Medical Indemnity Insurance (also referred to as Doctors Indemnity Insurance, Medical Professional Indemnity Insurance and GP Medical Indemnity Insurance) refers to insurance which covers a ‘breach of professional duty.’ All professional service providers are legally responsible to their clients; from lawyers providing legal advice, accountants providing taxation advice, or a health clinic or a physician treating a patient.
For registered healthcare professionals (doctors, dentists, optometrists, nurses, etc.), medical indemnity insurance has two core elements of cover:
- Civil claims – the policy covers the practitioner’s legal liability arising from demands for compensation alleging a breach of professional duty (e.g. errors during treatment of a patient). Cover typically includes legal defence costs to defend or settle the claim and the compensation awarded to the plaintiff. Doctors with a medical indemnity insurance policy are usually insured for $20 million any one claim and in total for the policy year.
- Non-civil matters – the policy will usually also extend to cover the costs of legal representation for disciplinary (eg. a medical board matter), and coronial inquiries. Some insurers further extend cover to matters such as VMO and employment disputes, medicare and health fund audits. The policy usually has a sub-limit and this varies widely by insurer. The sub-limit can be as low as $100,000 but most insurers provide $250,000 up to $2 million.
Is there a ‘Rolls Royce’ Medical Indemnity Policy?
Policy coverage and amounts vary considerably by insurer and there is no single policy that is ‘better’ than any other policy in every respect. On top of this, the practitioner’s individual circumstances and needs will mean looking at policy coverage against your needs and practice risks. Some other considerations outside of what’s in the policy include:
- Quality of claims service and the philosophy of the insurer
- Experience of in-house and panel legal firms
- History of the insurer’s ability to provide stability of pricing
- If the insurer provides any discounts for getting started in private practice, loyalty, or any other discount that may be relevant
- Access to medico-legal advice
- Other benefits provided outside of the insurance policy
Medical Indemnity Insurance in Australia is one of the most complex areas of general insurance and is often the most misunderstood. There is a raft of legislation which is designed to protect registered healthcare practitioners (and patient’s rights to seek compensation when mistakes occur). Contact a Medical Indemnity Insurance advisor to find out more.
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.
Eric is the CEO of Tego, an insurance agency offering specialist indemnity insurance solutions for the healthcare and life sciences sectors. His qualifications include a bachelor’s degree in business and law, a master’s degree from UNSW in law and management and an MBA from the AGSM.