Throughout the below, where we use the term ‘the insured’ we mean the policyholder – you, our client, whom we have also referred to as 'the therapist / health professional’. An insured may also be a company or other corporate entity as well as an individual. Balens will be referred to as 'us / we' and the client of ‘the insured’ will be referred to as 'the patient / client'.
‘The insured’ (the therapist / health professional) whether an individual or a corporate entity (Limited Company etc.).
The Insurance Company.
Any person or corporate entity who is not ‘the insured’ (1st Party).
Within Balens, we use the term ‘Affinity’ for Associations and Organisations we have an agreement with. This agreement enables us to offer insurance policies to their members, students or graduates at preferential rates.
Someone who acts for someone else, usually for a benefit. As an insurance broker, we are an agent for our insurers when placing insurance, and an agent of our clients when managing their claims.
A type of property insurance which covers business equipment used at and away from the main premises for any accidental loss or damage that is not specifically excluded under the policy.
This is an option that individual therapists may add to their Balens Professional Liability and Malpractice Insurance Policy for smaller sums insured or may be added to their property insurance where relevant. Please see specific policies for details.
Balens Insurance Finance Services (BIFS)
A separate Balens company which allows us to offer insurance premium finance to our customers for the purchase of their insurance policies with us.
Breach of Confidentiality
Where someone (not necessarily a patient / client) alleges that ‘the insured’ has divulged information detrimental in some way or which could cause loss or harm to them.
Buildings and Contents
Two types of cover you can get for your property. Whereas Buildings Cover is more for perils against your property, such as fire or flood damage, Contents Cover is concerned with items other than the structure of the building i.e. things that you would normally take with you if you moved. Policies are available for individuals, businesses and Landlords, with various options offered to the latter with regards to letting properties.
Business Interruption (BI)
Business Interruption insurance, or BI, covers the actual or potential loss of profits or earnings for ‘the insured’ as a result of interruption to the business following property damage due to an insured peril, for example a fire destroying the building. Cover may also be selected for increased expenses only.
Children (and treating them)
The age of majority is 18 but for the purpose of our policies, parents must give their consent to children under the age of 16 years being treated and it is advisable wherever possible for them to be present at all time whilst such therapy is being administered. Fraser guidelines also apply – see our article on Treating Minors.
Claims Made, Claims Occurring and Balens “best of both”
Relates to when and how an Insurance policy will respond to a claim. NB: this glossary provides a general, high level guide - as always, terms and conditions apply, full details are in the policy wordings.
‘Claims Made’ policies respond to claims – for example, alleged third party injuries or property damage – which are first notified to the insured in the policy period, irrespective of when the incident itself happened.
A major benefit is that the latest policy, and the current indemnity limit, will apply to all newly reported claims. On the downside, there is no protection against claims made against you after the policy ends. When, for example you retire or cease practicing you will either need to maintain insurance or purchase specialist ‘run-off’ cover (see below), to cover you against any late arising claims.
Cover can be updated and improved each renewal. Any claim made after the update will be dealt with under the wider cover, even though the event may have taken place in a previous year.
‘Claims Occurring’ policies respond to claims based on the date the incident allegedly causing the injury or damage happened. So, if a claim is first notified three years after the treatment, the policy in force at that earlier date will pick up the claim.
Claims occurring policies avoid the need to keep a policy in force or buy ‘run-off’ cover should you cease to practice. However, there is no cover for incidents that happened prior to the policy start date. A further limitation is that if the policy in force at the time of the incident had a lower indemnity limit than today’s policy, that lower limit will be the maximum sum available for the claim.
The Balens “best of both” solution
The Balens Professional Liability and Malpractice Policy uses a ‘Claims Occurring’ wording AND automatically incorporates retrospective cover to pick up newly reported claims for incidents that happened prior to the policy inception date.
This avoids the need for ‘run-off’ cover, insures your prior work and ensures your current limit of indemnity applies to all claims. For longer term protection, once you have ceased to practice and ended the policy, you can still revert to it and (for additional premium) increase the indemnity limit to ensure it remains appropriate to protect against future late-notified claims.
