When you’re setting up a medical practice, there is a myriad of details to consider. Sometimes, practitioners get so caught up in the details of the process that they fail to act on critical issues like determining the ideal amount of practice cover to obtain, especially regarding locum insurance. The cost of engaging a locum for an extended period can put serious financial stress on any practice, so it’s only prudent to purchase comprehensive locum cover to protect the investment you’ve made. Here are a few key reasons why having the correct amount and type of locum insurance is essential.

Practice Cover: Key Reason to Obtain Locum Insurance

A medical practice without locum insurance is likely to incur thousands of pounds in expenses should it need to engage a locum for an extended period. A typical scenario is that when a practice partner needs to be absent, the remaining members cannot make up the shortfall caused by the absence. Perhaps the members of the practice believed they were saving money by not obtaining cover, but financial authorities agree that such a decision can have dire consequences for the practice. Certainly, this insurance costs have increased in recent years, but one successful lawsuit could wipe out a practice entirely. The same is true for practices that haven’t updated their cover to keep pace with rising costs. It’s not just an unexpected absence of a partner from the practice. If a partner decides to retire early, for example, the cost might be as much as £10,000. Few practices are prepared to handle an amount like that.

Practice Cover: More About Locum Insurance

Financial advisors routinely advise their clients in medical practice to review their locum cover every 3 years. As a minimum, maintaining at least £1000 of weekly cover is recommended. This will ensure that any costs related to locums are paid by the insurance and not by way of the practice’s general account. A recent study found that GPs require at least £4500 to £5000 per week of locum insurance cover, but that many of the practitioners surveyed had old, outdated cover amounting to just £100 per week.

Practice Cover: Case in Point

Recently, a GP took sick, and did not have locum insurance. This physician had partners, but they covered him only for a few weeks, after which the practice engaged a locum. The monthly cost of the locum was more than £3000, a sum the GP was forced to pay out of his own pocket for several months. The lesson? Don’t assume your partners are able (or willing) to provide adequate cover for you. The wisest solution is practice cover in the form of locum insurance. Since the cost of this insurance is tax-deductible, there’s no reason not to obtain it. As an example, if you’re in your mid-30s, and wish to obtain about £1200 in locum insurance, your monthly premium would be about £90.

With practice cover being so affordable, there’s no reason not to obtain it.