GB Health and Social Care Sector - Risk Management and Insurance - briefing in response to COVID-19 - Willis Towers Watson
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GB Health and
Social Care Sector
Risk Management and Insurance -
briefing in response to COVID-19
This short briefing serves the following purposes; Checklist - operational risk management
and insurance issues
Checklist - to share feedback on operational client issues
Independent health and care service providers are
and frequently asked questions that Willis Towers Watson
contributing to the fight against COVID-19. The whole sector is
colleagues have received during these past few weeks. This
providing vital care services to deal with the global pandemic in
briefing is applicable to both health and social care providers,
hugely challenging and uncertain circumstances.
although we appreciate relevance will vary by organisation.
We group issues under five main headings; People; Assets;
The following list is far from exhaustive and is intended to highlight
Financial; Legal & Regulatory; and, Cyber.
some of the most commonly raised issues and challenges to be
aware of and consider in the context of your own health or social
Points of view - to provide some initial thoughts for
care organisation. You may wish to prioritise accordingly and no
consideration to help during an intensely challenging time when
doubt, there will be many other issues not mentioned below that
your focus is clearly on delivering care. Further support can also
need to be considered. Please do reach out to your Willis Towers
be offered if more information would be helpful.
Watson contact to discuss the relevance of any of these or other
issues.
Looking ahead - to raise awareness and trigger some thinking
as to crisis consequences and potential future challenges that
may be faced. Thinking beyond the here and now, once we
transition back towards a more ‘normal’ situation.
GB Health and Social Care Sector 1 willistowerswatson.com
Risk Management and Insurance - briefing in response to COVID-19
April 2020
People
Key workers and duty of care – there is likely to be an It may be that once more COVID-19 testing is available that
immediate and ongoing employee exposure to COVID-19. the shortage of workers worsens. An example to date has
You have a duty of care to your employees from health and been the furloughed airline staff working out of the Nightingale
safety perspective. Ensure your policies and decision making hospital.1 You may want to think further about alternative
regarding the provision of Personal Protective Equipment (PPE) workers. Consider challenges if you need to circumvent
and many new working practices are clear. There has already normal processes, such as DBS checks, training and the usual
been much media attention around PPE supply, distribution onboarding processes. Regulators have said that they will be
and the prioritisation of resources based on a care setting and understanding of such best interest decision making but checks
clearly significant concerns are warranted. It is recommended should be carried out as normal wherever possible.2
the recorded narrative and context is properly crafted and
Identification of key workers – there have been reported
accompanied by statements which portray best interest examples where care workers have not been acknowledged
decision making. as key workers in supermarkets and pharmacies. We suggest
Employees working from home – non key workers have been employers provide written proof of key worker status to avoid
required to work from home and again, the employer has a such unfortunate difficulties.
continued duty of care to employees to ensure a safe working
Two metre distancing rules – there is a huge impact on certain
environment at home. Consider clarity of working practice, roles, such as delivery services where two-person delivery or
provision of IT and help-desk support, and awareness around installation is required, or carers daily provision of care to those
ergonomics. Willis Towers Watson has produced separate less mobile. You can only do your best in what is practically
specific guidance on home working which can be viewed here. possible, so again record policy and decision making and revisit
Furloughing employees – caution is advised if you are looking both as circumstances change.
to furlough administration staff if the alternative is for clinicians to
General employee wellbeing – the relationship between
have less support as this could have a wider impact – see above employee and employer may come under strain, if not currently,
comments regarding record keeping. Again, ensure the record- then perhaps retrospectively. Look at what support you
keeping of the narrative around decisions to furlough employees currently provide to employees, ensuring the frequency and
should be properly crafted to bring context, and accompanied style of employee engagement has been adapted. Concern has
by statements which portray concepts such as reluctance, last been expressed for employees in many scenarios, examples
resort and organisational survival. include; remote working; need for isolation; staffing levels being
Volunteer support from furloughed employees – given the under strain; stress; burnout; general feeling of fear and anxiety;
current and ongoing shortages of care workers, alternative dealing with grief; and many more.
work forces including volunteers typically presents opportunity.
