The biggest risk for any practice is losing the surgery building and its contents. Whether the GPs own or rent their premises, surgery insurance is essential, but the cost and the cover it buys should undergo the same scrutiny as any other practice expense.
Surgery policies are packages, such as the example on the right. The Medical Sickness Society advises GPs to look around for the best deal.
'Insurers set wildly different premiums for what are often similar policies,' says a spokesman. 'Some insurers change their premiums on a daily basis or offer special discounts.'
Oxfordshire practice manager Les Waller at the five-GP Broad Shires Health Centre reviews the practice's current policy against other insurers' policies each year.
'But it's difficult to compare like with like sometimes,' he says. 'One company will throw in cover for one thing and then not insure you for something else.'
Mr Waller says the practice has used Somerset-based Medical Insurance Consultants for several years.
Although the brokers have stayed the same, the insurer may change from year to year.
The practice's experience of claiming was positive when its brand new surgery suffered vandalism shortly after it opened.
'We were sent a form to fill in, the broker dealt with it and the next thing we knew we got a cheque,' says Mr Waller.
Luckily the claim did not affect the following year's premium, but the practice followed the insurers' advice to install external CCTV. The building has not been vandalised since.
Mr Waller says his three essential requirements are a good price plus an insurer that will pay out and minimal paperwork.
Postcode is all-important with premiums costs. For example, a surgery in inner Manchester with several recent claims might have to pay 25 per cent more compared to an equivalent surgery in a quiet Devon market town.
Another factor affecting the cost is security. If a practice has put in a claim following a burglary, any measures subsequently taken to improve security, such as a better alarm system and stronger locks will count in its favour when setting the following year's premium.
Medical Insurance Consultants' managing director John Downing believes GPs should opt for a specialist insurer rather than buy an off-the-shelf general office policy.
He cautions that while shopping around on price is important, meticulously comparing the cover offered by different policies is vital.
'When it comes to the crunch, what you want to know is will they pay out,' he says.
Charles Thomas, from insurance brokers R K Harrison offers a specialist surgery insurance policy with a no-claims discount. This rises from 5 per cent after a year without claims to 10 per cent after five years' of no claims.
Quality of underwriter
He suggests that practices may want to take into account who underwrites policies.
For example, his firm opts for insurers with an 'A' star or higher rating from Standard and Poor's, a prominent provider of credit ratings for the financial industry.
Over-insuring is a waste of money. For instance, some insurers report practices buying £1.5 million-worth of loss-of-income cover.
While that might be the total annual income for a large practice, it is highly improbable that if its surgery burnt down, the practice would not be able to set itself up in temporary premises and keep earning a substantial proportion of its NHS income within a week or two.
Insurance for computers and the data on them is, however, probably the most difficult area in surgery insurance.
Since the new GMS contract, the ownership of most IT equipment has switched from practice to primary care organisation (PCO). Any equipment owned by a PCO is its responsibility, but the PCO may still expect the GPs to get cover against damage due to the practice's negligence.
Another problem is that insurers set their premiums and security requirements on the basis of the value of the building's contents.
If a practice has £60,000 worth of IT equipment, only £10,000 of which it owns and insures, an insurer may still need to take into account the whole value of the contents. This is a point worth checking.
There several ways to keep down the cost. Keith Longthorne, head of commercial at medical insurers Towergate MIA, recommends that practices proactively manage risks in their surgeries to keep down the cost.
He says that enhanced security measures, good health-and-safety measures to avoid 'slips and trips' and general enhanced vigilance to prevent petty and opportunistic thefts will, for example, help achieve premium discounts.
Mr Longthorne says practices buying multiple products - for example, surgery insurance and locum cover - from the same insurers and entering into long-term agreements (three years say) are likely candidates for a discount.
'Be prepared' is the message for practices shopping around for cover.
Paul Roach from BusinessInsure suggests having an information checklist that the insurer will ask for. This should include claims or losses in the last five years.
It should include the type of intruder security and the type of building construction; for example, if it is brick built, together with the sums that the building, computers and peripherals, all other contents and items when temporarily away from the surgery are insured for.
Armed with this, if you spend a couple of hours on the phone or on the internet obtaining quotes, you should be able to net a good deal.
BMA Services www.bmas.co.uk 0845 010 1121
Business Insure www.businessinsure.co.uk 0845 6024589
GPFC www.gpfc.co.uk 0845 300 1129
RK Harrison www.rkharrison.com 0800 032 0303
Medical Insurance Consultants www.m-i-c.co.uk 0800 163 870
Medical Sickness Society www.medic.medicalsickness.co.uk 0800 358 6060
Towergate MIA www.towergateunderwriting.co.uk (01438) 739739
COMPREHENSIVE SURGERY POLICY EXAMPLE
LOW RISK AREA SUM INSURED
Buildings, incl all risks and subsidence £622,450
General surgery contents £60,000
Computers/video equipment £20,525
Drugs - refrigerated £2,150
Drugs - non-refrigerated £2,065
Medical bag £750
Unspecified medical equipment £2,500
(away from premises)
Loss of income £60,000
Increased cost of working £40,000
Reinstatement of data £10,000
Book debts £20,000
Personal assault £10,000
Full theft cover, incl walk-in theft Automatically included
Employer's' liability £10 million
Public liability £2 million
Annual premium, low-risk area £942
Policy excess: first £150 of each claims.
Exact package will vary with insurer.