Coronavirus: 'Colossal' insurance costs threaten to make care homes 'go out of business'

A lack of insurance cover for the coronavirus and rising insurance renewal premiums are threatening to put care homes 'out of business', care leaders warn.

Mike Padgham, managing director of St Cecilia’s Care Group and chair of the Independent Care Group (ICG), which represents care homes, says his premium has skyrocketed.

Care home director faced 880% rise

Mike Padgham had a 880 per cent increase on his insurance premium, when compared to what he paid last time. He had previously paid £10,000 but his quote for renewal was £98,000.

“I do have some sympathy with the insurance companies because they’re worried about the risk, which is why I want the government to step in and help the industry.

“We stood up and accepted discharged patients into our homes from hospitals, aware of the risk but willing to do so to provide care to people with the virus and to keep our provision viable.

“Now, because of that, we cannot get insurance without paying premiums that will put enormous financial strain upon our business.

“We want to play a part to help the government if a second wave of coronavirus does come, to admit people and to help them. But we’re not going to be covered for that in the future if that’s what happens. They say ‘we’re all in this together’ but in reality some of us are and some of us aren’t."

Mr Padgham has written a letter to Health Secretary Matt Hancock calling for government intervention to indemnify care providers against insurance claims which might be made over residents who die from COVID-19 whilst under providers’ care. He has not received a reply.

The National Care Association, which also represents care providers, recently asked its members about insurance. Some 93 per cent said they had no COVID-19 insurance cover included in their renewal.

Out of 68 responses, 68 per cent said their premiums had risen.

Konrad Czajka, director of Czajka Care Group in Bradford and chairman of Bradford Care Association, told BBC Radio Leeds: “A number of providers have mentioned that their insurance premiums are going to go very, very high.

"They’re going to rocket up in price and it’s a major worry on top of all the other issues.

“The fact that occupancy rates have dropped. The fact that there are additional costs on PPE. The insurance premiums going up would just add to the disastrous effect that we’re facing in social care which is actually in crisis".

Martin Green, the chief executive of Care England, which represents care homes in the country, said on top of PPE costs, extra staff costs to cover workers who were off sick or shielding during the pandemic, care homes have premiums that are “colossally rising” and would force some care homes to shutdown.

The risk of people suing care homes because of the impact of COVID-19 has led to some insurance providers exiting the market. Insurance firms that remain in the market are increasing premiums for care providers to mitigate against the virus risk.

Calling on the government to give similar indemnity to social care as the NHS to protect providers against the financial impact of the pandemic, Mr Green added: “It is essential that the adult social care sector is funded and supported accordingly. Also it is imperative that the government considers what policy mechanisms and guidance are at its disposal to support the frontline for example the indemnification of the sector.

“If we don’t see some action, we’ll find care homes that won’t be able to afford the premiums.

"If you can’t be insured, you can’t be registered as a registered care service. Those services will go out of business."

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