Do you understand your professional indemnity policy?

Good Medical Practice as laid down by the General Medical Council provides that a doctor must make sure they have adequate insurance for indemnity cover to ensure that their patients will not be disadvantaged if they make a claim about the clinical care they have provided in the UK. In this regard it is important for any surgeon to recognise the limits afforded by the Clinical Negligence Scheme for Trusts and obtain additional cover in the event that their activities require it.

There is no doubt that society is becoming more and more litigious and medical malpractice claims are increasing. While the claims may be difficult to prove (and the most problematic area for patients in any medical malpractice claim is establishing that the harm they suffered was caused by the failure on the part of the doctor) they cost huge amounts of money to defend and doctors need to ensure that they have adequate professional indemnity cover in place. Research suggests that doctors (and surgeons in particular) know very little about the detail of their professional indemnity arrangements, and in particular the policy terms and conditions.

It is therefore important that once, having obtained professional indemnity insurance, doctors familiarise themselves with the policy details and clarify the exact meaning of any clauses they do not fully understand so that in the event that a claim is received or a doctor becomes aware of circumstances which might give rise to a claim, they know what action they are required to take. If not, they run the risk of breaching a term of the policy (because they are unaware of it) and this could lead to insurance cover being jeopardised or, even worse, an Insurer deciding that the policy should be declared void, or that the policy will not respond to the claim that has been notified.

The Medical Malpractice Insurance Policy - common terms

Insuring Clause

This clause describes the risk that insurers are insuring. It is common for a professional indemnity policy to also provide cover for any circumstances that may or that are likely to give rise to a claim and which are notified to the Insurer during the policy period.

Material Non-disclosure

In seeking insurance, a doctor/policyholder has a duty of utmost good faith which requires them to disclose all material information that could be relevant to the underwriters’ decision to offer a policy and the terms on which it is offered. A failure to disclose something that is known about until after the policy has come into effect could leave the doctor vulnerable to the insurer declining cover either for that claim or even deciding that the policy should be deemed void from the start due to non-disclosure. In addition to not having cover for any particular claim which could prove very expensive, the fact that they had had indemnity declined would have to be declared in any future application for insurance, and to the General Medical Council, who may consider the lack of insurance a matter requiring further professional investigation.

Notifying a claim or circumstances- the risk of late reporting

It is usually a circumstance or a claim that is the trigger for the requirement to notify in professional indemnity policies.

It is vitally important that doctors ensure that they are familiar with the claim reporting procedures contained within the policy so that any notification of a claim or circumstances is in accordance with the policy terms. Any delay in notification could mean that cover for that particular claim is not provided.

Claims Made Policies and Retroactive dates

A medical malpractice policy is a “claims made” policy. This means that it responds to claims for the indemnity year in which a claim is made, regardless of the date the events that are the subject of the claim occurred. A policy can can also refer to a “retroactive date” which relates to the date of the treatment episode, although this is usually contained in the Insuring Clause which contains the definition of what is covered by the Policy(see above). The purpose of the retroactive date is to set the date in time before which events resulting in claims, will not be covered under the policy.

Exclusions

It is also important to be aware of exclusions contained in the Policy. Exclusions limit the scope of the Insuring Clause by excluding something that would otherwise be covered. Most policies will not cover any fraudulent, dishonest or malicious acts. In addition, fees are not normally covered so if there is a claim for repayment of fees that is not something Insurers would meet.

Conclusion

Receiving a claim can be a distressing event. It will be less so if the time is taken to read and understand the provisions of the policy so that the appropriate action can be taken promptly in accordance with the terms and conditions of the policy to ensure that cover is not jeopardised.