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Locum Insurance - what you might not want to know but should

Date posted: 24 September, 2010

The weekly rate for hiring a locum GP has been spiralling and in certain parts of the UK it has exceeded the £2K per week barrier. Some ten years ago, £650 per week would have been adequate. Investing in the right type of locum insurance cover has also become a minefield, with more new schemes being introduced.

It is when claims are made that you find out just how good your cover is. When it comes to the crunch, you want to be sure that the claim will be paid – this is what you pay premiums for. Don’t be fooled when you see or hear that an advisor or insurer ‘has the best/most comprehensive/most flexible cover’ or ‘will save you money’. I know of a practice that changed its advisor/insurer and saved money, but was not told was that there was a pre-existing condition exclusion operating for all the insured persons for a 12-month period. The practice in question has another 12 months before this exclusion is lifted. This is a ticking time bomb - make sure that you avoid a similar situation.

GP practices looking into locum insurance should ask how long they have to make a valid claim from the time that an illness/condition starts. The most desirable answer is: ‘You can claim as many times as you want for the same condition up to the maximum benefit period, normally 52 weeks’. If there is a time limitation on how long you have to claim for a condition, such as within 12 months of the condition manifesting itself, you know that recurring conditions will not be fully covered.

A classic example can be found in the case of a GP suffering from lower back pain that started on January 1, 2005 and resulted in him not being able to work. A claim was made as the GP was off work for six weeks. His practice was paid for a two-week period as there was a four-week deferred period on the policy. Everything seemed to be in order at this point and everybody was happy. On March 1, 2006 the GP was again unable to work due to lower back pain and a claim was submitted to the insurer. The insurer refused to pay the second claim. Why? For the claim to be paid it must relate to a date within 12 months from the time a condition first manifests itself – in this case, January 1, 2005. The implication of the above example would cost a practice without the correct cover alot of money and would probably leave the GP with a ‘lower back exclusion’ if he or she were to try and insure elsewhere. This is another insurance cover pitfall to be avoided.

What to look out for

• Make sure that cover for stress/anxiety/depression is included with no reductionsor restrictions.
• Ask the advisor/insurer what happens to the terms of your policy and premium on the next renewal date if you have just made a claim. The terms should stay the same and the premium should be unaffected by the claim.
• With holidays and sabbaticals being taken all over the world, full worldwide cover for both sickness and accident is essential.
• Make sure that you receive a ‘key facts’document with the quotation that you request. This will tell you the name of the insurer, which is a Financial Services Authority requirement.
• Beware of the salesperson’s patter -check all the facts in writing.
• When deciding on the level of cover that you need, ask yourself this simple question: how much per week/per day is it going to cost to replace the person(s) to be insured? This will tell you the benefit that you require.
• The deferred period of the cover (the time after which a claim can be made) should ‘tie in’ with the practice agreement. An example being if a practice were to cover the first four weeks of illness then the deferred period on the insurance cover should be four weeks.
• The payment period of the benefit  should also ‘tie in’ with the practice agreement. Usually this is for a maximum of 52 weeks, less whatever deferred period has been chosen.
  

Author: Simon Downing (Policy Director Medical Insurance Consultants)
Publication: Practice Management p26 - July/August 2007