Most doctors and healthcare professionals understand that medical indemnity insurance is mandatory for registration in Australia. However, many view it simply as a compliance “tick-box” rather than a critical safety net for their livelihood.

The reality is that medical indemnity insurance is not just for catastrophic surgical errors. It is a daily shield against a wide range of professional challenges—from administrative complaints to complex legal battles.

In this guide, we break down the most common real-world scenarios that trigger indemnity claims in Australia and explain how your coverage works to protect your reputation and your practice.

Why Understanding Common Risks Matters

Even the best practitioners face complex situations

It is a common misconception that indemnity claims only happen to “bad” doctors. In reality, data confirms that notifications can arise from communication breakdowns, system errors, or even a patient’s unmet expectations, regardless of the clinical outcome.

According to the AHPRA Annual Report 2024–25, there were 13,327 notifications lodged against health practitioners last year—a 19% increase from the previous period. This underscores that risk is statistically rising for everyone, not just those in high-risk specialties.

Understanding these common pitfalls is the first step in prevention.

The Top Issues That Lead to Medical Indemnity Claims

While every case is unique, most indemnity claims in Australia fall into four distinct categories.

1. Misdiagnosis or Delayed Diagnosis

Diagnostic error remains one of the leading causes of medical negligence claims in Australia, particularly in General Practice and Emergency Medicine.

A recent perspective in the Medical Journal of Australia (MJA) estimated that approximately 140,000 diagnostic errors occur annually in Australia. The most common indemnity scenarios include:

  • Failure to diagnose cancer (delayed referral or biopsy).
  • Missed fractures in radiology or emergency settings.
  • Failure to recognise symptoms of acute events (e.g., meningitis or cardiac arrest).
patient symptoms and diagnosis chart

How Indemnity Applies: If a patient sues for damages alleging that a delay in treatment caused their condition to worsen, your insurer provides the legal defence and pays the compensation if negligence is proven.

2. Treatment or Procedural Complications

This category covers the “physical” aspect of medicine—when a procedure doesn’t go to plan.

  • Surgical errors: Damage to surrounding organs, nerve damage, or (rarely) wrong-site surgery.
  • Medication errors: Prescribing the wrong dose or failing to check for allergies.
  • Infection control breaches: Allegations that a patient contracted an infection due to poor practice hygiene.

Real-World Context: Even if a complication is a known risk of surgery, a patient may still claim that the procedure was performed negligently. Your insurer funds the expert medical opinions needed to prove that your technique met the standard of competent professional practice.

3. Communication or Consent Breakdowns (“Failure to Warn”)

Since the landmark Australian legal ruling in Wallace v Kam, the bar for “informed consent” has been raised. It is no longer enough to explain the common risks; doctors must warn patients of material risks that would be significant to that specific individual.

Common claims arise when:

  • A patient suffers a rare complication and says, “I would never have had the surgery if I knew this could happen.”
  • A cosmetic procedure result does not match the patient’s aesthetic expectations.
  • Post-operative care instructions were unclear, leading to a poor recovery.
medical practitioner reading consent form

4. Documentation and Record-Keeping Failures

Defending a claim often comes down to one thing: clinical notes. AHPRA notifications frequently cite inadequate record-keeping. If a patient alleges you failed to perform a test, and your notes are silent, the law often assumes the test was not done.

How Medical Indemnity Insurance Supports You in These Situations

When one of these challenges arises, your policy does far more than just “pay the bill” at the end. A comprehensive insurer like Tego steps in immediately.

Legal Defence and Claim Management

Medical negligence laws in Australia are complex. Your insurer appoints specialist medico-legal solicitors to manage the entire process, including:

  • Drafting responses to AHPRA or the Coroner.
  • Representing you in tribunal hearings.
  • Managing correspondence with the patient’s lawyers.

Advice and Support During Investigations

Many notifications do not result in a financial payout but can drag on for months, causing immense stress.

  • Medicare Audits: If you are audited for “inappropriate practice” regarding MBS item numbers, your policy may cover the legal costs of the audit.
  • Coronial Inquests: If a patient dies unexpectedly, you may be called to give evidence. Your insurer provides legal representation to ensure your rights are protected during the inquest.

Compensation and Settlement Coverage

If a claim is successful (or settled out of court to minimise risk), your insurance pays the:

  • Damages: The money awarded to the patient for pain, suffering, and economic loss.
  • Plaintiff’s Costs: The legal fees of the patient (which can often exceed the damages themselves).

How to Minimise Your Risk Exposure

While insurance is your safety net, prevention is your best strategy.

Proactive Steps Doctors Can Take

  1. Tighten Consent Protocols: Move beyond “signing the form.” Document the conversation about specific risks and the patient’s questions.
  2. Improve Follow-Up Systems: Many diagnostic claims arise from lost test results. Automate your recall systems to ensure no abnormal result is missed.
  3. Invest in Cyber Security: With the OAIC reporting that health service providers are the top sector for data breaches, ensure your practice data is encrypted. (Read more in our guide).

Working With Your Insurer to Manage Risk

Don’t wait for a claim letter to talk to your insurer. The best providers offer:

  • Medico-legal advisory lines: Call for advice before a difficult patient interaction escalates.
  • Risk education: CPD-accredited webinars on better record-keeping and communication.

How Tego Helps Protect Australian Healthcare Professionals

At Tego, we understand that modern medicine is unpredictable. We don’t just insure you against a payout; we partner with you to protect your reputation and your career longevity.

Why Australian doctors choose Tego:

  • 24/7 Medico-Legal Support: Access to senior legal experts when you need them most.
  • Broad Coverage: Protection that adapts to telehealth, private practice, and emerging treatment models.
  • Review your risk: We help you identify gaps in your cover before they become problems.

Are you confident your current cover reflects your actual risk profile?

Get a Quote or contact Tego to discuss a policy that works as hard as you do.

Important Information & Disclaimer

General Advice Warning General advice on this website has been prepared without taking into account your objectives, financial situation, or needs. Before acting on the advice, please consider its appropriateness to your personal circumstances. You should also consider our disclosure documents, which include our Financial Services Guide (FSG) and Product Disclosure Statements (PDS) for relevant products, before making any decision.

General Insurance Code of Practice We proudly support the General Insurance Code of Practice (the Code). The Code has been designed to raise customer service standards in the Australian insurance industry and protect the rights of policyholders. It is the general insurance industry’s promise to be open, fair, and honest in the way it deals with all its customers.

A copy of the General Insurance Code of Practice can be obtained from www.codeofpractice.com.au.