Insurance for self-employed practitioners: Do practitioners working in clinic need their own insurance?

Self-employment is a popular choice for aesthetic practitioners looking for flexibility and the freedom to choose when and where they work. Lots of our customers juggle employment in medical roles in the NHS with their self-employed aesthetics work. And although the number of self-employed people in the UK has fallen in the wake of the pandemic, the loosening of restrictions coupled with an increasing focus on self-care has driven a robust recovery in the aesthetics sector. With this recovery has come the return to work of self-employed practitioners, many of whom had gone back to the NHS to provide support during the pandemic. This is great news for an industry that was particularly hard hit.

But the return to work of practitioners has also prompted the return of a frequently asked question about insurance for the self-employed: do self-employed practitioners need to arrange their own insurance if the clinic where they are performing treatments has covered them on their clinic’s insurance? Here, we’ll answer this question by exploring various real-life scenarios.

Who is responsible for providing insurance cover: The self-employed practitioner, or the clinic?

The team at Hamilton Fraser get a lot of calls from individual practitioners checking whether they need their own cover if the clinic where they are working already has cover. And conversely, they also get calls from clinics asking whether they need to add individual practitioners to their clinic insurance.
The answer is that both are needed. Whether you’re employed by a clinic or self-employed, you will need to arrange your own insurance. And clinics will also need to make sure that they have adequate insurance in place to cover both themselves and any self-employed practitioner who is performing procedures in their clinic.

 

Why do self-employed practitioners and clinics need their own insurance cover?

To explain why both self-employed practitioners and aesthetic clinics need their own, separate insurance cover, we’ll draw on some of the cases we’ve come across at Hamilton Fraser.

 

Why the self-employed practitioner needs their own cover

If a practitioner goes under a clinic policy without taking out their own cover and a claim comes in further down the line, but the practitioner has since fallen out with the clinic or left on bad terms, or the clinic has gone into liquidation, the practitioner won’t be covered.

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Case study 1: The practitioner falls out with the clinic

A self-employed practitioner starts work one or two days a week in a clinic, under the clinic name. The profits are split between the practitioner and the clinic. The clinic offers to add the practitioner to their clinic insurance policy to carry out treatments. The practitioner accepts the offer and then decides to cancel their own policy as they are now insured under the clinic name.

The practitioner happily works at the clinic for 18 months. The clinic manager then has a disagreement with the practitioner, and she leaves on bad terms. A claim then comes in for a treatment that the practitioner carried out. The claim is purely for the treatment technique carried out by the practitioner who has now left, there is no issue with the clinic at all. The claim is sent over to the clinic’s policy, but the clinic has a contingent policy, which means that the claim should be referred to the practitioner’s own indemnity policy.

Contingent insurance, as defined by the International Risk Management Institute, refers to a policy that is contingent on the absence of other insurance. In modern terms, contingent insurance refers to a policy that has an escape-type other insurance provision saying that it does not apply if there is another policy providing coverage.

In this case, the claim was batted back and forth between parties as the practitioner no longer had their own policy. If the practitioner had had their own policy, the claim would have been dealt with in a quick and efficient manner. The clinic policy did evenly assist in this matter, but as there were time delays, the claim costs increased.

Case study 2: The clinic goes into liquidation

In this second case, the scenario was the same as the first in that the practitioner was reliant on clinic cover, but instead of the practitioner leaving, she stayed employed. The clinic went into liquidation, so the practitioner lost their position there. A claim then came in to the liquidators. But there was no insurance policy in place as the premium had not been paid, so the claim was referred back to the practitioner direct. As she had no policy in place, the practitioner was liable to pay for the claim and costs involved. Had she kept her own indemnity policy, the claim would have been picked up by them.

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Why the clinic needs its own cover

On the flipside, the clinic also needs to make sure that when they take on self-employed staff, they note them on their policy to protect the clinic’s exposure. When a patient makes a claim or allegation, the claim may refer just to the treatment, but it could also be about the consulting or aftercare. The clinic needs to make sure all practitioners that perform treatments are covered, because if this happens and the clinic’s name is involved, even though the claim may be covered on the individual practitioner’s insurance, there’s still exposure to the clinic.

It is vital that the clinic has the correct cover for any exposure. We have had claims in the past where the costs of a claim have been split between a clinic policy and the practitioner’s private indemnity policy if both parties have been negligent.

If a patient is dissatisfied, they are very likely to approach the clinic rather than the individual practitioner with a complaint or a claim, so the clinic needs insurance, even if it’s purely as a contingency. This way, if anything does happen, the clinic has cover in place to protect its name.

What is ‘run off cover’?

If necessary, the clinic can have practitioners on a ‘run off policy’. This will provide cover for the time when they were practising at the clinic and if a claim comes in after they left, the policy still covers them for when they were at the clinic. Medical malpractice policies are usually issued on a ‘claims made’ basis, which means that the insurance company will only cover claims made and notified during the period of cover. This may not be when the actual incident or error causing the claim occurred, it could be weeks, months or even years later. Run off cover provides protection against claims that are notified after the expiry date of a policy. It doesn’t cost anything to put someone on run off cover at Hamilton Fraser and, although technically a claim can be made up to three years after the event, we’d advise taking out run off cover for five years to be on the safe side.

Case study 3: The clinic does not name the practitioner on their policy

This third case highlights why the clinic needs to add the individual practitioner to their policy. A practitioner starts work at a clinic on a self-employed basis. The clinic does not add the practitioner as they have their own policy. The practitioner carries out a treatment on the patient, who then makes a claim for injury. The treatment had a few issues, but the real problem is that the consent and aftercare advice was not made clear to the patient. The consent and aftercare forms are in the name of the clinic.

The practitioner’s own indemnity policy will only deal with allegations for their insured, so any allegations relating to the consent or aftercare information would need to be referred back to the clinic policy. As the practitioner is not noted on their policy, the claim would be rejected, as there is no cover for treatments carried out by people not noted on the policy.

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The importance of having comprehensive cover

These cases emphasise the need for both self-employed practitioners and clinics to have their own, comprehensive insurance that meets their specific needs and covers them for the treatments they’re performing. The pandemic shone a spotlight on the importance of factoring getting the right insurance into business planning from the outset, and that applies to both individual self-employed practitioners and clinics.

At Hamilton Fraser, we offer far more than just insurance. In this article we’ve tried to answer one of our most frequently asked questions, but if you’re still confused about this issue or anything else, our team will be delighted to help. Please call us on 0800 634 3881 if you have any queries or concerns. Our expert inhouse claims team are on hand to provide tailored support based on your individual requirements.

For further reading, if you are a self-employed practitioner also working for the NHS, you may be interested in our article, Can aesthetic practitioners be self-employed whist employed by the NHS?

And in 7 reasons why you need cosmetic insurance, we take a look at some of the specific cosmetic insurance policies that practitioners need, and why they are important.