Mid-market insurance

Insurance for private hospitals and clinics

Reviewed by the Apex broking team · Last reviewed 2026-11-06

Private hospital and clinic insurance is the programme of medical malpractice, liability, property, business interruption, cyber and directors' cover held by an independent hospital or day-case provider. It matters because the hospital can be sued for its own clinical systems even where consultants carry their own indemnity.

Part of: Care home insurance

In short

An independent hospital or day-case clinic usually needs entity medical malpractice cover for its nurses, theatre teams, resident doctors and systems, alongside employers' and public liability, property and engineering cover for theatres and specialist equipment, business interruption, cyber, and directors' and officers' insurance. Consultants with practising privileges normally hold their own indemnity, and regulated professionals must have indemnity as a condition of registration, but the hospital should verify it rather than rely on it. Surgery, diagnostics and treatment are CQC regulated activities in England.

What insurance does a private hospital or clinic need?

An independent hospital or day-case clinic, whether a single site or a group, usually holds a combined liability programme with an entity medical malpractice section at its centre, plus employers' liability and public liability. Property and engineering cover protect buildings, theatres, imaging and sterile services. Business interruption, cyber and directors' and officers' insurance complete the core programme.

The defining feature of the sector is the split between the hospital and the consultants who treat patients there. In many independent hospitals, consultants practise under practising privileges and hold their own indemnity, while the hospital employs or engages nursing, theatre, pharmacy and resident medical staff. A claim often names both, and the outcome depends on who did what and on the contracts between them.

The property side is also more specialised than a typical commercial building. Theatres depend on air handling, medical gases, sterile services and uninterrupted power, while imaging suites, endoscopy and lasers carry high replacement values and long lead times. Some equipment is leased or provided under managed service agreements that set their own insurance obligations. A fault in one plant room can stop surgery across the site, so engineering cover and business interruption need to be designed around those dependencies rather than the building alone.

Ownership structure matters as well. Groups backed by private equity or bank lending often face covenants requiring specific insurance, and a sale or refinancing usually triggers due diligence on the malpractice history and D&O run-off.

For broader context on clinical indemnity see healthcare and medico-legal PI and medical consultants' PI.

Consultant indemnity and the rules that apply

The Health Care and Associated Professions (Indemnity Arrangements) Order 2014 made appropriate insurance or indemnity a requirement for practising regulated health professionals, including doctors, nurses and professions regulated by the HCPC. That protects the individual. It does not protect the hospital, which can still face claims about its own staff, equipment, infection control, consent processes, escalation and the decision to grant or keep practising privileges.

Rule or issue	What it means	Insurance angle
Schedule 1, 2014 Regulations	Surgical procedures, diagnostic and screening procedures and treatment of disease, disorder or injury are regulated activities	CQC registration is a precondition of trading; operating without it is an offence under section 10 of the 2008 Act
Regulations 12, 17 and 19	Safe care and treatment, good governance, and fit and proper persons employed	Governance of practising privileges is a common underwriting question
Regulation 20, duty of candour	Openness with patients after notifiable safety incidents	Disclosure must sit alongside insurer notification conditions
IR(ME)R 2017	Patient radiation protection, enforced by CQC in England	Imaging and theatre fluoroscopy incidents can lead to claims and investigations
Consultant indemnity	Many consultants hold discretionary indemnity from a medical defence organisation or an insurance policy	The hospital should check type, limits and scope for the procedures performed on site

Wales, Scotland and Northern Ireland have their own regulators for independent healthcare.

Main exposures and the cover that usually responds

Exposure	Cover that usually responds	Points to check
Nursing, theatre, pharmacy or resident doctor error	Entity medical malpractice	Limit per claim and in the aggregate; cover for NHS-funded patients
Claims arising from a consultant whose indemnity fails	Entity malpractice, if extended	Whether the policy excludes acts of independent consultants
Fire, flood or utility failure closing theatres	Property damage and business interruption	Specialist equipment values and an adequate indemnity period
Breakdown of scanners, sterilisers, air handling or medical gas plant	Engineering breakdown and inspection	Statutory inspections and breakdown-triggered BI
Staff injury, sharps and manual handling	Employers' liability	At least £5m under regulation 3 of the 1998 Regulations
Visitor and patient slips and falls	Public liability	How premises claims are split from clinical claims
Ransomware cancelling lists, patient data breach	Cyber	Lost income, restoration, Information Commission (formerly the ICO) response
Regulatory investigations, inquiries, investor and lender disputes	Directors' and officers'	Investigation costs, entity cover and run-off on a sale
Patient transport and courier vehicles	Motor fleet	Specimens and medicines in transit

Illustrative examples

These examples are illustrative and not based on any real provider or claim.

