Are you and your practice properly insured? Charmaine Teoh looks at the personal and professional insurance vet practices should consider
At 12.30am on 29 August 2014, the pizza parlour three doors away from Better Pet Vets in Andergrove, Queensland, exploded into flames. Firemen did their best to put out the blaze but within an hour, Better Pet Vets and three surrounding businesses were destroyed.
“There were eight animals in the practice at the time, including my cat,” says Dr Holly Goldring, the co-owner of Better Pet Vets along with her husband Dr Ashley Young. “The firemen managed to save six of them, but my cat and another animal died.”
Better Pet Vets also lost assets worth an estimated $750,000 in the fire, and the site itself was so badly damaged, it had to be demolished.
While the community was supportive in the weeks after the fire, Dr Goldring acknowledges that people have to move on. “People will wait for you for a period of time but they need to get on with their own lives,” she says. “Our business is our life and we were acutely aware we needed to get back to normal operations as soon as we could. Time was critical.
“We also had 20 employees and we didn’t want to lose any of them,” says Dr Goldring. “Our staff is like our family. They were not only traumatised over the loss of the clinic and animals, but were also worried about their jobs. We wanted to make sure they were looked after.”
With her business on the line, Dr Goldring rang her insurance provider, Guild Insurance, on Friday morning, who sent an assessor straightaway to review the damage.
“Guild was impeccable,” says Dr Goldring. “They understood that time was critical, and asked, ‘What do you need to get up and running and how do we help you make this happen?’ Together, we came up with a plan for a temporary facility.”
While the forensic investigation was taking place, Dr Goldring began sourcing new vet equipment while her husband worked on the fit-out for the new facility. They also started a house-call service to stay in touch with clients and keep staff motivated.
Nine weeks after the fire, Better Pet Vets was up and running in a temporary location behind its old premises. The couple are currently building a new stand-alone animal hospital—“We don’t want to be next to another building again”—which will open next year.
Choosing the right cover
Better Pet Vets’ experience highlights the importance of having a comprehensive insurance policy that covers all contingencies, and of regularly reviewing the policy.
“I went to a conference about four years ago and heard a sobering lecture by an accountant who does a lot of strategy planning with vet clinics,” says Dr Goldring. “It made me realise what could happen if we didn’t have our insurance up to date.
“I came home and went over our insurance policies thoroughly. Ash and I discussed all the possible scenarios: if I get sick and can’t work, what would he need? People need to think about worst-case scenarios and how they are going to financially protect themselves.”
Dr Goldring also advises people not to cut corners when it comes to insurance. “Saving a couple of thousand dollars on your premium isn’t going to be worth it if something happens and you find your policy doesn’t cover you,” she says.
“When you’re evaluating your insurance program, it is important to understand the insurer’s approach to paying claims, their experience in your industry, ability to provide you with the necessary service when you really need it, and what other support they provide to your profession,” says Drew Fisher, head of client partnerships at Guild Insurance, the principal partner of the Australian Veterinary Association (AVA).
“Guild has maintained an exclusive national partnership with the AVA for more than 30 years, which has resulted in us developing a deep understanding of the veterinary profession. For example, we have an Emergency Animal Disease Response insurance policy that provides specialist cover to veterinarians if they become involved in an outbreak of a notifiable quarantinable disease with livestock. No other provider offers this policy,” he says.
Essential business insurance
Here are some types of business insurance that all vet practices should have.
Professional indemnity insurance
Although there is no legal requirement for veterinarians to have professional indemnity insurance, Fisher says that whether you are an employee, consultant, contractor, locum or business owner, this insurance is absolutely essential.
“Veterinarians are operating in a much more litigious environment than they have done in the past,” says Fisher. “In Australia recently, the number of litigators and reported incidents have increased, as has the cost to defend our customers. Without having specialised, industry-specific, professional indemnity insurance in place, vets are putting their own name, business and personal assets at risk.”
Workers’ compensation insurance
Practice owners are legally required to insure direct employees and in many cases, contractors, and the insurance must be in place before you hire any workers.
Management liability insurance
If you own your practice, management liability insurance protects you against employment practices liabilities, statutory liabilities, directors and officers liabilities, and theft by staff.
Public liability insurance
All businesses should hold public liability insurance in case they have to pay compensation for personal injury and/or property damage, as well as legal expenses.
Business asset insurance
Business asset insurance generally covers assets, including buildings and machinery, which have to be repaired or replaced due to disaster, criminal acts or, in some cases, accidents.
In Better Pet Vets’ case, business asset insurance enabled the practice to pay for the fit-out of the temporary facility, including three consulting rooms, two surgeries, a reception area and 35 cages. Business interruption insurance also covered lost revenue while the fit-out was taking place, as well as staff wages.
“It’s important to review your policies annually to ensure the level of cover matches your circumstances and requirements,” advises Dr Goldring. “Because we provided our revenue figures to our provider on a regular basis, when the fire happened, the insurance sum was right where it should be.
“If you purchase new equipment, make sure your insurance is updated as well,” she adds. “Our practice is only six years old so I knew how much our equipment was worth. Our cover was within five per cent of the actual value of the equipment we needed to replace.”
Insurance can also help cover costs if you are unable to work due to illness, injury or total and permanent disability. You or your beneficiary can use the funds to pay off debts and/or create an income stream.
For instance, income protection insurance provides a monthly income of up to 75 per cent of your current annual income in the event that you can’t work due to illness or injury. Life insurance provides a lump sum to your nominated beneficiary in the event of your death, while total and permanent disability insurance pays a lump sum to your beneficiary in the event you become totally and permanently disabled.
The last word goes to Dr Goldring: “We left our practice at 4.30pm on Thursday to go away for the weekend and on Friday morning, we had nothing. It can happen to anyone at any time.”