The value of an insurance broker for Aged Care providers

What to look for in a risk and insurance adviser.

While there is an abundance of off-the-shelf insurance products available both via brokers and direct from insurers, getting the right level of cover for your specific risk profile for the right premium can be difficult.

The expertise of an industry specialist with a solid understanding of the sector who will ask the right questions to determine the risks relevant to your business is crucial. A good broker will be able to:

  • Customise policy wordings to tailor cover so that the insurance policy will respond appropriately should you experience a loss or liability.
  • Provide claims advocacy and claims management services to ensure your interests are protected.
  • Ensure that insurers’ expectations are managed with regards to responses required to the Government Authorities, Royal Commissions, coronial inquests and other legislative demands
  • Identify uninsured exposures from emerging risks.
  • Review your contracts for indemnity and limit of liability provisions and ensure the contracts you enter into align with your risk and insurance program.
  • Identify value over price
  • Provide risk mitigation strategies and services, for example, advice on work, health and safety risks and return to work policies.

There is a large focus on the aged care industry by government and the wider public community for increased standards of care. The commencement of the Aged Care Quality and Safety Commission’s assessment against the new Aged Care Quality and Safety Standards from 1 July 2019 , the ongoing Royal Commission into Aged Care Quality and Safety, and the Disability Royal Commission (as it applies to young people in residential aged care)  add to the risk profile of the sector.

Concurrently with this there is  significant change occurring in the insurance market.  There are obvious signs that the prolonged period of “soft” market conditions that gave easy access to expanded coverage, and year-on-year premium discounting despite sometimes adverse claims experience, has come to an end.

In particular, insurance for Directors & Officers Liability (D&O), has seen the largest premium increases, particularly for listed insureds. Increases being imposed are a function of a correction of long-term low premiums by the insurance market, and includes the impact on directors and officers of companies who have good claims records and many years of strong risk management. As a result of the recent report by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry  = corporate and clinical governance is now of significant importance, and has highlighted the responsibility of directors to ensure  issues within an organisation are identified, addressed and rectified.

The property insurance market has also hardened. The recent floods in Far North Queensland = follows large scale cyclone and storm damage every year for the last 5 years. The Grenfell Tower fire in London shocked the world, and in Melbourne,  a cigarette butt in a plastic container was enough to ignite a façade of polyethylene-backed metal panels on an apartment building completely destroying the building. The speed and scale of damage as result of the flammability of cladding is a risk now requiring intense review especially of refurbished and newer buildings, previously considered by insurers to be the best of property risks.  With insurers impacted by large-scale catastrophe losses worldwide, insureds are seeing reduced coverage, increased premiums and higher deductibles.  Some policies now do not cover the costs incurred in responding to Royal Commissions.

The role of a risk and insurance adviser who understands the particular concerns of the sectorand is able to balance their advice and support of  the sector against insurers’ needs to maintain a profitable portfolio, is more critical than ever.

If you think insurance is all about the premium then the lowest premium is actually to self insure, unfortunately as with all price based decisions this comes with the highest risk!


Author: Mrs Lyle Steffensen – National Practice Leader, Care Solutions – Marsh Australia

To navigate the challenges you face within the aged care sector, you need a team of specialists who can provide you with the right advice, guidance and support to allow you to focus on delivering your essential services to your community.

To seek support for your risk and insurance program, contact Nicki Tofler – Email:  nicki.tofler@marsh.com – 0405 318 278.  

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