There are two areas for consideration when thinking about medical malpractice claims. The first is whether or not you are adequately covered as an individual practitioner and the second, that may not be applicable to all, is whether your business is covered. I have been dealing with many consultants with private practice over the years and there is a common misconception that if you have an individual malpractice policy or membership with the MDO’s, that this cover extends to cover the business. This is not the case.
Looking at your individual malpractice cover first, the vast majority of you will have membership to either the, Medical Protection Society, Medical Defence Union or the Medical and Dental Defence Union of Scotland. All of these organisations operate a discretionary non-insurance occurrence based cover for its members. These three organisations have historically been the only options open to medical professionals, however, this has changed quite significantly over recent years. There are now more insurance providers than there are MDO’s putting together packages for consultants with private practice, although this is on a claims made basis of cover. A claims made basis means that you will be covered for claims notified during the period of insurance, which may include incidences going back several years, providing there is a retroactive date back to that date.
The choice of whether you use the MDO’s or go with an insurance provider is a personal one, but here a few key points to consider.
- Do you want more than just cover for a claim from your provider?
- Would you want you provider to be financially regulated?
- Would you want your provider to be financially rated?
- Are you happy with discretionary cover or would you want a legal contract of cover?
- What is the private hospital you may work for happy with?
Although the MDO proposition is quite adequate for most, there are a growing number of consultants looking at their options.
Now we look at the business malpractice exposure. You are aware of the importance of an individual medical practitioner holding their own medical malpractice cover, however, you may not be aware that if you operate a limited company to provide services and employ staff, these indemnity arrangements are not designed to cover the errors and omissions of these staff and will not protect you financially if a negligence claim is made.
Although a prudent practitioner will ensure that staff hold their own malpractice cover this cover will not extend to protect the company, as it is designed to fit that employee’s own needs and interests first. This gap in cover is known as ‘vicarious liability’ whereby you are responsible for the acts and omissions of an employee and in some circumstances a self-employed contractor, for whose conduct you are legally responsible.
Indemnity coverage for the company, its principals and employee’s is now becoming more of a necessity, with negligence claims being directed towards the company that provided those services, rather than a specific individual, as the likelihood of compensation is greater. The difference here is that this type of cover can only be obtained on a contractual insurance basis, not a discretionary basis, so the MDO’s can’t provide it.
A few things to consider when reviewing your business exposure are:
- Do you operate a limited company?
- Do you employ staff or use self-employed people within your business?
- Do any of the contracts of service you hold have an insurance requirement?
Malpractice cover for your business can be invaluable, so it is worth while taking a little time to review how you currently operate and if you would benefit from business malpractice insurance.
Author profile: Medical Insurance Consultants Ltd
Medical Insurance Consultants Ltd is a specialist insurance broker working solely with healthcare companies and professionals for over 16 years. They provide a range of bespoke insurance products including medical malpractice, professional indemnity, property, liabilities and private practice income protection specifically designed to meet the needs of private practice professionals and healthcare companies.