The 6 types of Insurance every NDIS Provider needs (or needs to consider).
The National Disability Insurance Scheme has been an incredible asset to Australians in the few years we’ve had access to its services.
Not only has it introduced a quality of life, support and vital services to thousands of people, families and careers around the country, it has created employment and business opportunities galore.
Caring for the most vulnerable members of our society is an important and rewarding occupation to undertake. Accordingly, the industry is heavily regulated, with onerous obligations and legislative requirements for registered providers to abide by, ensuring the protection of recipients is a priority.
Anyone who has gone through or is about to go through the registration process, understands the need for carefully considered and embedded risk management, thoroughly audited policies and procedures, and operational and compliance best practice.
But what are the key exposures you need to protect against in your business, and what insurances should you be taking or considering as an NDIS provider?
This one is the first of two non-negotiable covers you need to take. You won’t make it past the audit and registration without it. So what does it cover you for?
Public Liability is a negligence based, third party loss cover. This means it is covering third parties for injury or damage to their property, as a result of negligence in your business. The easiest claim example to illustrate how this works, is to look at a provider who cleans their clients homes;
Jenny is a sole trader, and a registered NDIS provider who provides house cleaning services. Jenny is always extremely careful about the equipment she brings into her clients homes, and her clients safety is her top priority. Jenny is in a rush one morning and misses a small pool of water under her mop bucket on the laundry tiles. Unfortunately after she has left the job, her client slips on the water and suffers an injury. Her client's phone was also damaged in the fall. Jenny’s public liability insurer accepts liability as Jenny was found negligent in not cleaning up the spill or ensuring the safety of her client, and the policy pays for Jenny’s clients hospital and ambulance costs, the clients out of pocket pharmacy costs and for a replacement phone.
It’s important to think about what you’re doing each day and how you are interacting with your clients, their families and the general public with your business activities.
Your public liability policy will safeguard your business for negligence based claims in the event you, your employees or volunteers cause injury or property damage to a third party due to your day to day activities, like in the above example.
Professional Indemnity or Medical Malpractice
This covers your business (or you, if you are a sole trader) for financial loss from claims brought against you to do with professional misconduct, breaches of duty of care, errors and omissions in advice, and medical malpractice.
The cost of not having this cover could cripple your business, or if you are a sole trader, even put your personal assets at risk if a claim was brought against you and you had to defend yourself in court or pay damages and additional costs.
Whether you need a Professional Indemnity cover or a Medical Malpractice cover, will depend on what services you are providing your clients. If you are NOT providing any medical services or advice, administering medications or treatments, or any other allied health service, you are likely to only need a Professional Indemnity cover to protect against breaches of duty of care, errors and omissions in advice and so forth.
If you are providing medical services and employ medically trained and qualified staff, you need a Medical Malpractice cover which will protect against alleged malpractice claims as a result of medical treatment or advice.
If you are employing a registered health practitioner, they will have their own professional insurances in place, however you as the employing organisation have a vicarious exposure and must have a malpractice cover in place also.
It is vitally important to understand the different Professional Indemnity exposures your business faces, and to ensure you have the right type of indemnity insurance in place for your service provision and activities.
While not a required insurance for registration in most cases, Management Liability is a crucial cover that all provider organisations should be carefully considering.
This type of insurance is a broader version of the traditional Directors & Officers insurance, and in addition to protecting the directors, officers and senior management against claims for breach of professional duty, it provides cover for employment practices, fines and penalties and company liability (amongst other additional benefits).
Some insurers offering packaged policies for NDIS providers offer a scaled down version of a Management Liability policy, with sections for Directors & Officers and Employment Practices Liability as standard, but don’t offer additional coverages found under a standalone Management Liability policy.
You should also strongly consider whether you want to insure against claims of molestation or abuse as this is a standard exclusion of public and professional indemnity insurances and must be negotiated and agreed with your insurer as an additional cover.
Volunteers Personal Accident
Does your organisation make use of volunteers?
Most states and territories will consider volunteers as employees for the purposes of workers compensation in the event your volunteers are injured, however there are exceptions to this rule so you need to be aware of how your state or territory deems them.
This means it is important to consider whether you offer additional insurance in the form of personal accident insurance for volunteers if injured in the course of volunteering for you. A standard policy will provide weekly benefits and additional medical costs that may not be covered by workers compensation or move beyond any benefit applicable.
Volunteers are often the lifeblood of service provider organisations. It’s important to recognise the contribution and sacrifice they make, by offering them peace of mind that if they are injured, there is financial protection available.
Cyber Liability & Protection
Any business that transacts online these days - and let’s face it, that’s almost everyone - should be considering cyber liability insurance.
There were over 58,000 reports of cybercrime in 2020, with one report being made almost every 10 minutes according to the Australian Cyber Security Centre (ACSC). With the majority of incidents reported being fraud, theft and misuse of personal information, and ransomware attacks, the potential impact on your business could be significant.
Whether you are providing telehealth services, offering a client portal on your website, or just basic website, data storage and email use - every NDIS provider will have access to and be storing clients personal information, including financial accounts and payment details as well as sensitive health information and reports.
Considering the mandatory breach reporting obligations for businesses turning over $3mil with the added operational and reputational implications attached, a cyber liability insurance should be in your suite of essential business insurances.
Property & Motor Insurances
Depending on your business structure and assets, you might need cover for business property or equipment.
Are you a sole-trader who takes along a laptop or tablet to client meetings? Do you transport your clients in a business or private vehicle? Do you have a stock of cleaning products, or medical equipment and PPE?
There are plenty of examples why covering your business property and equipment makes perfect sense. If your residential facility was broken into and equipment stolen, you would need to replace it. If you dropped your tablet at your clients home, you would need to fix it or buy a new one. If you crashed your car taking a client to the supermarket, you’d need to fix it.
Taking out a policy to cover your business assets is an important consideration. If you are a sole trader using your personal vehicle, you should also check with your motor insurer if they will cover your vehicle for business use and if transporting clients is covered under the policy (you may need to consider a commercial motor policy).
Let’s wrap this up!
In the end, insurance is only one (super important) aspect of your business.
Given the nature of the work your business as an NDIS provider organisation provides, it is critical that you protect not only yourself, your employees and your business, but your clients - those most vulnerable and dependent on their service providers doing the right thing and acting in their best interests.
Investing in your insurance and risk management and fostering a safety and values driven culture is not only in the best interests of your organisation, but in those of your clients also.
This article originally appeared on MeyerInsure Blog and has been published here with permission.
Advisr does not provide advice and does not hold a financial service license (AFSL). All information above has been provided by Laura Meyer.