Understanding Insurance During COVID-19

By Shannon Kilgariff / 23 Apr 2020

Aesthetic insurance providers answer the most frequently asked questions throughout the COVID-19 pandemic

Aesthetics is aware of the huge impact COVID-19 has on aesthetic businesses, many of which are small, single enterprises. Understandably, circulating social media at present is a range of questions and concerns that business owners and practitioners have in relation to their insurance. Aesthetics has put together a list of frequently asked questions and answers from some industry specific insurers to help.

It’s important to note that insurance companies cannot provide definitive advice and guidance to all policyholders as every practitioner and business has unique circumstances, but they can comment on common issues.

Should I cancel my insurance policy if myself or my business can’t operate because of COVID-19?

According to insurance providers, it’s important that practitioners maintain their medical malpractice policy while they are not practising.

Nicola Bowtell, account executive at Lonsdale Insurance Brokers explains that this is because medical malpractice policies are written on a ‘claims made’ basis, which means you must have active cover at the time any claim is first made against you. 

Director of Enhance Insurance, Martin Swann, adds that this is opposed to other insurances you may have (property, equipment etc.), which are written on a ‘loss occurring’ basis.

Chief executive officer of Hamilton Fraser, Eddie Hooker, says, “If a practitioner chooses to cancel their medical malpractice policy mid-term, in the event of a claim arising from any previous treatment they will not be able to submit this under the previous policy. Therefore, it is important that practitioners have active insurance in place to cover pre-existing work even if they are not trading due to COVID-19.”

Swann adds that this is especially important in the event of a patient complication or complaint, a solicitor’s letter for a previous patient or a fitness to practice issue. “Patients may still be in contact with you during this lockdown period in regards to any previous treatments you have provided. In order for you to be covered to provide any advice in regards to these previous treatments the policy needs to remain in force,” he advises, adding, “If we proceed with your instructions to cancel/lapse your policy you will not only have no cover for any advice given, but if an issue arises from one of the previous treatments there will be no cover in force and the policy will not respond. This will leave you with no access to advice in dealing with the issue and no protection for the costs incurred in doing so and any claim that could subsequently follow.”

Bowtell notes that some insurers are considering offering a period of ‘hibernation’ whereby the policy provides ‘run-off’ cover for the period that you are unable to provide services. “This means that while you have stopped performing treatments you are still protected for any claims that may be brought from treatments prior to you ceasing work. It’s always best to check if this is the case with your insurer,” she advises.

From a business owner’s perspective, Hooker explains that at a time when a business is unable to operate as usual due to the impacts of COVID-19, it’s important that they remain covered for standard risks. “These could include vandalism of the property, theft of stock or equipment, or even loss of information or damage to IT systems and networks, which could be more likely to occur when the clinic is unoccupied,” he says. 

What happens if my premises are left unoccupied?

Insurance providers generally need to be notified if you are leaving your business unoccupied for more than 30 consecutive days. Given the exceptional circumstances of COVID-19, many insurers are extending this period to 90 days but businesses should contact their provider to check.

According to Hooker, you should take precautionary measures to prevent anything happening. “It is recommended to shut off the water supply to the premises, and ensure that any measures to prevent thefts are taken, such as locking away equipment and setting intruder alarms,” he explains.

Bowtell adds to check your policy to see if there are any un-occupancy exclusions, and if you are ever in doubt, contact your insurance broker who will be able to advise you on your individual policy.

I have taken stock or equipment home, will I be covered?  

According to Swann, many insurers are providing cover for you to take your stock home. However, he notes that you will need to contact your broker and advise them to ensure your policy is amended to reflect this.

I am just doing video consultations, do I need insurance?

Practitioners are now utilising technology more than ever before, especially through video consultations, which means that you must be cyber safe, highlight insurance providers.

Swann says, “In respect of the medical malpractice aspect, ensure your insurers are aware consultations are being carried out in this manner, including any other changes to your activities.”

Swann adds that the number of businesses having such a digital focus has increased the risk of cyber-attacks. He explains, “This increased risk to cybercrime means that those business without the protection of cyber insurance may be left with the cost burden of dealing with and notifying a breach, in times when their balance sheet may not be able to support the costs incurred.” 

Hooker adds that cyber insurance is designed to support and protect your organisation if it experiences a data breach or malicious cyber hack that affects your systems or ability to operate. He says, “Cyber insurance means that in the event of a cyber-attack or, for example a ransomware attack that forces you to cease or restrict normal business operations, any income lost as a result of such an interruption would be reimbursed through your policy.”

Swann adds that the important thing when it comes to cybersecurity is to identify what your risks are and how you can reduce these risks. “Many insurers offer free added-value products like cybersecurity audits, cyber training and risk mitigation advice as part of their cyber covers too. To help navigate the cover you need to protect you from these risks and exposures, you need to seek advice from a broker or advisor who specialises in cyber,” he explains.

On another note, Bowtell adds that any advice you provide during your video consultations would need to be covered by a professional indemnity policy so you should get in touch with your insurance provider to ensure you are covered. 

Will I be able to claim my business interruption insurance for

Bowtell says that this is an ongoing discussion with insurers as there are various interpretations of what cover is provided depending on the policy wording used.

Swann states, “This is policy-wording dependent. Many insurers unfortunately do not cover closure relating to the spread of disease, which is the stance of many insurers following the Ebola and SARS outbreaks.”

According to The Association of British Insurers, the voice of the UK’s insurance and long-term savings industry with more than 200 member companies, “No insurance market provides widespread insurance coverage for pandemics, and the UK is no exception”.1 It goes on to say, “For this type of cover to be available and affordable, it would require a very significant subsidy from the government given the scale of business disruption we have seen with the COVID-19 pandemic. Instead, standard commercial insurance policies – the type the vast majority of businesses purchase – provide cover against a wide range of day to day risks including damage caused by fire, flood, theft and accidents involving employees.” The bottom line is, if you are unsure what your policy covers you for then check with your insurer or insurance broker.

Where can I go to for further information?

The Association of British Insurers has published information to help insurance customers where you can find answers to more commonly asked questions.1 A business may also be eligible to benefit from the UK Government’s new financial measures for support.2 You can find out whether your business is eligible, and how you may be able to benefit.

If you have a policy through Hamilton Fraser Cosmetic Insurance, they have released a statement to their policyholders relating to COVID-19 which can be viewed here

I need insurance for my aesthetic business, what providers should I get in touch with?

There are a number of industry-specific insurers for the aesthetics field. Some of these are listed below:

Note: Always contact your insurance provider for definitive advice and guidance on your individual policy.

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