Understanding Medical Indemnity Insurance In Australia
Medical indemnity insurers provide specialised professional indemnity insurance for doctors in Australia. They may also provide additional support services, such as 24/7 medico legal advice to highly experienced medical lawyers for doctors needing advice regarding their legal obligations and potential liabilities in any given situation.
All medical indemnity insurers in Australia must meet the minimum product standards prescribed in the Commonwealth Medical Indemnity (Prudential Supervision and Product Standards) Act 2003. There are five national medical indemnity insurers for doctors, all listed on the Department of Health website:
- Avant
- Berkshire Hathaway Specialty Insurance (distributed by Tego Insurance)
- MDA National
- Medical Insurance Group Australia (MIGA)
- Medical Indemnity Protection Society (MIPS)
What is medical indemnity insurance?
Medical indemnity is specialised insurance that is designed to provide cover to protect medical practitioners and other health practitioners in the event of an adverse incident. This can manifest in a number of ways including complaints about a medical practitioner’s behaviour or conduct including AHPRA complaints, coronial inquiries, Medicare audits and civil claims brought by patients. In Australia there are over 104,000 medical doctors and specialists. They must abide by a combination of national legislation, guidelines and codes of conduct. This includes the registration with a national board that sets out mandatory registration requirements, obligations of practice and insurance requirements. The Medical Board of Australia is responsible for regulating medical practitioners in Australia which also sets out the indemnity insurance requirements that comply with the Board’s registration standards for professional indemnity insurance.
Why do I need medical indemnity insurance?
Under the Australian National Law, all practising medical practitioners must be insured or otherwise indemnified for their entire scope of practice, whether via their employer’s indemnity arrangements or through their own medical indemnity insurer. This means it is mandatory for all doctors in private practice to have their own personal practitioner indemnity insurance. It is also a requirement for registration with AHPRA.
If your insurance or indemnity arrangements specifically exclude any aspect of practice you must not practise in that area. If you discover you do not have appropriate professional indemnity insurance arrangements in place, you are obliged to notify the Medical Board of this within 7 days.
Professional indemnity insurance generally will not cover your practice entity or employees, and a separate policy will be required for this. Read more about the benefits of medical indemnity insurance.
Choosing The Right Indemnity Insurance
When choosing a medical indemnity insurer, it’s important to remember not all policies are the same, and not all premiums are the same. Further, just because you have been with one insurer for a long time does not mean they are necessarily the best insurer for you. You are not obliged to stay with the same insurer, even if they have previously assisted you, and you are entitled to evaluate your options and consider other insurers at any time.
Policies
All medical indemnity insurance policies cover personal liabilities that might arise out of your provision of healthcare (including legal costs) by way of civil claims (that is, claims in medical negligence), and to a more variable extent, non-civil claims (such as coronial inquests, professional or disciplinary investigations, employment disputes – namely, anything other than requests for compensation).
Medical Indemnity Insurance In Australia
All medical insurance policies in Australia typically provide $20 million cover, however different policies apply different sub-limits to non-civil claims – meaning that specific cover will vary between policies. Some policies, not all, also include cover for exposures such as costs towards protecting your reputation (eg. in the event of adverse social media) and pursuing or defending defamation claims, Medicare audits, tax audits, employment disputes, as well as cover for statutory penalties (such as privacy breaches) and loss of income if you are required to attend court.
Be aware that some policies impose excesses/deductibles in certain circumstances which must be paid if assistance is required under your policy. Some medical indemnity insurers cover the treatment of public hospital patients if you are not otherwise indemnified. If you provide any medical services overseas, even in the form or teaching or lecturing, you should check with your insurer if you are covered.
Medical indemnity insurance in Australia is provided on a ‘claims made’ basis, which means you are required to notify your insurer as soon as you become aware of a claim (or of circumstances which a reasonable person would expect may result in a claim). Any claims made under one policy will continue to be covered by that policy even if you switch insurers.
It is also a requirement that your insurance includes adequate retroactive cover for all prior practice in Australia, so it is important you check the retroactive date under your policy (also known as “tail cover”).
Insurance Premiums
Premiums are generally assessed by the doctor’s state of practice, specialisation, claims history and billings band. Not all medical indemnity insurers adopt the same pricing approach and some will specifically assess your premium in accordance with your individual risk profile including actual gross private billings and sub-specialty areas. Some insurers require you to report any increase in income during a policy period (particularly those that adopt a billing band method) and reserve the right to seek additional premium retrospectively.
Some insurers offer significant discounts to reward compliance with certain accreditation standards or to assist doctors who are new to private practice. Given the differences in premiums and policies, you may wish to engage an insurance broker who can offer independent advice as to which product is best for you. If you find an insurer that better suits your needs it is possible to switch and your broker can advise you on this also. Your choice of medical indemnity insurer may potentially impact your livelihood, reputation, and savings, so it is in your best interests to investigate your options and find the best policy that suits your individual needs.
What is the cost of medical indemnity insurance in Australia?
The cost of medical indemnity insurance can differ between different medical indemnity insurance companies. In general, indemnity premiums across the sector are calculated by looking at historical claims data, actuarial information, underwriting trends and individual claims and risk factors based on the specific doctor or sub-specialty in which they practice. Some medical indemnity insurers offer a “one size fits all” approach to premiums based on billing bands, while others adopt a more individualised risk profiling approach and take other factors into account such as actual income (rather than billing bands), location of practice, experience and sub-specialty areas of work. Medical practitioners commonly sign up to an insurer early in their career, without ever thinking about shopping around or considering their options. Healthy competition has improved so many industries and it is no different in the healthcare space. With some new entrants over the last 8 years, medical professionals now have additional transparency, choice and customer care when it comes to their medical indemnity insurance. One of the big factors impacting medical indemnity insurance is social inflation which is used to describe the rising costs of insurance claims resulting from increasing litigation and costs.
Tego Has You Covered
Medical practitioners will encounter different exposures and challenges throughout their career. How these risks are identified and managed can be the ultimate difference between success and failure.
Our deep understanding and experience in healthcare risk enables us to provide flexible, comprehensive and compelling solutions to one of Australia’s biggest industry growth sectors. Our nimble approach and specialist healthcare knowledge allows us to offer enhanced and bespoke solutions to help you navigate emerging risks in healthcare. Tego is the trusted choice by specialists and practices for medical indemnity insurance in Australia. We cover a wide range of medical specialists and healthcare organisations including medical practitioners, private hospitals, specialist suites, allied health and aged & community care organisations. Request a quote today or call our friendly team at 1300 834 683.
This publication is general in nature and is not comprehensive or constitute legal or medical advice. You should seek legal, medical or other professional advice before relying on any content, and practice proper clinical decision making with regard to individual circumstances. Persons implementing any recommendations contained in this publication must exercise their own independent skill or judgment or seek appropriate professional advice relevant to their own particular practice. Compliance with any recommendations will not in any way guarantee discharge of the duty of care owed to patients and others coming into contact with the health professional or practice. Tego Insurance Pty Ltd is not responsible to you or anyone else for any loss suffered in connection with the use of this information.