Carl Shaw, Director of care sector insurance broker, Gallagher, shares his views on the challenges facing the industry and how providers can protect themselves amid uncertainty.
The care sector in the UK provides wide-ranging support and care to people of all ages and with a diverse range of needs. In recent times, we have seen the sector undergo a multitude of significant shifts and challenges, impacting both providers and recipients of care services. From addressing labour market challenges to navigating regulatory changes, the industry is going through particularly testing times. Gallagher’s recent UK Care Market Report highlights the most pressing concerns facing care providers and how they can best protect themselves amidst uncertainty.
As one of the largest insurance brokers operating in the care industry, we work with thousands of clients in the sector to help them mitigate the risks they face. Our network of professionals work with a wide range of care organisations to provide them with insurance solutions and risk management advice tailored to their individual needs and circumstances. By working closely with clients, we are able to stay on top of current and future challenges in the sector and ensure the right insurance is in place.
The sector is currently facing a critical staff shortage due to low pay, poor working conditions, Brexit, and the impact of the pandemic. This situation makes it increasingly difficult for care providers to recruit and retain staff, as well as placing even greater pressure on existing staff. Care providers are trying various ways to retain and recruit staff, such as active overseas recruitment and implementing bonus schemes.
Adding to this pressure is the Government’s plan to change legislation to provisions for recipients of care services aged 16-years-old and over, set to come into effect in April 2024, with facilities having to be registered with Ofsted and inspected regularly. There are concerns that the new regulations will be excessively burdensome and expensive for some already struggling providers and could lead to a crippling shortage of 16+ provisions. Mental health facilities are also being put under pressure, with a move towards a more independent and community-oriented approach to mental health support.
There is also currently a shortage of availability of child and adolescent mental health services and many children’s homes do not employ therapists or psychologists due to the costs associated with these specialised professionals. During times of mounting pressures and uncertainty in the sector, it has never been more important to ensure that providers are protected against growing risks. Securing appropriate Director’s & Officer’s (D&O) insurance is crucial for mitigating legal complexities and safeguards the interests of care organisations and their leadership by providing legal protection and ensuring compliance with industry regulations. In addition to this, Management Liability insurance can provide coverage for claims made against individual directors or senior management and, or against the limited company for wrongful acts or breaches of company law.
Until recently, cybersecurity has been overlooked, despite being an increasingly crucial part of protection within the sector. Care providers need to retain service users’ records for extended periods, making them potential targets by cyber criminals. However, care providers usually overlook the risks as this data does not hold financial value. In addition, the human error element, such as staff clicking on malicious links, remains the most substantial risk. Multi-factor authentication is becoming pivotal in obtaining cyber coverage as it adds an extra layer of security, reducing the risk of unauthorised access to systems and data. Care providers should prioritise cybersecurity risk mitigation measures to help protect sensitive information and maintain the trust of service users and insurers alike.
The sector is having to adapt to significant change which is why care providers must proactively keep abreast of developments, enhance recruitment and training methods where possible, and secure comprehensive insurance coverage.
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