1
https://www.bbc.co.uk/news/uk-england-london-52085701
2
https://www.cqc.org.uk/guidance-providers/all-services/covid-19-interim-guidance-dbs-other-recruitment-checks
GB Health and Social Care Sector 2 willistowerswatson.com
Risk Management and Insurance - briefing in response to COVID-19
April 2020
Assets
Notifying insurers of changes in organisational business
Owner – controlled construction insurance policies – has
model – please remember your duty to disclose material facts you mothballed any of your refurbishments or new build sites?
to your commercial insurers. Obvious examples of significant If so, please take all reasonable measures to secure the relevant
notifiable changes may include; changes in the patient mix and sites and advise insurers of the closure and measures taken.
provision of NHS care; closure of charity’s retail outlets; and,
Fire risk management associated with oxygen supplies –
significant changes to domiciliary care service protocols. The there is a realisation that with oxygen supplies being prioritised
same principle will also apply once we transition back to work. in ICUs, the importance of risk management is even greater.3
Engineering inspection services – surveyors have been With any significant change comes a new risk profile so consider
deemed key workers and we have received confirmation that some form of risk assessment.
most insurers will continue to carry out some engineering
Marine [transit] insurance – there are likely to be marine
inspections, with inspections companies prioritising health and [transit] considerations related to medical equipment or product
care providers given their criticality. We recommend you confirm being stored on route for more than incidental storage. We can
with your advisor or insurer. also expect potential dispute if there are medicine shortages.
Unoccupied premises – there is a need to check property
Motor fleet – MOTs have been extended six months4 , but
insurance policies for an “Unoccupied Premises” clause as it vehicles must remain in roadworthy condition, and in most
is common for insurers to apply conditions for premises that cases insurance coverage has been extended to include use
will be closed for long periods. These clauses can include a for NHS volunteering. Again, we recommend speaking with an
requirement to turn off all sources of power, fuel and water at the advisor or insurer to check your policies. In addition, there is an
mains; regular internal and external inspections of the building; increased awareness and concern around potential increases
and to secure letter boxes. Your policies should be reviewed in vandalism and theft from parked vehicles. Consider if your
to ensure all the conditions are met. Also, there is likely to be security arrangements are adequate and ensure driver advice
restrictions in coverage like malicious damage and escape of and support is provided.
water. While most insurers are removing their unoccupancy
conditions, some will apply after 30 or 60 days of unoccupancy.
Again, best to check with your advisor or insurer.
3
https://www.hse.gov.uk/pubns/indg459.pdf
4
https://www.gov.uk/government/news/vehicle-owners-to-be-granted-mot-exemption-in-battle-against-coronavirus
GB Health and Social Care Sector 3 willistowerswatson.com
Risk Management and Insurance - briefing in response to COVID-19
April 2020
Financial Legal & Regulatory
Service funding for patients recovered from COVID-19 –
Provision of indemnity – there has been a challenge to
social care providers may be expected to care for acute care bring clarity to NHS provision of indemnity protection where
patients leaving hospital for a similar weekly cost. existing indemnity or insurance may be absent. It is a complex
Business continuity plans and building organisational consideration which will likely lead to dispute in the future. It is
resilience – it is likely that plans have now been reviewed and also important to note the variation between NHSE, Scotland,
you have captured lessons learned. Something perhaps to also Wales and NI. We recommend thorough communication in both
consider again post crisis given the likely governance focus and directions to NHS and to current insurance providers to check
regulatory drive to do so. understanding via your broker or advisor.
Call for a stabilisation fund by charities – given those most
Regulatory flexibility – the professional regulators and the four
in need in society right now are the most vulnerable, it was Chief Medical Officers6 have set out guidance to reassure those
somewhat reassuring to hear the UK government announce on working for the NHS that where they need to work in different
9 April £750m to support the charitable sector.5 These amazing ways, that they should be supported to do so. The regulators
organisations need support as priority as they are key part of the will take extreme circumstances into account and that the
broader solution. usual regulatory frameworks and the need to act in line with the
Insurance cost containment – there may need to be significant principles of good practice set out by the regulators will apply.
changes to rateable (insurance premium) values such as
Record keeping – organisations need to be able to identify,
revenues, wage-roll, motor vehicle usage or other. There is manage and potentially defend future compensatory losses
potential for insurers to be flexible in some circumstances (including retained losses and insurance claims) which can be
even if a policy was written as non-adjustable. Please speak to subrogated to third party as a result of COVID-19. This is relevant
your advisor or insurer for further clarification. in many care settings, particularly for hospital providers as per
Cashflow – if cashflow may be a challenge, consider paying NHS contractual agreements.
annual premiums by instalments. Please speak to your advisor
Training and employee support – a temporary suspension
or insurer for further details. Please note, providers like Premium or reduction of induction, training, and monitoring programs
Credit need supporting information about how the business could result in future regulatory investigation. Health & Safety
is affected by COVID-19 and what measures are in place to Executive or CQC or others will likely expect a resumption
mitigate financial pressures – expect a request for financial of standards once the crisis is over. Separately, capacity
information such as latest management accounts. constraints may necessitate a more limited induction of new
Reduced fundraising activity – there is a huge impact in terms employees or training of well-intended volunteers.
of loss of income. For example, the delay or postponement of
Sourcing of goods from manufacturers – continue to carry out
events/activity – this is a major issue in charity sector. due diligence checks and ensure that any products purchased
Trade Credit – there is potential that trade credit insurance from suppliers conform to Government or WHO guidelines. For
could cover key suppliers. example, manufacturers have diversified their production line to
now produce PPE and sanitisers in short time scales and for the
first time.7
Practical office type considerations include post diversions
– in the case of complete office closures post may need to be
diverted to the homes of authorised employees, particularly
for charities where post could include donations. Consider the
implications for banking and whether your insurance extends to
include any potential losses.
