ALL MED PRO

PROTECTING YOU AND YOUR REPUTATION

WHO NEEDS MEDICAL INDEMNITY?

Any person, or company, that provides a healthcare service.

Historically, surgeons and other medical professionals have purchased indemnity cover via the medical defence organisations (MDOs) or their relevant professional associations.

However it is increasingly common to see practitioners sourcing indemnity cover from leading insurance providers.

Many of the larger hospitals now insist on insurance-based indemnity for their individual practitioners. Insurance provides a contract-certain indemnity cover and, therefore, a higher level of protection to the hospital, practitioner and patient than the discretionary benefit of the medical defence organisations.

It is important to remember that companies are vicariously liable for the actions of their employees. If a claim is made against an individual their employer can also be held accountable and liable for any claim.

Medical indemnity insurance policies are “claims made”, legal liability policies. They can usually be extended to include the following: £ Errors and Omissions insurance £ Dishonesty of Employees £ Breach of Confidentially £ Loss of documents £ Public Liability

CLAIMS OCCURRENCE OR CLAIMS MADE?

Indemnity on an “occurrence basis” means that the cover responds to claims arising from treatment during the period of the cover – irrespective of when the subsequent claim might occur – which could be several years after the treatment. This is the type of indemnity provided by the Defence Unions.

“Claims made” policies are the most usual type of policy provided by insurers. This means that the policy in force when a claim is made will deal with the issue. The potential downside of claims made indemnity is that some policies do not provide cover after the individual retires. Following retirement, an individual can still be held legally liable for any complaints/claims that arise from treatment they provided before their retirement. Some policies provide run-off cover which is ongoing retrospective cover for a number of years and this usually covers the individual following their retirement or death.

In the absence of automatic run-off cover applying to the policy a separate run-off policy will be required upon retirement, which may need to be renewed for many years after retirement in order to provide the protection required.

It is important to remember that “ companies are vicariously liable for the

actions of their employees. If a claim is made against an individual their employer can also be held accountable and liable for any claim.

”

WHAT IS A RETRO-ACTIVE DATE?

Because medical indemnity insurance policies are on a “claims made” basis the policy needs to define the earliest date for which cover applies to treatments provided by the policyholder. In the first year of insurance cover the retro-active date will usually be the inception (starting) date of the policy. In future years - irrespective of any change in insurer, but providing that continuous insurance cover has been maintained - the retroactive date should still be the date that insurance cover was first taken out.

WHAT SORT OF CLAIMS CAN BE MADE? People working in healthcare have a duty of care towards their patients but unfortunately it is inevitable that sometimes things go wrong - or are alleged to have gone wrong. Below are some examples of claims that would fall under a medical indemnity insurance policy.

1. A patient made a claim as he felt the surgeon failed to diagnose or adequately treat colonic polyps. The patient alleged that he had undergone unnecessary colonoscopies. As a result the claim was settled at a cost of £91,000 including compensation and legal costs.

2. A patient who was assaulted by her partner suffering damage to her face was referred to a plastic surgeon for a rhinoplasty procedure. The patient believed that the surgery was more extensive than first advised. This led to allegations around the levels of informed consent. As a result the claim was settled at a cost of £121,205 including compensation and legal costs.

DISCRETIONARY COVER (MEDICAL DEFENCE ORGANISATIONS)

In December 2010 the MDU issued a press release saying ‘if there is no legal entitlement to indemnity, as is the case with discretionary indemnity, then there is a risk that deserving patients may go uncompensated.’ They went on to add, ‘You are not allowed to insure your house or home with discretionary indemnity and it is unthinkable that discretionary indemnity remains acceptable for clinical negligence.’ However in 2013 they switched back to providing indemnity on a discretionary basis…

Discretionary cover holds itself up as being flexible in the manner it can support someone, which is true, but then it is very important look at the word “discretionary”.

There is no legal obligation to provide support and many will be heard to say, ‘of course they will provide support’. Unfortunately, this is not always true. There have been many occasions where support has not been provided; and the MDU point to some instances in their 2010 press release. Furthermore they don’t have to tell the member the reasons for declining to assist.

Here lies the potential flaw in the discretionary indemnity model. Members have little or no rights of appeal if they are refused indemnity cover following a claim or membership acceptance as decisions are made by council members on a discretionary basis.

there is no legal entitlement “toIfindemnity, as is the case with

discretionary indemnity, then there is a risk that deserving patients may go uncompensated.

”

AN INSURANCE POLICY: CONTRACT-CERTAIN INSURANCE COVER

Medical indemnity insurance cover is obtained through specialists – brokers and insurers.

