Understanding Abuse Cover in Insurance Policies: What You Need to Know

Introduction

A recent enquiry from a care business owner highlighted a critical question: "Does our care home insurance policy cover abuse?" This enquiry arose after another insurance broker incorrectly informed them that it did not. This scenario underscores a common misunderstanding about abuse cover in insurance policies. This article aims to clarify what abuse cover entails and how it is managed in insurance policies like ours.

Whether the other broker’s advice was from a genuine lack of understanding or an underhand sales tactic is less important than explaining clearly the idiosyncrasies of abuse cover in care policies.

Purpose of This Article

This article is designed to help care providers understand their potential exposure when choosing insurance policies, particularly regarding abuse cover.

The Misconception

The confusion experienced by the care business owner was due to a misunderstanding of how abuse cover is addressed in insurance policies specific to the care sector. The other broker's incorrect advice underscores the importance of comprehending the nuances of insurance cover in this field.

What is Abuse Cover?

Abuse cover protects against defence costs and claims related to physical, verbal, or sexual abuse. This cover is essential as it includes protection against genuine claims and defence against false allegations, which can incur significant legal costs. It's crucial to ensure that your policy provides adequate protection for your business.

Two Types of Abuse Cover

Claims Occurring: The insurer covers claims for incidents that occurred during the policy year.
Claims Made: The insurer covers claims only if they are made during the policy year. Typically, these policies do not cover claims notified after the policy has expired.

Which is Better?

Both types of cover have their merits, but "claims occurring" offers more comprehensive protection since you don't have to worry about allegations arising after the policy has expired. Abuse claims often surface long after the event, so "claims made" might not provide the peace of mind needed.

Variations in Terms and Levels of Cover

Sub-Limits: Some policies impose sub-limits on abuse cover within the Public Liability section. For example, you might have £5m of Public Liability cover, but only £2m for abuse claims.
Silent on Abuse: Some policies state they cover abuse without further definition, offering the best protection.
Defined Abuse Wordings: Some policies define abuse and may exclude cover if the abuse is against your safeguarding and internal policies. This can be problematic since abuse is never tolerated, raising questions about cover in case of a claim.

What is Best?

Ideally, every insurer would offer silent abuse cover on a "claims occurring" basis. However, this is not always possible due to other insurance requirements like material damage, business interruption, and liability. We strive to work with insurers that offer comprehensive abuse cover, but when this isn't feasible, we will explain the limitations clearly. We will also help you adjust your risk management and reporting procedures to enhance your protection.

Conclusion

Understanding abuse cover in insurance policies is vital for both clients and account handlers. Our policies' lack of a specific definition for abuse allows for broader cover and equitable treatment of all Public Liability claims. This approach helps avoid restrictive definitions and ensures comprehensive protection for our clients. If you have any questions about your cover or need clarification, please contact me at 01273 424904. We're here to help ensure you have the protection you need when you need it.