From our experience, care homes in the UK may face greater challenges securing insurance as a result of the COVID-19 pandemic, with fewer carriers offering cover due to the number of COVID related claims. Understanding the different covers and cover levels available can help you obtain a policy that reflects your risk while also controlling your costs.

In the current economic climate, care homes are experiencing a combination of pressures, from staff shortages and funding shortfalls to soaring energy bills. This is alongside the potential for increased insurance premiums so it’s important to take the time to review your policy from both a cost and cover perspective.

As a specialist in care home insurance, we have created a guide to the different types of covers that can work together to protect your business.

In this guide, we cover:

  • What insurance covers are required for care homes?
  • Insurance for the business and its directors
  • Protection for staff and the business as an employer
  • Insurance for care home residents’ personal effects or theft of residents’ belongings by an employee
  • How to ensure your care home has sufficient cover
  • Care home insurance from Gallagher

Did you know?

  • There are approximately 17,100 care homes in the UK 1

  • The UK’s residential care home population is over 400,000 1

  • The average size of a UK care home is around 20 residents 2

  • There are approximately 1.59 members of staff to every resident in UK care homes 2

Why do I need care home insurance?

Whether it’s the service user, their relatives or the local authority who meets the cost of care home fees, they will want to know that the care home has the relevant insurance covers in place. For local authorities, having adequate insurance is a requirement for all types of care businesses, whether residential or domiciliary, and is also a stipulation of the Care Quality Commission (CQC).

Aside from these regulatory requirements, having care home insurance can help keep your business running—even in the event of a major claim against it.

What insurance covers are required for care homes?

The issues and risks that can arise in the provision of services for elderly or vulnerable people are very different from many other sectors. This means that standard business insurance is not always suitable.

While all care homes, by law, need employers’ liability insurance, and should also have public liability insurance in place, many other covers can be included in an insurance programme to protect the business from specific types of risks. Insurance requirements will vary according to the services the business provides, the size of the home and other factors such as whether the business owns the property.

To break it down, let’s look at what and who you need to protect—and the covers you should consider to help you do this effectively.

Insurance for the business and its directors

Public Liability: If you are deemed to be liable for an injury to a resident, member of the public or other third party, or damage to their property, public liability insurance will help protect your organisation from the financial impact of a compensation claim.

Professional Indemnity: Covers the legal and defence costs involved if a resident or their family makes a claim against your organisation because of perceived negligence. This could be due to poor care or incorrect advice, for example, when writing and implementing a care plan for a resident.

Business Interruption: If your business cannot operate for a period of time due to an insured event, this cover will step in to cover loss of income during the indemnity period. For residential homes this can be an extremely important cover as the pay-out would need to cover alternative accommodation for residents during the time of interruption.

Treatment Risk: This insurance is designed to cover the costs of legal defence and compensation in the event of a claim by a service user for injury caused by treatments they have received under your care. This could be, for example, due to an allergic or adverse reaction.

Medical Malpractice: This cover is designed to protect the organisation if it becomes the subject of a compensation claim due to negligent act or omission that leads to substandard treatment or unintentional injury.

Directors’ and Officers’ (D&O) liability: A form of liability insurance that protects your key people legally as individuals should a claim be brought against them for actual or alleged wrongful acts. These could include, for example, a breach of trust, breach of duty, error or neglect.

Buildings and Contents: Buildings insurance will cover the cost of repair or reinstatement if the building is damaged, for example, due to fire or flood. Likewise, contents cover can help to replace contents that are lost, damaged or destroyed.

Cyber Liability: This cover can be vital in the event of a data breach or other cybersecurity incident involving your business as it is designed to cover the associated financial costs.

Fleet: Insurance cover can be arranged for all of your vehicles under a single fleet insurance policy, with a single insurer and single renewal date.

Protection for staff and the business as an employer

Employers’ Liability Insurance: In a sector where lifting and handling can be part of an employee’s job, and work-related stress is common, it is important to protect the business against claims for a physical or psychological injury. Violence in social care is also a known risk—with violent and aggressive incidents being the third-biggest cause of injuries reported under RIDDOR from the health and social care sector. By its nature, employers’ liability insurance for care homes also offers some protection and reassurance to employees.

Abuse and Molestation Cover: Unfortunately, abuse claims against employees in care settings are one of the risks that this sector faces. If a member of staff is subject to a claim of abuse or molestation, this insurance can provide financial protection for the organisation—whether the incident of abuse is actual or perceived. In a sector that relies on the provision of personal care—or at the very least—close-contact care services, employers need to consider the risk of this type of claim and how they would respond.

Personal Accident: If you or a member of staff suffers a serious injury while at work, this cover can pay compensation and help protect against loss of income for the individual involved.

Insurance for care home residents’ personal effects

Residents’ Personal Effects: Contents insurance for care home residents can be an important cover to include in your policy. This will cover the cost of replacing lost or damaged personal belongings in the event of a named peril such as a fire or flood.

Theft of Customers’ Property: Also referred to as ‘employee dishonesty insurance’ or ‘employee theft insurance’, this cover can pay out to replace an item belonging to a resident that is stolen, or deemed to be stolen, by an employee.

How to ensure your care home has sufficient cover

When getting a care home insurance quote, it is important to be as accurate as possible with the details you provide. For example, for your buildings and contents insurance you will need to include any modernisations, extensions or equipment additions so that the insurer can calculate a ‘sums insured’ level so that you don’t accidentally exceed the amount you are covered for. As care home insurance is a specialist area of insurance, it is important to work with a broker who can demonstrate the relevant risk management expertise across the different areas of your business.

Care home insurance from Gallagher

Gallagher has been providing insurance for care homes for many years and we understand the challenges that care home managers are facing today as they try to balance quality care with cost control.

By choosing us for your care home insurance you will benefit from:

  • Exclusive access to insurers specialising in the care sector
  • Bespoke cover—choose a level of cover to suit your organisation’s unique needs
  • All the covers you require under a single policy with a single renewal date
  • A dedicated contact within the team all year round—no call centres
  • 25 years’ experience working within the care sector
  • A broking team that understands your needs

We can also explore ways in which we could save you money on your policy while still providing cover that reflects your level of risk.

If you would like to talk to a member of our specialist team, please get in touch.

These are brief product descriptions only. Please refer to the policy documentation paying particular attention to the terms and conditions, exclusions, warranties, subjectivities, excesses and any endorsements.

  • Gallagher Care Team


This note is not intended to give legal or financial advice, and, accordingly, it should not be relied upon for such. It should not be regarded as a comprehensive statement of the law and/or market practice in this area. In preparing this note we have relied on information sourced from third parties and we make no claims as to the completeness or accuracy of the information contained herein. It reflects our understanding as at 19.12.2022, but you will recognise that matters concerning COVID-19 are fast changing across the world. You should not act upon information in this bulletin nor determine not to act, without first seeking specific legal and/or specialist advice. Our advice to our clients is as an insurance broker and is provided subject to specific terms and conditions, the terms of which take precedence over any representations in this document. No third party to whom this is passed can rely on it. We and our officers, employees or agents shall not be responsible for any loss whatsoever arising from the recipient’s reliance upon any information we provide herein and exclude liability for the content to fullest extent permitted by law. Should you require advice about your specific insurance arrangements or specific claim circumstances, please get in touch with your usual contact at Gallagher.