So – our hybrid, best of both, policy!
Commercial Legal Protection
Covers Criminal and Legal defence costs, along with many extra covers and advice lines according to the package selected. Typically, these would include Tax Investigations, Jury Service compensation, Helplines and so on. Corporate policies also include Employment Tribunal and Employment Helplines, plus cover for contracts disputes.
Commercial Legal Protection insurance is an important adjunct to the Balens Professional Liability and Malpractice policy which focuses upon Legal Liability for damages and costs and related to negligence.
The money that an Insurance Broker earns from placing business with a particular Insurer.
Common Law Duty
There is a duty of any insured to take reasonable and responsible steps to prevent a possible claims situation or if one has occurred, to lessen the effects of any potential loss.
The rules and regulations that we as an Insurance Broker need to follow, to ensure that we meet the needs of our clients and our regulators.
Duties that ‘the insured’ and insurer must abide by to ensure that the insurance contract remains valid.
Alleged Breaches of Criminal Legislation, which may be taken to Court. Defence cover is provided in most Balens Professional Liability and Commercial Legal Expenses policies, but does not cover fines or ultimate loss of liberty.
Directors’ and Officers’ Liability (D&O)
This covers the financial risks arising from the operation of a Limited Company or Charity, where there are Directors, Trustees or Council Members overseeing the operations of the organisation. They can be held personally responsible for losses arising from Breach of Fiduciary Duty, Negligence, Mismanagement or Dishonesty causing financial loss alleged by an Independent Third Party.
The policy will cover the damages, settlements, costs and expenses incurred responding to allegations of a wrongful act by a Director or Officer working for the Company. The cover can be extended to include other elements such as advice or errors and omissions.
Disclosure – ‘fair presentation of risk’
Information ‘the insured’ needs to divulge to us that may be relevant to their policy cover – before taking out cover and afterwards to keep us up to date during the policy term. Any policy issued is based on the information ‘the insured’ provided and is crucial to the contract being sound. Your legal obligations to make a ‘fair presentation of risk’ are defined by the Insurance Act 2015. See also Fair Presentation below, and our guide to the key points of the act.
Employers Liability (EL)
This covers ‘the insured’ where they are legally liable to pay damages in respect of allegations of negligence causing accidental bodily injury to any employee in connection with the business, during the course of their employment. This will include cover for voluntary workers, any trainee or person undergoing work experience, training, study or exchange scheme. Employers Liability Insurance is a compulsory insurance in the UK for all those who employ any individual, including those doing work experience, (some exceptions apply).
Employment Practices’ Liability
This covers awards, settlements and costs in the event of employee tribunals and other litigation and expenses in connection with employee issues. Typically, an extension to Commercial Legal Expenses policies or Directors' and Officers' / Professional Indemnity cover.
An endorsement is added to the policy, either to extend, limit or restrict the cover provided to ‘the insured’.
The amount ‘the insured’ is liable for in the event of a claim. There is a nil excess on our Professional Liability and Malpractice policy, but typically £100 to £250 excess on Contents cover.
Matters that are not covered by your insurance policy, details of exclusions are clearly set out in policy documents.
Fact Find Form
Also referred to as a Proposal Form or Prop, this is a form that needs to be completed by ‘the insured’ in order to help them establish their insurance requirements and to take out a policy. This form will ask necessary questions about what cover is required, as well as potentially ask ‘the insured’ to answer declaration questions for the policy.
You are required to make a “fair presentation” of the risk to be insured in which every material representation as to a matter of fact is substantially correct and every material representation as to a matter of opinion or expectation or belief is made in good faith. You are responsible for disclosing complete and accurate information and every material circumstance which insurers require in connection with any proposal for insurance cover.
A circumstance or representation is material if it would influence the judgement of a prudent Insurer in deciding whether to accept a proposal for insurance and if so, on what terms. This is particularly important before taking out a policy and at renewal but it also applies throughout the life of a policy. Failure to do so may mean that claims are not paid, or are not paid in full.