Most policies are obtained in the traditional way where a proposal form – obtaining all relevant information relating the proposer’s activities and history – is completed and submitted by specialist brokers to all potentially interested insurers. The offer of cover will provide all relevant documents; the contract – usually called a policy – and a schedule confirming the dates of cover, limits of indemnity etc. The documents set out the terms and conditions of the cover, detailing what is and is not covered, and what obligations exist on the part of the practitioner and the insurer. This is a legally enforceable contract.

The insurer and insurance broker are regulated by the Financial Conduct Authority (FCA) which requires that: £ The practitioner (as a customer) is treated fairly £ The insurer must have adequate funds to meet all known liabilities and potential liabilities £ A formal complaints service must be available £ Access to the Financial Ombudsman Service Scheme is available in the case of unresolved disagreement between customer and insurer £ Access to the Financial Services Compensation Scheme is available if an insurer should fail (which would be a very rare event, not least because of the level of regulation by the FCA on all those involved). £ Policies underwritten at Lloyds of London have the security of the Lloyds system in respect to any potential disputes.

Practitioners seeking insurance cover can, with the assistance of an independent insurance broker (who works independently of all insurers), take an informed view about the level of indemnity cover they purchase and the level of the premium to be paid (akin to the choices of cover, premium and excess for all other forms of insurance). Expert guidance from an insurance broker who has the relevant expertise is needed to help understand and negotiate effectively with insurers, including the scope of indemnity cover, any exclusions, the contract terms and their implications. The sums payable under the policy are often limited, as determined by the terms, and usually reflect the context in which the practitioner operates.

DIFFERENCES BETWEEN INSURANCE CONTRACTS AND THE MDO’S

Covers

Insurance

MDU/DDU

MPS/MDDUS

Worldwide Good Samaritan Acts

P

Discretionary

Discretionary

Clinical Negligence Claims

P

Discretionary

Discretionary

Run Off Cover

P

Discretionary

Discretionary

Cover for Medico Legal Reports

P

Discretionary

Discretionary

24 Hour Medico Legal Helpline?

P

P

P

Legally binding contract of cover

P

X

X

SUMMARY The basis of indemnity between both the MDO’s and insurers is similar - but with some fundamental differences - as described above.

The insurance market is a competitive one – albeit in this very specialist field there are relatively few insurers who participate. However the insurer’s underwriters inspect each risk in order to assess the potential for claims – not least in view of any past claims from the practitioner. Insurers will apply premiums and policy excesses above the norm in order to mitigate the potential for future claims from poor experience or poor claims history.

In other words insurers will not charge a flat rate but a premium commensurate with the degree of risk involved, taking into account all factors. However with a competitive market-place the practitioner has a choice of different underwriters who will compete with each other for the practitioner’s business – keeping the costs competitive.

Some practitioners have no option but to seek cover in the insurance market, usually because of claims history or disciplinary matters, although usually cover will be found for them to enable them to continue to practice. If the practitioner is then claim-free for several years they will find their premiums reducing towards the levels of other claim-free practitioners.

All Med Pro is a specialist provider of Insurance to the medical profession. The founding directors have over 85 years combined experience in Insurance Broking.

All Med Pro provides a range of niche professional medical indemnity insurance policies to suit the risks you face in your particular profession. Whether you are a surgeon, GP, doctor, dentist, paramedic, forensic medical examiner, osteopath or chiropractor our policies provide cover against allegations or claims of professional negligence.

We can also provide very competitive quotations for foreign nationals new to the UK as well as individuals who have been refused or declined cover by the likes of the defence unions (MDU, MPS, MDDUS).

We are increasingly seeing clients who have been refused cover elsewhere. We will work with you to ensure you are receiving the very best in respect of insurance cover and premium. We do have a number of indemnity markets available to us so please do not hesitate in contacting us.

MEDICO LEGAL ADVICE We not only provide you with indemnity cover but also provide each client of our with full medico legal cover which will include the following as standard: £ 24/7 Medico-legal Helpline £ Defence cost - including GMC enquiries arising from non-clinical matters £ Fitness to Practice and Disciplinary representation

REQUIRE A MEDICAL INDEMNITY INSURANCE QUOTE? If you require information in respect of your profession or circumstances please contact us:

01793 820100

info@allmed.co.uk

www.allmed.co.uk

All Med Pro is a trading style of All Medical Professionals Limited who are authorised and regulated by the Financial Conduct Authority Number: 309653.