Under Australian law, all practising medical practitioners must hold insurance that provides cover for their entire scope of practice, whether via their employer’s indemnity arrangements or through their own Medical Indemnity insurer. This means it is mandatory for all doctors in private practice to have their own personal Medical Indemnity insurance. It is also a requirement for registration with AHPRA.
If your insurance or indemnity arrangements specifically exclude any aspect of practice you must not practice in that area. If you discover you do not have appropriate professional indemnity insurance arrangements in place, you are obliged to notify the Medical Board of this within 7 days.
Medical Indemnity insurance generally will not cover your practice entity or employees, and a separate policy will be required for this.
Medical Indemnity will only cover you in respect of the healthcare specialisations advised to the insurer. Please ensure that the healthcare specialisations listed are sufficient to include all of your present and past activities – regardless of whether you still offer such services.
The below list sets out the broad specialties of practice that can be covered under Medical Indemnity Insurance. The specialties are not prescriptive in that they do not set out specific medical procedures or services. However, each specialty category will cover treatment decisions made by the doctor in line with AHPRA guidelines, rules and regulations, their training colleges and any other credentialing authority.
- Bariatric surgery (includes work in the general surgery but also includes bariatric procedures)
- Cardiology – interventional (includes work in cardiology – non-interventional specialisation but also includes interventional procedures)
- Cardiology surgery
- Colorectal surger
- Cosmetic proceduralist (practitioners with general registration only that perform surgical cosmetic procedures)
- Emergency medicine
- Endocrine surgery
- General physician
- General practice – non-procedural (includes non-procedural work but no anaesthetic, cosmetics or obstetric work)
- General practice — minor cosmetics and skin cancer (includes work in the gp non-procedural category but also includes procedural work, regional anaesthetic, minor cosmetics but not surgical cosmetic procedures and no obstetrics)
- General practice — obstetrics (includes work in both the gp non-procedural and gp — minor cosmetics and skin cancer categories but also includes general anaesthetic, obstetrics but no surgical cosmetic procedures)
- General surgery (excludes any bariatric procedures)
- Geriatric medicine
- Gynaecology / IVF
- Hospital medical officer
- Immunology and allergy
- Infectious diseases
- Intensive care
- Nuclear medicine
- Obstetrics & Gynaecology
- Occupational medicine
- Ophthalmology – non-procedural (excludes any surgical procedures)
- Ophthalmology – procedural (includes work in the ophthalmology – non- procedural specialisation but also includes surgical procedures)
- Oral & maxillofacial surgery orthopaedic surgery (excludes any neck or spinal procedures)
- Orthopaedic surgery — incl. Spinal and neck (includes work in the orthopaedic surgery specialisation but also includes any neck or spinal procedures)
- Otolaryngology (surgery)
- Paediatric surgery paediatrics
- Pain management palliative care
- Plastic & reconstructive surgery (excludes any cosmetic procedures)
- Plastic, reconstructive and cosmetic surgery (includes work in the plastic & reconstructive surgery specialisation but also includes any cosmetic procedures)
- Public and community health
- Radiation oncology
- Rehabilitation respiratory medicine
- Rheumatology sports medicine surgical assisting
- Ultrasound – diagnostic
- Vascular surgery
Medical Indemnity policies are issued on a ‘Claims Made’ basis, which means that the policy will respond to:
- claims first made against you and reported to the Insurer during the Period of Insurance;
- any circumstances which you become aware of during the period of insurance, which could give rise to a future claim, provided you inform the Insurer in writing of such circumstance, as soon as practical, within the period of insurance.
This type of policy does not provide cover in relation to:
- events that occurred prior to the retroactive date of the policy (if such a date is specified);
- claims made after the expiry of the period of cover even though the event giving rise to the claim may have occurred during the period of cover;
- claims notified or arising out of facts or circumstances notified (or which ought reasonably to have been notified) under any previous policy;
- claims made, threatened or intimated against you prior to the commencement of the period of cover facts or circumstances which you first became aware of prior to the period of cover, and which you knew or ought reasonably to have known had the potential to give rise to a claim under this policy;
- claims arising out of circumstances noted on the proposal/application form for the current period of cover or on any previous proposal/application form.
Medical Indemnity insurance is a significant cost for most doctors, and up until recently the lack of any real choice has meant most doctors have had no option but to renew their policy every year without the ability to seek alternative quotations. In the current climate of disruption the status quo is being challenged in just about everything, especially in industries and products that have previously seen little change or competition. Medical indemnity insurance is a perfect example of this with a recent entrant to the market shaking up the system. Many Australian doctors have experienced significant savings on their medical indemnity insurance whilst receiving improved policy cover, simply by changing their medical indemnity provider
Not only is having Medical Indemnity insurance a legal requirement for doctors, but it also protects the doctors’ reputation if a dispute arises with a patient. This is why a comprehensive policy with a reputable insurer is vital. The Australian government is very protective of the medical indemnity insurance market and only allows approved insurers to issue policies. Currently only six insurers are approved to offer medical indemnity insurance and the policies they offer must meet strict requirements set out by government legislation. Though heavy regulation in this market is justifiable it has effectively limited any real competition and as a result there have been no new entrants for some time.
