Major Changes To Universal Cover Obligations And The Implications For Medical Indemnity Insurers And Health Professionals

What changes have been made to Universal Cover Obligations?

In July 2020, Australia’s Department of Health specified that all medical indemnity insurers have universal cover obligations under legislation. They approved a new bill called the Medical and Midwife Indemnity Legislation Amendment Bill 2019.

The Bill amends the:

  • Medical Indemnity Act 2002.
  • Medical Indemnity (Prudential Supervision and Product Standards) Act 2003 (MI(PS&PS) Act)
  • Midwife Professional Indemnity (Commonwealth Contribution) Scheme Act 2010.

What are the implications for health professionals?

The universal cover obligation demands that every medical indemnity insurer must offer professional indemnity coverage to any healthcare practitioner who seeks it.

It also requires that medical indemnity insurers cannot refuse a healthcare practitioner medical indemnity cover, except for certain specific reasons.

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When can a medical indemnity insurer refuse medical indemnity cover?

It is important to understand under what circumstances a medical indemnity insurer can refuse to provide medical professional indemnity cover.

Here are some instances:

There is an insurance contract between the practitioner and the insurer and:

  • the practitioner failed to comply with the duty of the utmost good faith or the duty of disclosure (within the meaning of the Insurance Contracts Act 1984).
  • the practitioner made a misrepresentation to the insurer during the negotiations for the contract but before it was entered into.
  • the practitioner failed to comply with a provision of the contract, including a provision with respect to payment of the premium.
  • the practitioner made a fraudulent claim under the contract.
  • the practitioner places the public at risk of substantial harm in the practitioner’s private medical practice because the practitioner has an impairment (within the meaning of the Health Practitioner Regulation National Law).
  • the practitioner’s private medical practice poses an unreasonable risk of substantial harm to the public or patients.
  • the practitioner poses an unreasonable risk of harm to members of the insurer’s staff because of persistent threatening or abusive behaviour towards members of the insurer’s staff.
  • the practitioner has persistently failed to comply with reasonable risk management requirements of the insurer.

Currently, section 14 of the Medical Indemnity Rules 2020 provides- two additional circumstances in which cover may be refused.

The medical practitioner:

  • has practised without being registered or licensed as a medical practitioner under a State or Territory law that provides for the registration or licensing of medical practitioners; or
  • is practising in breach of a limit (however described) on the registration or licensing of the practitioner under a State or Territory law that provides for the registration or licensing of medical practitioners.

Tego is an advocate for stability and affordability of indemnity premiums for medical practitioners

For many years, Tego has provided medical practitioners in Australia medical indemnity insurance, medical malpractice insurance, doctors indemnity insurance, medical practice insurance, GP medical indemnity insurance, and more. Known as one of the leading Australian medical indemnity insurance providers, our experts provide 24/7 medico-legal advice and support to guide health practitioners.

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This publication is general in nature and is not comprehensive or constitutes 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.

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