Indemnity for an Independent Clinic Taking NHS Patients: A Checklist of Questions to Settle First

Indemnity for an Independent Clinic Taking NHS Patients: A Checklist of Questions to Settle First

Practitioner indemnity, clinic liability and NHS contract requirements are three different questions, and the common error is assuming one policy answers all three. An independent clinic taking NHS patients needs to resolve each in writing with its broker and insurer before signing a contract, not assume that existing private-pay cover extends automatically to commissioned work.

This is not insurance advice. Speak to a regulated broker who understands healthcare indemnity before you commit to any NHS tender or framework award.

The three types of cover and why each matters

Most clinics hold professional indemnity for their clinical staff. Fewer hold employers' liability and public liability at company level, and fewer still have checked in writing whether their policies cover NHS-commissioned work alongside private-pay activity. When an NHS tender asks for evidence of insurance, the commissioners are looking at all three: cover for individual practitioners, cover for the legal entity delivering the contract, and the contract-specific risks written into the specification.

A worked example makes this concrete. A physiotherapy clinic holds individual professional indemnity for each practitioner at £6 million per claim. The clinic company holds employers' liability at the statutory minimum of £5 million and public liability of £2 million. An NHS Integrated Care Board issues a direct award under the Provider Selection Regime for community musculoskeletal services worth £180,000 per year. The contract schedule requires the provider to hold professional indemnity of £10 million per claim, employers' liability of £5 million, and public liability of £5 million. Two gaps appear immediately: practitioner cover is too low and public liability is too low. A third question follows: does the existing professional indemnity policy cover NHS work at all, or does it exclude commissioned contracts?

Questions to put in writing to the broker

Ask your broker to confirm in writing, before you submit a tender or accept a framework award, whether your existing policies cover NHS-commissioned work. The wording matters. Some policies exclude work under NHS Standard Contracts. Others exclude contracts where the commissioner exercises control over clinical protocols or service pathways. Others exclude any work that is not private-pay. Do not assume. Ask the broker to refer the question to the underwriter if necessary and give you a written response that names the contract or framework you are pursuing.

Ask whether the policy covers claims arising from services delivered during the contract period but reported after the policy has lapsed or been replaced. NHS contracts often run for two or three years with extension options, and claims can surface years after the event. The policy needs either to operate on a claims-made basis with run-off cover or to operate on a claims-occurring basis. If you switch insurers midway through a contract, ask how cover transfers.

Ask whether the policy limits apply per practitioner or per company, and how aggregation works. A clinic with five physiotherapists might assume it holds £30 million of cover in aggregate if each practitioner holds £6 million. In practice, the policy might aggregate all claims arising from the same service failure under a single limit. If the contract requires £10 million per claim at company level, individual practitioner policies do not satisfy the requirement unless the company is named as an additional insured.

How company-level and individual cover interact

NHS commissioners contract with the legal entity, not with individual clinicians. A sole practitioner trading as a limited company is the company for contract purposes. A partnership of three physiotherapists is the partnership. The contract schedules will require the provider (the legal entity) to hold specified levels of cover. Individual practitioner indemnity does not discharge that obligation unless the policy names the company as an insured party or the contract explicitly permits individual cover to satisfy the company requirement.

Some contracts do permit this. The NHS Standard Contract for community services, for instance, often accepts individual professional indemnity held by each member of the clinical team provided the aggregate cover meets the threshold. But the provider must still evidence that each practitioner holds current cover and that the cover extends to NHS work. If one practitioner's policy excludes NHS work, the provider is in breach even if the other staff are covered.

Company-level professional indemnity, separate from individual practitioner cover, is common in larger clinics and those delivering multiple contracts. It typically sits above individual policies and covers vicarious liability, corporate negligence, and aggregated claims. It is not a legal requirement but it often simplifies compliance with contract schedules that specify high limits at company level.

Private and NHS work under the same policy

Most clinics deliver a mix of private-pay and NHS-commissioned work. The insurance question is whether one policy covers both or whether separate policies are required. Some insurers exclude NHS work entirely from policies designed for private practice. Others charge a higher premium if the insured undertakes NHS work. A small number of specialist insurers write policies specifically for providers working across both models.