5
https://www.bbc.co.uk/news/business-52221402
6
https://www.aomrc.org.uk/wp-content/uploads/2020/03/0320_letter_supporting_doctors_in_COVID-19.pdf
7
https://www.bbc.com/worklife/article/20200413-how-factories-change-production-to-quickly-fight-coronavirus
GB Health and Social Care Sector 4 willistowerswatson.com
Risk Management and Insurance - briefing in response to COVID-19
April 2020
Cyber Security
New systems and applications – every organisation will be
Increased phishing activity – The National Cyber Security
more reliant on IT than ever before. Reliance on mobile apps and Centre has already highlighted how criminal organisations
homeworking has likely increased your exposure to network are targeting businesses with coronavirus themed e-mails.8
breaches and personal data security. Understand which new Ensure that your organisation takes regular backups and can
systems and applications are being used and assess how this defend against ransomware attacks. You may want to consider
impacts the overall cyber risk position within the business. increasing the number of times when you take backups, and plan
Personal email addresses – It may be necessary to for a worst-case scenario of your network being taken offline
periodically remind staff to only use approved IT systems when (think pen and paper).
handling personal data and not to send it to their personal e-mail
System updates – continue to patch and update systems,
addresses. Whilst this may allow them to do their job, it does ensuring your business is secure online remains key to
increase the risk of it being compromised. minimising your cyber risks.
Rogue websites and scams – continue to monitor social media
and websites which may be set up to take advantage of donors
supporting their charities and fraudulently diverting funds.
Future crisis consequences and challenges Public perception – we expect there will be a greater appreciation
of the NHS and social care workers and indeed other essential
Having highlighted some of the issues that our clients have
workers in society. But will there be a shift towards parity between
faced and have reached out to our Willis Towers Watson teams
NHS and care workers in regard to funding, skills and training, and
for support, we now seek to raise awareness and trigger some
general recognition? We are still waiting to see how the debate
thinking as to other crisis consequences and potential future
‘public health versus the need to get the economy back on track’
challenges yet to be faced. Thinking beyond the here and now,
will develop.
once we transition back towards a more ‘normal’ situation.
Insurance claims – there is expected to be a high volume and
Unintended consequences – recent Public Health England
variation in Employers Liability claims, particularly associated
(PHE) figures show Emergency Department (ED) attendance has
with employees contracting COVID-19 and onward transmission
halved in the 3 weeks to 29 March 2020.9 There is concern that
to family members. Expected claims will be associated with
an unprecedented shift in demand has been created that is not in
employees feeling aggrieved for how they have been treated by
the interests of public health if symptoms for other conditions are
their employer and ‘necessary’ working practices. Also, given
not being acted upon given an overwhelming focus on COVID-19.
the need for enforced isolation in certain care settings, there is a
Meeting this future secondary demand will be necessary. The
potential for human rights claims for not following Code of Practice
transition beyond the peak will clearly be a significant ongoing
to the Mental Health Act 1983.10 Many other claims scenarios
challenge given inevitable ‘waves’ of rebound outbreaks in certain
are unfortunately likely but please do reach out to your broker or
regions.
advisor for advice and support. Again, quality record keeping is
likely to be your best defence. Maintain recording of incidents via
Datix or otherwise.
8
https://www.ncsc.gov.uk/news/cyber-experts-step-criminals-exploit-coronavirus
9
https://www.telegraph.co.uk/news/2020/04/07/ae-attendances-plunge-amid-fears-people-serious-conditions-staying
10
https://www.gov.uk/government/publications/code-of-practice-mental-health-act-1983
GB Health and Social Care Sector 5 willistowerswatson.com
Risk Management and Insurance - briefing in response to COVID-19
April 2020
Future use of technology – the shift to telehealth or telemedicine distinction between the NHS and Social Care. In addition, a marked
and virtual care is likely to be maintained. In addition, from an change in the relationship dynamics and role played by private
organisational perspective, understand where employees not sector providers will be an interesting development to witness.
providing face to face health or other care need to be based.
Most feedback from organisations is positive as regards ability to Looking ahead to pandemic risk insurance coverage – the
work from home, or at least having that as an option, perhaps on Association of British Insurers (ABI) has called on the government
part-time or contingency basis. to step in as the ‘insurer of last resort’ and work with the insurance
sector to handle the potential wave of business interruption claims
Crisis Management and preparedness for future pandemics from businesses affected by the coronavirus outbreak. Director
– it is important to recognise what your business has learnt, what General of ABI, Huw Evans, echoed comments by Sir Charles
needs to change and how can you as an organisation be more Bean, a board member of the Office for Budget Responsibility
resilient and better prepared next time. (OBR), who told the Committee last week that the state is always
the ‘insurer of last resort’ in instances of national emergency.
