This week we chat about understanding professional indemnity cover.
For many practitioners, especially those in surgical fields, professional indemnity premiums constitute a significant practice expense.
Yet many doctors do not take the time to understand what cover they have purchased. In a survey among private specialists, 36% of respondents were unsure what type of cover they had, occurrence-based or claims-made: 70% did not know the differences between occurrence-based and claims-made insurance cover.
Considering the costs of purchasing this type of insurance cover and the importance of having the necessary legal, financial protection and support when confronted with a medico-legal challenge, leaving your understanding of your professional indemnity cover to chance is ill-advised.
To avoid unpleasant surprises when you least expect them, for example when you are faced with a summons and the insurer rejects the claim because you are no longer covered, or if you are advised to pay a large lump sum on retirement to ensure post-retirement cover for incidents that may have occurred during your time of practice, familiarise yourself with the differences between occurrence-based and claims-made cover and make sure to know what cover you have.
In general
‒ Most doctors prefer occurrence-based cover when given the choice, because it is easy to understand, provides lifelong cover that ‘does not expire’, and is not associated with hidden costs.
‒ Whereas claims-made cover has the benefit of being cheaper in the short-term, this must be weighed up against longer-term risks and uncertainties which can impact your cover and the costs thereof when you least expect this. Vulnerable times include the time when you change insurer, when you have a break in clinical practice or stop practicing altogether, when you change your scope of practice or if your insurer cancels your cover on review of your risk profile relating to your claims. Depending on the actuarial pricing model that underpins the cover, there may also be exponential annual premium increases during the first years of cover, unrelated to your risk profile.
To help busy practitioners understand basic insurance principles more easily, EthiQal will soon be launching short educational videos that doctors can watch in their own time. There will be simple graphic presentations with a voice-over explaining principles and demonstrating these by means of examples.
No practitioner should sign a policy document without understanding what type and scope of cover is offered, what their obligations are in terms of the contract of insurance and whether specific exclusions apply.
No matter how brief, always make sure that you speak to a person knowledgeable about professional indemnity cover before agreeing to a contract of insurance. Ask questions before you sign. Confirm your understanding before you enter into the agreement. You can speak directly to your insurer, or alternatively to your broker where you have appointed a financial adviser to seek the best cover for you.
EthiQal is a division of Constantia Insurance Company Limited, a licenced non-life insurer and authorised FSP. No 31111.
See EthiQal’s first column in MedicalBrief archives:
Welcome to the first in our series: Getting to know EthiQal