The practical difficulty is not the premium but the claims history. A claim arising from private work can affect the terms on which the insurer renews cover for NHS work, and vice versa. If the clinic holds separate policies, a claim under one does not automatically trigger disclosure requirements under the other, though any finding of negligence or regulatory sanction must be disclosed to all insurers.

Check whether the policy requires you to notify the insurer when you take on a new NHS contract or framework. Some policies treat a new contract as a material change in risk and require prior written consent from the underwriter. If you sign a contract and later discover the insurer has excluded it or declined cover, you are exposed personally and the contract may be void.

How contract and commissioner insurance requirements are read

Every NHS contract schedule includes an insurance clause. The Provider Selection Regime guidance published by NHS England in the earlier period of 2024 makes it clear that commissioners must be satisfied that the provider holds adequate insurance before awarding a contract, and must monitor ongoing compliance. In practice, this means submitting certificates of insurance at the point of contract signature and renewing them annually or whenever the policy renews.

The contract will specify minimum levels of cover for professional indemnity, public liability and employers' liability. These are typically expressed as pounds per claim and pounds in aggregate per year. Read both figures. A policy offering £5 million per claim but £5 million aggregate is materially different from one offering £5 million per claim with unlimited aggregate. Commissioners sometimes specify aggregate limits and sometimes do not. If the contract is silent, check with the commissioner before assuming unlimited aggregate is acceptable.

Some contracts require cover to be underwritten by an insurer rated A or above by a recognised ratings agency. Some specify that the insurer must be authorised by the Prudential Regulation Authority or equivalent. If your insurer operates under European passporting arrangements or is domiciled outside the UK, check that the contract permits it.

What to check before you submit a tender

Before you respond to any NHS tender or accept a direct award, obtain written confirmation from your broker or insurer that your policies cover the contract, that the limits meet or exceed the contract requirements, and that no exclusions apply. If your cover is inadequate, obtain a quote for the increased limits and factor the additional premium into your pricing. Do not submit a tender on the assumption that you can arrange cover later. Commissioners often require evidence of insurance at the point of contract signature, and some require it as part of the selection process.

If you are applying to an NHS framework such as RM6291 NHS P23, check the framework terms as well as the individual call-off contract terms. The framework may set baseline insurance requirements that apply to all suppliers, and individual call-offs may add further requirements. You must meet both.

Check whether the contract or framework permits you to increase your prices if your insurance premium rises during the contract term. Most NHS contracts do not permit this unless there is a specified contractual mechanism. If your premium doubles at renewal because of a sector-wide claims event, you may be locked into a loss-making contract.

Frequently asked questions

Does professional indemnity for private patients automatically cover NHS patients?

No. Many professional indemnity policies exclude NHS-commissioned work or treat it as a material change in risk requiring the insurer's prior consent. Ask your broker to confirm in writing whether your policy covers NHS work before you sign any contract. If it does not, arrange separate cover or switch to an insurer who will cover both.

Can I use individual practitioner indemnity to meet the contract requirement for company-level cover?

It depends on the contract terms and the way your policy is written. Some NHS contracts accept individual cover provided every clinician is insured and the aggregate meets the required limit. Others require company-level cover that names the contracting entity as the insured. Check the contract schedules and ask your insurer whether the company is named on the individual policies. If not, consider arranging company-level professional indemnity.

What happens if my insurer cancels my policy midway through an NHS contract?

The contract will be in breach unless you arrange replacement cover immediately and notify the commissioner. Most NHS contracts require you to notify the commissioner if your insurance is cancelled, lapses or falls below the required limits. Failure to do so is usually a termination event. Check your policy for the cancellation provisions and whether you have any run-off cover for claims arising from services delivered before cancellation.

Glaxtons works with independent clinics and healthcare providers preparing for NHS tenders, framework applications and Provider Selection Regime awards. Our fees are fixed and agreed before work starts. If you are planning to bid for NHS work and need to understand the insurance and compliance requirements before you commit, we can help.

Call 020 3668 5488

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