A healthcare practice operation relies on assets such as consulting rooms, reception areas, medical equipment, diagnostic tools, computers, servers, patient records and electronic systems to function every day.
For healthcare professionals, unexpected events such as fire, flooding, theft, burglary, machinery breakdown, power surges and accidental damage to electronic equipment can disrupt the ability to consult, diagnose, treat and bill patients. When any of these assets are damaged, stolen or unavailable, patient care and practice income can be impacted negatively.
Depending on the extent of the damage, a practice may need to close temporarily while repairs, replacements or system restorations take place. During this time, appointments may be cancelled, patients may be redirected elsewhere leading to loss of income.
Asset insurance helps a practice recover after an insured event — but the value of the cover depends on whether it is relevant, adequate and structured around the realities of the practice. The following extensions can strengthen the protection provided by an asset insurance policy:
Business Interruption cover:
Asset insurance may pay for the repair or replacement of damaged property, but it does not automatically replace the income lost while the practice is unable to operate. Business Interruption cover helps protect the practice against loss of revenue following an insured event. This can be critical in helping the practice continue paying expenses, retaining staff thus returning to normal operations quickly.
Loss of income following electronic equipment damage:
Many healthcare practices rely on electronic equipment for diagnosis, treatment, record-keeping, billing and claims submission. If this equipment is damaged or breaks down, the practice may lose income even if the physical item can be repaired or replaced. Consequential loss of income cover following damage to machinery or electronic equipment can help protect revenue during this interruption.
Power surge cover:
Power supply instability remains a practical risk for many South African practices as outages or load shedding affect daily operations. When electricity is restored, power can surge causing damage to sensitive equipment such as computers, diagnostic machines, and electronic medical systems. Power surge cover is therefore important for practices that depend on technology to deliver care.
All Risks cover:
Healthcare practitioners often use portable equipment outside the practice, whether for home visits, outreach services, conferences, training or work between different consulting rooms. All Risks cover can protect specified portable items while they are away from the practice premises.
Common mistakes that can reduce the value of your cover
Under-insurance:
Assets should be insured at their full replacement value. If the insured amount is lesser than the replacement cost, the insurer may apply the principle of average at claims stage. For example, if a building has a replacement value of R2 million but is insured for R1.5 million, it is 25% under-insured. If storm damage results in a claim of R200 000, the insurer may reduce the settlement by 25%, paying only R150 000.
Not updating the asset register:
Practices should update their insurance whenever equipment is bought, replaced or disposed of. New items that are not added to the policy may not be covered, while assets that have been sold or discarded should be removed to avoid paying premiums for items the practice no longer owns.
Not complying with policy conditions:
Having cover in place is important, but so is complying with the conditions attached to that cover. Conditions may include maintaining a linked alarm system in good working order, installing tracking devices on vehicles, keeping fire equipment serviced, or meeting specific safety requirements. Failure to comply with these conditions may result in a claim being rejected.
With the right advice and correctly structured cover, asset insurance can help protect not only property, but also continuity of care, revenue generation and the long-term sustainability of the practice.