Please note that you have a duty to inform us if there have been any changes to the original material facts declared and / or incidents occur.
GDPR – General Data Protection Regulation
A European Union Data Protection Regulation which was ratified into UK Law as the 2018 Data Protection Act. Gives additional rights to all Data Subjects (Natural or Legal Persons) and extra responsibilities for businesses regarding Data Protection.
The start date of the policy cover and insurance contract between ‘the insured’ and the insurance company.
This term covers a number of different insurance options, that offer long term benefits, when the insured is incapacitated and unable to work due to an accident or illness, includes for example Critical Illness Cover and Life Cover. Balens do not offer Income Protection policies, but are able to introduce our clients to partner organisations that are able to assist with these types of policy.
Definition – to protect someone or something against possible damage or loss by paying an indemnity to cover the costs.
Definition – protection against possible damage or loss, especially a promise or payment, or the money paid if there is such damage or loss – the principle here is that ‘the insured’ should be no better off after the incident, than they were before. N.B. The insurer indemnifies ‘the insured’, not the public. The exception to this is when a policy has a ‘New for Old’ clause for the replacement of items, for example on a Household or All Risks policy, where an item has been damaged, and a new item is provided as a replacement.
The maximum amount for any damages awarded against ‘the insured’ in court, or as an out of court settlement figure. In addition to damages, legal costs and other expenses can be a very substantial element of a claim – the Balens Professional Liability and Malpractice policy covers costs and expenses in addition to the Indemnity Limit.
A fundamental Principle of Insurance – ‘the insured’ must be entitled to receive the benefits of cover under an insurance policy, i.e. they must have a legally recognised relationship between themselves and any financial loss they have suffered as a result of an insurable event. Any other interested parties, (e.g. a bank or building society who may have an interest in a property being insured) would need to be noted on the policy documentation.
The person or business who is taking out the insurance – our client.
IPID – Insurance Product Information Document
Gives summary information in a prescribed format, on the main elements of what is, and what is not included, within an insurance policy. Specifically required for consumers rather than commercial clients.
IPT - Insurance Premium Tax
The government tax that is added to all insurance products. Currently stands at 12% (as at March 2019) for most of our UK policies.
Legal & Defence Costs
The amount to pay for the legal advice and support throughout a claims process. This can be a large amount and some policies include this within the Indemnity limit, thus reducing the amount of total cover. At Balens Legal & Defence costs are in addition to the policy limits.
Cover for goods whilst they are in transit, i.e. stock being sent to a third party. May also be linked with Money Insurance, which covers the transit of money.
Information from ‘the insured’ that the insurance company will rely on in order to judge the risk, and on which terms are offered. If a client has knowingly withheld a material fact at inception (the start of the policy) or policy renewal, the Insurer may be within their rights to refuse to pay in a claim situation. See also Disclosure.
This raises the question 'is there anything we have not been informed of that may affect the Underwriter's decision to accept the risk - at inception or subsequently?' Can be a cause for a claim to be reduced or declined - hence importance of making sure you tell us everything that may be relevant as requested on our proposal forms. See also Fair Presentation.
The purpose of Malpractice Insurance is to cover ‘the insured’ should they not perform treatments / therapies with a reasonable degree of skill and care, which could then result in possible injury, loss or death to their patient and / or client.
Mid-Term Adjustment (MTA)
A change in an insurance policy, prior to the end of the policy period. This may cause a change in the premium, resulting in an additional charge or a refund.
This covers ‘the insured’s’ money for travel to and from the bank i.e. takings, wages and in the premises for the usual insured perils during business hours. Some cover may also be extended to an employee’s or Director's house outside business hours.
No Claims Declaration (NCD)
A very important declaration by ‘the insured’, confirming that they have not become aware of any claims, suits or any circumstances which could reasonably lead to a claim being made against them or action initiated against them, since the time of signing their proposal form or renewal declaration form. Your policy cannot proceed without completing this.