Post-operative deterioration: a day-case patient deteriorates overnight and escalation to the consultant is delayed. The claim names the consultant and the hospital. The hospital's malpractice section would usually respond to allegations about its nursing and escalation, subject to the policy terms; the consultant's indemnifier handles the surgical allegations.
Indemnity gap: a consultant's indemnity is found not to cover a procedure they carried out at the hospital. Claimants pursue the hospital, arguing it should have checked. Whether the entity policy responds depends on its treatment of independent practitioners.
Theatre shutdown: an air handling failure closes two theatres for three weeks. Without breakdown-triggered business interruption, lost NHS-funded and private income may be uninsured.

Common mistakes and misunderstandings

Relying on consultants' indemnity alone. It protects the consultant, may be discretionary, and may not cover every procedure or the hospital's own failings.
Assuming NHS-funded patients are covered by NHS schemes. Check what the contract says; independent providers usually need their own cover for NHS-funded work.
Under-insuring specialist equipment. Replacement values, installation and shielding costs move quickly. See rebuild valuations.
Short indemnity periods. Rebuilding, re-equipping and recommissioning theatres can take longer than a standard 12 months. See choosing an indemnity period.

What underwriters usually want to see

Bed numbers, theatres, specialties, case mix and annual activity split between private, insured and NHS-funded patients.
Practising privileges policy: how indemnity, scope of practice, appraisal and outcomes are checked, and how often.
Clinical governance: incident reporting, mortality and morbidity review, infection control and consent processes.
Resident medical officer and out-of-hours cover, critical care arrangements and transfer agreements.
CQC ratings, any enforcement, and five years of claims and serious incidents.
Equipment register, maintenance contracts, business continuity plans and cyber controls.

When to review your programme

Review cover when you open theatres or sites, add specialties such as orthopaedics or cosmetic surgery, expand NHS-funded activity, buy major equipment, change ownership or refinance, or after a serious incident or regulatory finding. Each can change malpractice limits, sums insured, D&O terms and contract insurance requirements.

An insurance programme review tests the joins between entity malpractice, consultant indemnity, engineering and BI. Landlords of hospital premises should see insurance for landlords of healthcare property. Related pages: care home insurance, children's homes insurance, diagnostic imaging centres and aesthetic clinics.

Apex arranges insurance for private hospitals and clinics; a broker reads every enquiry.

Sources

Frequently asked

Do private hospitals need malpractice cover if consultants have their own?

Usually yes. Consultant indemnity protects the consultant. The hospital can be sued for the acts of its own nurses, theatre staff and resident doctors, and for system failures such as poor escalation, infection control or equipment problems. Entity malpractice cover is designed for those claims, subject to its terms.

Are consultants legally required to have indemnity?

Yes. The Health Care and Associated Professions (Indemnity Arrangements) Order 2014 made appropriate insurance or indemnity a requirement for practising regulated health professionals, including doctors. Hospitals usually also require evidence of indemnity as a condition of practising privileges and check it periodically.

Does insurance cover NHS patients treated in an independent hospital?

It can, but the programme must be arranged for it. NHS contracts commonly set insurance and indemnity requirements, and independent providers usually need their own cover for that activity. Check the contract terms against your malpractice and liability limits before taking on new NHS-funded work.

Does business interruption cover cancelled operating lists?

Only if the cause is insured. Lists cancelled after fire, flood or other insured damage are usually covered under business interruption. Cancellations caused by equipment breakdown or a cyber attack generally need engineering or cyber cover with a business interruption extension. Staff shortages and loss of referrals are not normally insured.

What D&O risks do private hospital directors face?

Directors can face regulatory investigations, inquiries following patient safety failures, claims from investors or lenders, and employment-related allegations. Directors' and officers' insurance can meet defence and investigation costs, subject to the policy terms. Fines and penalties are often uninsurable.

Mid-sized business? Have your programme reviewed

Send us your current schedules or renewal pack and we will review the whole programme and tell you plainly what to keep and what to change. No fee and no obligation. Or call 0117 325 0027.

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Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information, not advice on your individual circumstances, and it does not guarantee that cover will be available or on what terms.