Further integration of health and social care – although not new “We do, however, want to lead a debate with government about
in concept or ambition, perhaps this crisis will serve as a welcome how to protect more businesses and individuals than has been
catalyst for a well overdue review of funding a more cohesive the case with COVID-19 which would require significant state
‘value based’, patient care approach rather than an organisational partnership with the insurance sector if coverage is to increase.”11
11
https://www.abi.org.uk/news/news-articles/2020/03/coronavirus-business-insurance-further-guidance-from-the-abi/
GB Health and Social Care Sector 6 willistowerswatson.comRisk Management and Insurance - briefing in response to COVID-19
April 2020
Important: Make sure your broker and insurers are
advised of any business changes Appreciating that you will clearly be focused on operations
Finally, a quick reminder that as an insurance policy holder you and the provision of care and responding to new and
are under a duty to make disclosure of all material circumstances evolving challenges, it is advisable to summarise the major
and to make that disclosure in a manner that would be reasonably organisational changes or other significant developments
clear and accessible to a prudent insurer. This duty applies that change the risk profile of your organisation. Provide
equally at policy inception, at annual renewal, alterations and either a concise written summary or have a direct
where the insurance contract conditions so stipulate. A factor or conversation with your broker who should be able to
circumstance is “material” if it would influence the judgement of a convey such overall messaging to your insurers. This will go
prudent insurer in deciding whether to underwrite the risk and if so, a long way to avoiding potential dispute later.
at what premium and on what terms.
Special mention regarding Director’s & Officer’s (D&O) /
Management Liability - consideration should be given to
notification to your D&O insurers. In times of crisis, challenges
around liquidity and cash flow are a key trigger for dispute and
potential for future claims. In addition, other management liability
claims may result from various stakeholder perspectives and
situations. By way of example, it has been reported that some
employers are ‘encouraging’ or ‘allowing’ employees to work from
their usual workplace when they are not seen as critical care
workers.12
Contacts
Please contact your Willis Towers Watson servicing team if you wish to receive advice regarding your insurance policies
or for further risk management advice. Alternatively, please visit the Willis Towers Watson COVID-19 website for the latest
information and articles.
Willis Towers Watson are here to support you, your colleagues and service users in these extraordinary times.
Dave Kennedy BSc ACII
Health & Social Care Practice Leader
E: david.kennedy@willistowerswatson.com
T: +44 (0) 7810 850 037
12
https://www.hsj.co.uk/comment/please-stay-home-too-an-open-letter-to-nhs-managers-and-other-admin-staff/7027257.article
GB Health and Social Care Sector 7 willistowerswatson.comRisk Management and Insurance - briefing in response to COVID-19
April 2020
About Willis Towers Watson
Willis Towers Watson (NASDAQ: WLTW) is a leading global advisory, broking and solutions
company that helps clients around the world turn risk into a path for growth. With roots dating
to 1828, Willis Towers Watson has 45,000 employees serving more than 140 countries and
markets. We design and deliver solutions that manage risk, optimise benefits, cultivate talent,
and expand the power of capital to protect and strengthen institutions and individuals. Our
unique perspective allows us to see the critical intersections between talent, assets and
ideas — the dynamic formula that drives business performance. Together, we unlock potential.
Learn more at willistowerswatson.com.
Each applicable policy of insurance must be reviewed to determine the extent, if any, of coverage for COVID-19. Coverage may vary depending on the jurisdiction and circumstances.
For global client programs it is critical to consider all local operations and how policies may or may not include COVID-19 coverage.
The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal and/or other
professional advisors. Some of the information in this publication may be compiled by third party sources we consider to be reliable, however we do not guarantee and are not responsible
for the accuracy of such information. We assume no duty in contract, tort, or otherwise in connection with this publication and expressly disclaim, to the fullest extent permitted by law,
any liability in connection with this publication. Willis Towers Watson offers insurance-related services through its appropriately licensed entities in each jurisdiction in which it operates.
COVID-19 is a rapidly evolving situation and changes are occurring frequently The information given in this publication is believed to be accurate at the date of publication shown at the
top of this document. This information may have subsequently changed or have been superseded, and should not be relied upon to be accurate or suitable after this date.
Willis Towers Watson is a trading name of Willis Limited, Registered number: 181116 England and Wales. Registered address: 51 Lime Street, London EC3M 7DQ. A Lloyd’s Broker.
Authorised and regulated by the Financial Conduct Authority for its general insurance mediation activities only.
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