An event that gives rise to a loss, e.g. a fire or flood.
Personal Accident and Sickness (PA)
A type of policy available that covers an individual for an accident that results in either a temporary or permanent and total loss (i.e. loss of a limb, loss of eyesight or death), dependent upon policy type, which may also include sickness cover. The policy will provide a lump sum, or fixed term (typically 1 – 2 years) weekly / monthly pay out, again, depending upon policy terms and conditions. This should not be confused with long term Income Protection.
Insurance which is sold to individuals as opposed to businesses, such as Household and Travel insurance.
The cost to ‘the insured’ of the Insurance product that they are looking to purchase.
This covers ‘the insured’ for any defect in goods (e.g. remedies, supplements or health aids) sold, supplied or demonstrated to a third party which may cause injury or damage.
Even if ‘the insured’ did not manufacture the item concerned and innocently passed it on, under EEC Directive and the Consumer Protections Act etc., they will still be initially held liable, as the last in the chain of supply and can be held ultimately liable.
Professional Indemnity / Liability (PI)
This is a commonly misunderstood term, and refers to a cover which indemnifies (i.e. protects) ‘the insured’ against any allegations of loss arising from the conduct of his / her / their occupation, whether treating or not. This can cover financial loss due to inadequate or incorrect advice, consultancy work etc., and applies where injury has not been caused. Breaches of Duty of Care come under the Law of Negligence or ‘Tort’.
Balens wide definition of cover in our Professional Liability and Malpractice policy is not restricted to treatment only but covers claims made against ‘the insured’ as a result of their conduct of occupation.
Proposal Form (Prop)
A form that needs to be completed by ‘the insured’ in order to take out the policy. This form will ask necessary questions about what cover is required, as well as potentially ask ‘the insured’ to answer declaration questions for the policy. Also referred to as a Fact Find Form.
A term used to describe a proportionate allocation. For example, if a client was cancelling a policy after 6 months, they would receive a pro-rata refund for the time period left.
A type of insurance that covers liability at law for causing injury to third parties (not necessarily just clients / patients) or for damage to their property through acts of negligence.
This provides cover for claims that might arise from previous work performed and / or conducted before the inception (start) of the latest policy. Typically considered for insurance policies written on a Claims Made basis.
Where an individual has a Claims Made policy, ‘run-off’ should be considered after they ceased the policy and are not looking to renew cover. It provides useful protection when they no longer need to be covered for new work but require protection to answer any claims made relating to work previously carried out under the policy.
Statement of Fact (SoF)
Used to describe a short declaration statement provided by the insurer, that states, or re-states risk information provided to them or a short series of yes / no questions about the material information regarding the risk. The SoF may be used as an alternative to the completion of a proposal form. Although this may be a simpler process that completion of a full proposal form, it is still important that all material information is provided to the insurer. The insured will be asked to confirm that the information (the facts) are correct by signing the document.
Cover those alterations that you may make to a rented premise, but which, in the event of serious damage to the building, the landlord would not be responsible for repairing.
If you are renting premises you may wish to improve or add to the property, for example, changing floor coverings, redecorating etc. Depending upon the rental contract, any changes or improvements you make to the property or room may be your responsibility to insure. In this situation, if something were to happen to the building i.e. a fire or flood, the landlord would only be responsible for returning the building to the condition it was in when you rented it from them. They would not be responsible for the changes you have made.
The term when someone has deliberately, recklessly or negligently not declared all of their material assets and their value – typically related to business contents insurance, and have not insured the full value of their possessions. Note that insurers will proportionately reduce claims where there has been under insurance of assets.
By the Insurance Act, if the breach is deliberate or reckless the insurer can void the policy and avoid the claim completely. If the underinsurance is not deliberate or reckless then you can get alternative solutions for example, pay the balance of premium, proportionate reduction in claims payment etc.
Warranty (or Condition Precedent to Liability)
A promise made by ‘the insured’ relating to facts or performance concerning the risk i.e. a promise that something will or will not be done, or that certain facts exist or do not exist.