Recently of one of the world’s largest insurers Berkshire Hathaway moved into the Australian market after receiving approval from the government regulator. Bringing a wealth of experience in medical indemnity around the world Berkshire Hathaway were approved to become the sixth provider of medical indemnity insurance to doctors in Australia. The most interesting thing about this new player in the market is that they operate very differently to the existing players who are all Medical Defence Organisations (MDO’S), which are based on an outdated UK system. This brings a real point of difference to the market.
The medical defence funds have a unique insurance system and one of the overriding principles is to apply a flat rating structure to all doctors that fit within certain billing bands. This means most doctors operating in the same field will obtain similar premiums to others regardless of how experienced they are, whether they have prior complaints and without taking in to account other important risk factors.
Berkshire Hathaway will underwrite individual doctors on their own merit. They use a number of rating factors which allows them to offer greater flexibility and often significant savings. Being a new entrant to the market they are also quite nimble in comparison to the MDO’s which have over time shifted their focus from medical indemnity to other additional services. The conferences and ancillary services offered by these MDOs often result in unnecessarily high premiums for doctors.
More and more doctors are experiencing significant savings on their medical indemnity insurance with the help of Berkshire Hathaway and are realising these savings don’t compromise the integrity of their cover. Complete 4 quick questions and get an indication of how much you can save in just 24 hours.
The PSS was introduced in 2004, mainly to provide assistance to doctors experiencing high premiums for medical indemnity insurance. The government will contribute up to 60% towards the cost of the premium where the total cost of the doctor’s medical indemnity insurance exceeds 7.5% of gross earnings.
The PSS does also apply in certain other circumstances such as procedural GP’s practicing in a rural area, retirees from private practice that continue to practice in the public sector and doctors eligible for the Medical Indemnity Subsidy Scheme may also be able to receive the PSS.
The ‘trigger date’ for cover under medical indemnity insurance policies is the date the claim is first made against the doctor which may be years after the consultation. This means all doctors need to maintain cover for a period of time after they have ceased practising.
The Run off cover scheme (ROCS) run by the government provides free cover to doctors in various scenarios such as:
- Aged over 65 and permanently retired
- Under 65 but have not worked in private practice for 3 years
- Permanently disabled or the estate of a deceased doctor
- Currently on maternity leave
- Overseas doctors who practiced in Australia on a 422 / 457 visa and have left permanently
Most medical indemnity policies will provide the medical practitioner with $20 million of cover. In the event the medical practitioner has one or more claims that exceed the annual limit of $20 million then the ECS government scheme will contribute the amount above the insurance limit.
The HCCS was legislated in 2002 to strengthen the medical indemnity insurance available to doctors in Australia following the collapse of UMP, a large medical defence organisation. The scheme allows Medical Indemnity insurers to share 50% of the costs of certain claims with the Australian government.
The amount of a claim must exceed a threshold before it can be claimed under the HCCS. This amount has been set at $300,000 since 2004 but will be increasing to $500,000 from July 2018. A claim under the HCSS must relate to an incident occurring within Australia and arise from the practice of a medical profession. The HCSS does not apply to claims relating to public patients treated in a public hospital.
As a medical professional your reputation is important – why trust anyone but a specialist to protect it?
Medical Indemnity insurance is extremely complex and often confusing for anyone without specialist insurance knowledge. It should therefore be managed by a qualified insurance expert..
For many years Medical Defense Organizations (MDOs) have enjoyed a monopoly within the Australian Medical Indemnity insurance market, over time becoming complacent with their lack of competition. Due to a recent ground-breaking decision by the Australian government a new provider has entered the market giving doctors the option to use a broker when placing their Medical Indemnity insurance.
A qualified insurance broker is an industry expert who understands the complexities of insurance covers and the numerous options available. Such is their knowledge that they can even customise policies to best suit your needs. As a broker, their legal responsibility is to look after you, the client, rather than the insurance companies. With access to multiple insurers, they can often find you not only the best policy – but at the right price.
A professional broker will take time to understand your unique circumstances and talk you through both the risks you face and your insurance requirements. The service standards they offer you – and the protections in place to ensure you are treated in an open and honest way – are set out in the Insurance Brokers Code of Practice.
There are advantages of appointing a broker to manage your Medical Indemnity insurance. Brokers ensure that your policy is underwritten based on your individual experience so that you are not penalized by the claims incurred by other doctors in your specialty, often resulting in significant savings. Brokers will also negotiate policy terms, premiums, and manage any claims that arise from start to finish on your behalf. Brokers are also continuously evolving and developing their industry knowledge, exploring innovative new markets to benefit clients, giving you freedom of choice and security when it comes to Medical Indemnity.
At Professional Essentials, not only are we insurance professionals, but we have been servicing medical and health professionals (including doctors, dentists, nurses and the like) for over 15 years. We are therefore well-equipped to assist you, with a solid understanding of the medical profession and the risks you face every day..
Your dedicated Account Manager at Professional Essentials can not only assist you with your Medical Indemnity and practice insurance, but they can also present you with competitive policies for your other insurance needs, including home and contents, car and investment property insurance. That way, you need only deal with one person for all of your insurance requirements.
Contact Professional Essentials today for more information.