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Jargon Busting - the pitfalls to avoid in Locum Insurance cover
Date posted: 24 September, 2010

Over the last few years it has become more difficult and time consuming for practice managers to decide how to cover the cost of a locum if a doctor or key member of staff is incapacitated due to sickness or accident. I recently spoke to a practice manager who was told by an insurer/provider that the cover it was offering was identical to the cover that her practice already had. Only when she asked for the policy wording did she discover that it did not account for any pre-existing conditions and there were restrictions as to where the doctor/key employee could become ill (geographical limitations). This article explains the ‘jargon’ used by insurer/providers and highlights the key areas where there are pitfalls sometimes conveniently missed by an insurer/provider and do not become apparent until there is a claim.


Pre-existing condition exclusion
This term is self-explanatory. It means that any previous medical condition will not be covered by insurance. Quite a few providers/insurers operate this to reduce the number of claims that they pay out. To deal with such a clause, when a quotation from the insurer/provider is first obtained, the client should also receive a ‘key facts’ document that outlines the cover available. Clients must look for the section that relates to the general exclusions, as this should tell them the exclusions that the insurer/provider is imposing. If uncertainty still exists, clients should ask for the policy wording and again look for the section that relates to exclusions. They should beware of the classic telesales patter –‘Of course we can provide the same cover that you have and we will also give you a discount
because…’


Within 12 months of the condition starting (recurring conditions)
This policy condition does not sound too bad initially, but if clients are looking to claim for any ongoing conditions, then this is not for them. So long as a claim is made within ‘12 months of the condition manifesting itself’, the claim should be paid. However, there is a sting in the tail. If a further claim is submitted but it falls outside of the ‘12 months of the condition manifesting itself’, it will not be paid up. Clients should look for the section relating to sickness exclusions in the ‘key facts’ document and/or policy wording.

Worldwide cover
People often take it for granted that all insurers/providers offer worldwide cover, but this is often not the case. Clients must make sure that both accidents and sickness are covered. It is quite common for insurers/providers to reduce the geographical limits for sickness cover. It is important to check the section relating to geographical limits in the ‘key facts’ and/or policy wording.


I recently looked at some of the locum insurance policies that are currently available to medical practices and I was amazed at how many included at least one of the above conditions/exclusions. Therefore, when assessing locum insurance, practice managers must read carefully which cover is being offered, ask for the policy wording and see whether it meets the practice requirements. Once all of this has been established, they should then look at the premium.


Author: John Downing (Managing Director of Medical Insurance Consultants).
Publication: Practice Management p36 - January 2008