MIAB logo

Primary Care Networks (PCN)- incorporation and insurance considerations

The majority of practices who have collaborated have been working under joint contracts for the last 12 – 18 months. As contract’s are being renewed, they are being transferred into the main PCN name. This involves creating a separate company or provider arm, which is owned by but distinct from the members of the PCN.

There are a number of options available to PCNs for incorporation, which will provide limited liability to the member practices, that own and run the business.

Options include;-

  1. Companies Limited by Shares
  2. Companies Limited by Guarantee
  3. Limited Liability Partnerships

In addition, PCNs can incorporate as a Community Interest Company (CIC), set up to benefit the community and not its shareholders, directors or employees. Generally, the first option above offers greater flexibility and supports the fact that GMS/PMS contracts can only be held by individuals, partnerships (not Limited Liability Partnerships) or Companies Limited by Shares. Operating at scale opens up new risks which is why many opt for the Limited Liability company structure, to minimise liabilities.

Incorporation has necessitated a great deal of work behind the scenes, such as getting all employees TUPE’d across and setting up pensions, to ensure the back office is in place before incorporation. Other contracts, including insurance will also need to be transferred and the company will need to apply for CQC registration for which indemnity and insurance in the business name is a legal requirement. In addition, there may be VAT implications for seconded staff.

Once this is complete the PCN then assumes employee responsibility and management of services. It is therefore important to ensure that the right covers in place to adhere to contract requirements.

Prior to incorporating there are gaps in cover which could be exposed. We have been adapting our covers to meet the requirements of PCNs as they evolve.


A limited company has insurance obligations

No matter what form the incorporation takes, you need to protect the organisation, those running it and the professionals delivering the services. The limited company will need Employee Liability and Public Liability cover as it is ultimately responsible for the staff whose services they engage to fulfil their contracts. A limited company cannot therefore, just rely upon the underlying GP practice cover to protect staff.

The insured (limited company) are typically responsible for management of services however there will be line managers in place at core practices, clinics, trusts, care homes etc…who will also oversee staff. It is vital that the business maintain their own Professional Indemnity cover for issues which fall outside of state backed indemnity or medical malpractice. For example, where there is advice given or protocols implemented, which lead to financial loss without any direct negligence from treatment. We can offer an insurance policy that covers both the entity and all the practitioners within in, individually.

We also offer a Management Liability policy to cover Directors & Officers, Employment Practices and Company Legal protection. In addition you should consider group policies for our Locum Insurance, Practice Insurance and personal protection policies.

Talk to us about a free, no-obligation risk assessment or comparative quote at your next renewal.