What insurance do you need to win an NHS contract?

Winning a contract with the NHS can start an exciting growth trajectory for your medtech business. It can open you up to grants, a whole new user base and expand your reach.

But it’s also a complex and often protracted process. One of the key ingredients to a successful tender is insurance. So what are the most common covers you’ll need to have in place, and what can you do to cut costs when you’re funding is already stretched?

The tender process

The NHS provides free care at the point of need to over 1.6 million people a day, and is the seventh largest employer globally, with over 1.7 million employees. It’s one of the pillars of life in the UK, so it’s no wonder the former Chancellor of the Exchequer Nigel Lawson said that “the NHS is the closest thing the English people have to a religion”.

As a publicly funded service, transparency around how the NHS spends money and awards contracts is paramount. Anyone can apply to be an NHS supplier — from cleaning contracts to clever AI, meal times to medtech marvel.

You can search for upcoming and open government contracts out to tender over ￡25,000 on the Contracts Finder site. The product or service you’re providing will depend on the contract pathway you take.

There is one pathway specifically for healthcare services — in communities, for GPs and urgent care — and another for products and consumables, such as wound care, diagnostics and therapeutics.

As with anything public service related, there are a myriad of processes and procedures in place to ensure that funds are being spent effectively and that the products and services do what the NHS need them to.

Because of this, applying for contracts, being awarded them and ultimately getting paid, could take a significant amount of time.

Before you’re even considered for a contract you’ll need to have the right insurance policies in place. The specifics will be detailed in the contract and will differ depending on the products or services you provide. So let’s take a look at the most common types of cover you may see.

Insurance policies you might need

The tender process will outline the specific insurance policies that you’ll need, as well as the level of cover, depending on the product or service you’re providing and the contract you’re applying for. We’ve laid out the most common here.

Professional indemnity insurance

The first cover you’ll likely need is professional indemnity insurance. If a third party accuses you of professional negligence, having professional indemnity insurance may help to cover any associated legal costs.

Also known as errors and omissions insurance, professional indemnity can cover mistakes in the services you provide, compensation claims, contract and intellectual property disputes.

Errors in the output of your tech can also be covered by this insurance. For example, if your AI screening tool provides the wrong result or misses an issue, something which could have devastating consequences to a patient’s health.

The NHS normally have very strict requirements for professional indemnity insurance, with a minimum of ￡5m cover usually stipulated.

Cyber insurance

Then there’s cyber insurance. Also known as cyber liability insurance or cybersecurity insurance, this is designed to cover risks that come with storing and handling data when running a business.

With cyber insurance, you can cover your business should specific cyber risks occur, including hacking, malware, Denial-of-Service attacks, accidental privacy breaches, as well as the lost income from interruption to your business and the cost of restoring the data.

It’s not uncommon for a medtech company to hold millions of records of very personally identifiable data — not only name, date of birth and contact details, but also HIV status, fertility information, treatment plans and other hugely personal information.

Because of this, the NHS often like to see tight encryption controls and appropriate cover.

Medical malpractice insurance

You may also need to consider medical malpractice. This is designed to cover liability for bodily injury arising from your tech product or service — whether that’s teleadvice, AI diagnostics, cyber events, system outages, diagnosis errors or faulty devices.

Even if you’re a software platform that doesn’t provide advice or treatment, but you facilitate the provision of care you might need to consider this cover when looking to go through the NHS tender process.

Not every medtech will need this insurance, it will depend on the product or services you’re offering, but it’s one worth discussing with your broker just in case.

Directors’ and officers' insurance

The final insurance you might want to consider is directors’ and officers’ (D&O) insurance, also known as management liability insurance. It’s designed to protect entrepreneurs from the risks associated with running a business.

It can reimburse defence costs incurred by board members, managers or employees in defending claims made against them by third parties for alleged wrongdoing.

D&O cover is available for businesses of any size, whether you’re a small startup or a large organisation, and may be one that NHS contracts could require.

What you can do to save

As a medtech looking to win a contract with the NHS, you might not always have the funds to cover the insurance limits required — especially when you won’t be getting paid immediately.

You’ll likely have to have your cover in place before you can win a contract, and you may have to wait months before payment from the contract comes through.

So what can you do to save a little? The number one tip is to work with your broker. A specialist medtech broker will have brokered policies for companies in a similar situation to yours. They’ll be well versed in where you could save.

It’s important to remember that you can always push back on limit requests imposed by the NHS. This is especially true if you can provide regulatory confirmation that your product is credible — say if your AI detection software has an efficacy rate above a certain percentage.

With a skilled broker by your side, you can negotiate your limits across the board, saving you time and money for the things that matter — growing your medtech business.

Interested in learning more about medtech insurance? Drop us an email and we’ll send you a webinar recording detailing everything you need to know.