Workers and Personal Accident policy can help attract and retain volunteers.

Volunteers are not covered under a workers compensation policy so if a volunteer sustains an injury, then they are required to cover their own loss of income and non-Medicare expenses.

If you engage volunteers within your organisation, then we would recommend that you consider a Voluntary Workers Personal Accident policy as this will extend to cover their loss of income, medical bills and rehabilitation costs to name a few benefits.

3. Cyber Insurance

Aged Care Organisations collect a significant amount of data and as a result, Cyber Insurance is now a critical part of any insurance program.

If we look at the National Aged Care Mandatory Quality Indicator Program requirements (QI Program) alone then there are multiple records that need to be obtained and stored with care to comply with the program.

The QI Program record requirements include information such as medication management, hospitalisation, and workforce data.

As you can imagine, if an organisation suffers an incident and records such as these are accessed then the financial and reputational consequences can be catastrophic. This means that having a comprehensive cyber policy should be considered as part of your Cyber risk management.

Management Liability Insurance

Management Liability insurance is designed to provide protection to both the business and its directors or officers for claims of wrongful acts in the management of the business.

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Business Insurance

A business insurance pack can provide cover for your business premises and contents, against loss, damage, theft or financial loss from an insured interruption to the business.

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Business Package

Purchase up to six products under one Business Insurance Package.

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A typical Cyber Insurance policy will likely extend to cover the following:

Cyber Liability arising from data breaches which results in an individual or entities right to privacy being compromised.
Notification Costs to those affected.
Cyber Fraud
Cyber Extortion resulting from phishing and ransomware scans.
Cyber Liability arising from data breaches which results in an individual or entities right to privacy being compromised.
Statutory Fines & Penalties for breaching Privacy Act

4. Abuse Liability

In the event of an allegation the reputation damage along with the legal and compensation costs incurred can be catastrophic for an organisation.

Obtaining cover within the insurance market has never been more difficult as many insurers have either reduced the cover available or removed abuse liability entirely from their offering.

Insurers who remain in the market will require you to have a good claims history along with up to date risk management procedures which will include having a regularly reviewed abuse policy.

It can take many years for a victim to make a claim after the alleged abuse has occurred. This is important as abuse cover is commonly insured on a ‘claims made’ basis which means that the policy will only respond to claims made and notified to the insurer during the policy period. If a claim is notified after the expiry of the policy, then the policy will not respond.

Engaging with your broker through this process is recommended so that you can be guided through your past, present and future risks.

5. Payroll

On the 30th of June 2023 the minimum wage award for those paid under the Aged Care Award and Nurses Award increased by 15%. In addition, the minimum wage for employees under the Social, Community, Home Care and Disability Services (SCHADS) Award 2010 also increased by 15%.

If you have not done so already, then it is recommended that you review your payroll sum insured to ensure that the sums insured remain adequate.

Payroll has traditionally been insured for the full payroll costs for the total indemnity period. This option enables the business to continue to pay and retain all staff for the whole indemnity period.

The alternative option is to insure payroll is on a dual wage basis which allows the organisation to insure the payroll for the full amount for a certain period and then the remaining period for a lesser amount.

This option may be beneficial to Aged Care Organisations due to the high use of casual and labour hire staff within the industry. In the event of a significant claim the need for temporary staff would reduce and therefore insuring on a dual wage basis may be a suitable option for you to continue to have cover but at a more cost-effective premium.

Finding and retaining key staff in the current employment market is tough and therefore insuring payroll on the most cost-effective basis is something for all aged care organisations to consider.

Our Approach to Aged Care Insurance

Our team has significant experience in this sector and can work with you to understand your risks in today's changing world.

We design insurance solutions based on a detailed understanding of your risk profile to ensure you are properly protected. We do the hard work for our aged care clients by helping them find suitable policies for their unique situation.

Our experience within the aged care industry also enables us to understand the risk management processes needed to obtain the most favourable insurance outcomes.

Please feel free to contact us at Crucial Insurance and Risk Advisors if you would like to discuss how we can help you.

References

https://www.agedcarequality.gov.au/providers/national-aged-care-mandatory-quality-indicator-program

https://www.health.gov.au/sites/default/files/2023-06/aged-care-worker-wages-guidance-document.pdf

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Crucial Insurance and Risk Advisors, ABN 93 166 630 511, AFSL 451450

This article originally appeared on Crucial Insights and has been published here with permission.