What business owners need to know about locum insurance

The scenario

Gurpreet, AOP member

“As a practice owner my business is vulnerable to the impact of the costs associated with staff sickness. Looking at finances from last year, during the winter flu and cold season, the business was negatively impacted by unexpected locum costs. I want to protect the business going forward. What do I need to consider when looking into locum insurance?”

The advice

Emily Tyler, commercial business development manager at AOP insurance affinity partner, Lloyd & Whyte

Locum insurance is there to protect the business should a key member of staff, clinical or non-clinical, be unable to work, for extended periods of time. This financial assistance, in the form of a weekly benefit paid to the business, can be used to offset additional costs incurred in replacing the absent member, such as employing a locum or paying overtime.

Absences within your business can be caused by a number of reasons. Locum insurance will include cover for:

• Sickness
• Accident
• Maternity, paternity and adoption leave
• Family emergency
• Suspension and inquiries
• Jury service
• Bereavement and compassionate leave.

How does locum insurance differ from income protection?

It’s easy to get locum insurance and income protection confused. Both policies provide financial support during illness or injury, but there’s one key difference between the two.

Locum insurance will financially protect the business for costs incurred by absences at the practice. In contrast, income protection provides financial support to the individual who is unable to work.

What to look for when considering a locum insurance policy

In considering locum insurance, you will need to look at whether a policy is indemnified or benefit driven.

Some locum insurance policies will be on an indemnified basis, meaning that in order to make a claim you need to provide receipts for external locum staff. Not all businesses will be able to obtain a locum for the full duration of the absence, which could leave you unable to claim through your insurance policy.

Lloyd & Whyte offers a benefit-driven locum insurance policy, which requires no medical examination and pays out a pre-agreed amount to the business, without the need for receipts or proof of spend, which can be a time-consuming process.  

The policy is taken out in the business name on an annually renewable basis. You choose how much cover is needed and when you want payments to commence from. This can vary from one week up to 26 weeks, and is commonly referred to as the excess or deferment period.

You can choose the length of the deferment period and usually, the longer you select, the lower the premiums will be.

Typically, a policy will have a 52-week benefit period, which is the time frame in which payments would be made to your business following an absence.

Choosing your provider

As an AOP member, you have access to financial advice, insurance policies and professional know-how from Lloyd & Whyte. Lloyd & Whyte Group are one of only a handful of organisations in the UK to hold both “Chartered Insurance Brokers” and “Chartered Financial Planners” status, which demonstrates their commitment to professionalism, capability, and service.

They have been supporting healthcare practices with their insurance and financial planning, which includes help if you need to make a claim or update your cover, for over 20 years.

For more information call the Lloyd & Whyte team on 01823 250760.

Lloyd & Whyte® Ltd are Corporate Chartered Insurance Brokers - FRN 306077 – Registered in England No. 03686765. Registered office: Affinity House, Bindon Road, Taunton, Somerset TA2 6AA

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