As a doctor within the UK, it is a mandatory GMC requirement to arrange Medical Indemnity coverage:
"You must make sure that you have adequate and appropriate insurance or indemnity arrangements in place covering the full scope of your medical practice in the UK."
Frustratingly, the GMC does not specify how much or what type of Indemnity is required but instead state:
"The cover you need is very much dependent on your circumstances and must be in place by the time you begin to practise."
This article explores what Medical Indemnity is, why it's required, and what types of indemnity options are available to you (within different sectors).
What is Medical Indemnity or Medical Malpractice Insurance?
Medical Indemnity (often referred to as Medical Malpractice insurance) is a particular type of professional liability coverage that protects medical professionals against any liability (or allegations) arising from the treatments, advice, or care that has been provided to patients that ultimately results in a patient's injury, death, or mental anguish. This can include (but is not limited to):
- Misdiagnosis or failure to diagnose
- Incorrect treatments
- Prescriptions errors
- Surgical errors
Medical Malpractice claims and the costs of representation (through defence) has been dramatically rising over the last ten years, making litigation a significant consideration within the sector.
Even in circumstances of a successful defence of a case, only a minimal number of legal systems allow defence costs to be recouped, leaving the defensive party (healthcare organisations and medical professionals) exposed to the financial loss. This is fuelled further by the no-win, no-fee culture that currently exists in the claim environment.
How much and what type of Indemnity do you need?
For understanding purposes, we will go through 2 of the main sectors for which Indemnity is required, at variable levels:
- Medical Professionals within the NHS (including GP's)
- Medical Professionals within Private Practice.
Within the NHS
The NHS is financially responsible for any negligence-related claims or incidents (on behalf of their employees) through a structure called the state-backed Indemnity scheme.
Medical professionals must understand that the Indemnity through the NHS is only for the duties performed on behalf of the NHS. In some instances, care or duties may extend outside of the NHS's remit, so medical professionals need to arrange separate medical Indemnity for these circumstances.
The NHS does not, however, provide cover for:
- GMC investigations
- Coroners Inquests
- Good Samaritan acts
- Criminal Investigations
- General medicolegal advice
Within Private Practice
For private practice, medical professionals will need to arrange complete Indemnity that includes coverage for claims, notifications, and complainants, as well as other supplementary coverages (where and if required).
If the medical professionals are working on behalf of private practices, hospitals, and clinics, they may require minimums levels of cover. This may include (but is not limited to):
- A minimum limit of Indemnity (if a policy is arranged through an insurer).
- Certain criteria of cover, e.g., a telemedical extension of cover.
- Specific extensions of cover, e.g., abuse, patient recall.
Indemnity for private practice is normally arranged through two routes:
- Medical Defence Organisations.
- Commercial Insurers (via specialist insurance brokers).
Medical Defence Organisations (Occurrence based coverage)
Medical Defence organisations (MDO's) are not-for-profit organisations that provide medical Indemnity and medicolegal advice to subscribing members.
The following points highlight some of the coverage aspects to be taken into consideration with Medical Defence Organisations.
- MDO's provide Indemnity on a discretionary basis – legal and financial support is provided at the discretion of the MDO and is not backed by an insurance contract between the healthcare professional and the MDO.
- MDO's provide Indemnity on an occurrence form, meaning that incidents during the policy period are covered regardless of when the negligence claim is made.
- Since policy form is on an occurrence basis, there is no requirement to arrange Run-Off cover if the cover is stopped.
- In the event of a claim or when providing support to members, MDO's do not require members to pay an excess.
- Medical Defence Organisations are internally regulated only and are not regulated by any external bodies.
- MDO's do not provide any supplementary coverages or extensions.
Commercial Insurers (via specialist insurance brokers)
There are a host of commercial insurers that offer medical Indemnity insurance. Indemnity policies through commercial insurers must be arranged through specialist brokers who should have a robust understanding of the market, policies, and coverages.
The broker works on behalf of their medical professionals and arranges bespoke coverages through insurers that meet the specific requirements of their clients. It is the broker's duty to highlight policy specifics, exclusions, and critical information's to the medical professionals.
The following points highlight some of the coverage aspects to be taken into consideration with insurers:
- All insurance policies are contract-certain – insurer is contractually obliged to compensate for claims, representation, and support by making a money payment as per the terms and conditions outlined in the policy.
- Claims made cover, covers incidents that occur during the policy period, provided that the claim is made and reported prior to the end of this period. Once the policy has lapsed, no cover will be offered in respect of new claims not reported during the policy or membership period.
- Run-off cover is necessary to remain protected against any further accumulated claims but not reported during the active policy period.
- Regulated and overseen by the Financial Conduct Authority (FCA) & the Prudential Regulatory Authority (PRA).
- Bound by "treating the client fairly" (TCF).
- FSCS backed insurance contracts.
- Inclusive additional extensions of cover (varies from insurer to insurer) e.g. Public Liability Cover, Libel & Slander cover, Reputational Damage cover, Defamation cover, Tax Protection cover, Criminal Proceedings cover etc.
If you are unsure what kind of policy you have and are worried you may have accepted discretionary cover over contractual, get in touch with us today to answer any questions about your policy.
Please note that the information in this article is not intended to be used or relied upon as a replacement for legal or professional advice. Please make appropriate arrangements to check your policies thoroughly with your professional or legal representatives.