Care service providers for disability, health services and aged care support face ongoing pressure and understandably high expectations for standards of care, which also represent critical areas of risk if they are not upheld.
A breach and unprecedented $400,000 penalty was imposed on an Australian disability provider for the first time in June 2023 by the National Disability Insurance Scheme (NDIS) Quality and Safeguards Commission. The case concerned the accidental drowning death of a client of the care provider which was found to have failed to uphold adequate safety of care.
NDIS Code of Conduct and Practice Standards1 provide a regulatory framework for disability service providers, covering appropriate levels of safety in delivering care. The first-time penalty highlights the tough stance that regulatory bodies may take in ensuring safeguards for people living with disabilities. The risk of civil penalties also highlights potential exposures that care providers and organisations should consider when seeking insurance cover.
The case2 illustrates how the death (or harm/injury) of a person living with disability can have significant consequences for an organisation's public liability, professional indemnity and management liability insurance policies, and cause significant legal, financial and reputational damage as well.
It is strongly in the interests of care organisations that they meet insurer criteria for managing the risks associated with their service delivery and can demonstrate protections aimed at safeguarding clients living with disabilities.
How insurance plays a key role in managing risks and liabilities for care service providers
From a public liability (PL) perspective, an organisation could face claims of negligence or breach of duty of care if it is found to have contributed to the circumstances that led to an individual's death. For example, if failing to provide appropriate care or support to a person living with a disability resulted in their death.
Similarly, from a professional indemnity (PI) perspective, an organisation that provides healthcare or support services to people living with disabilities could face claims of malpractice or professional negligence. Again, this could result in significant legal and financial consequences for the organisation.
Finally, the death of a person living with a disability could also have implications for an organisation's management liability. If it is found that the organisation's management failed to implement appropriate policies and procedures to ensure the safety and wellbeing of people living with disabilities, the directors and officers as well as senior executives could be held personally liable for any resulting harm.
5 key areas care providers must demonstrate risk management in to access insurance
Overall, according to the Gallagher disability services team, it is essential for organisations that provide care or support to people living with disabilities to prioritise their duty of care and to ensure that appropriate policies and procedures are in place to mitigate risks of harm.
From a risk management perspective, insurance underwriters are now requiring, as standard underwriting criteria, that businesses have adequate governance, policies and procedures in place which they can substantiate. This requirement is to ensure that insurance is not the first line of defence in providing for their clients' safety.
Most disability organisations are already adhering to strict controls, but prior to offering coverage an insurer, at a minimum, will be looking to ensure the following protocols are implemented.
1. Training programs
Potential insurers will look for evidence of employee training programs that focus on dealing with people living with disabilities. This training should cover how to handle different types of disabilities and the care plans associated with them.
2. Regular safety assessments
Regularly conducting safety assessments serves to identify potential hazards and risks for people living with disabilities. These should include access to the facility and supported independent living (SIL) homes, assistance during emergencies and identifying any obstacles for people living with disabilities.
3. Emergency plans
Development of emergency response plans should incorporate the needs of people living with disabilities. These plans should include clear instructions for evacuation, emergency medical care and communicating with individuals living with disabilities.
4. Incident reporting
In developing a process for incident reporting in case of an injury or death of a person living with a disability consideration should be given to ensuring the process is transparent and includes an investigation to determine the cause of the incident.
5. Policies and procedures
It's important to document policies and procedures for dealing with people living with disabilities, including emergency and safety procedures, training programs, incident reporting and accessibility guidelines.
Overcoming limitations in care organisations accessing insurance cover
Care services catering to clients living with disability involve high risk activities that can lead to insurers being unwilling to provide cover or seeking considerable due diligence documentation.
Any significant claim on insurance policies, particularly when there has been a death in care, can impose significant risk to future renewals being offered by insurers unless suitable risk management procedures are implemented to the insurer's satisfaction.
It is imperative that organisations seek guidance from their broker concerning an incident from the onset of the event occurring. A broker who has a good understanding of how to report the claim and seek appropriate legal assistance, backed by the insurer, is key to mitigating the claim and minimising negative effects on accessing insurance cover and associated adverse publicity.
The broker will also be well placed to discuss implications with any current insurers and position an organisation well in advance of renewal to ensure continuing coverage at renewal.
Gallagher is proud to be the endorsed broker of the National Disability Service (NDS), specialising in the disability sector's insurance needs.
Sources
1NDIS practice standards, accessed 10 Aug 2023.
2NDIS Quality and Safeguards Commission, Statement on Afford civil penalty outcome, accessed 10 Aug 2023.
