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HomeNews ReleaseEthiqal: What is indemnity cover and why do doctors need it?

Ethiqal: What is indemnity cover and why do doctors need it?

A surprising number of GPs and specialists are unaware of the myriad ways in which they could fall victim to litigation, often believing this to be confined to the settlement of a negligence finding following an inadvertent patient injury. According to Dr Hlombe Makuluma, medico-legal risk advisor at EthiQal, a division of Constantia Insurance Company Ltd and the first South African provider of both occurrence-based and claims-made cover to doctors, the risk spreads far wider.

Firstly, irrespective of the outcome of a negligence claim adjudicated on by either the Health Professions Council of South Africa (HPCSA), an independent mediator or the civil courts, the lead-up to a hearing and the hearing itself require substantial amounts of time and money.

Then there are potential complaints about your behaviour outside of the clinical setting or, for example, after unexpectedly and suddenly being called upon to help someone in a road accident or aboard a commercial flight.

Says Makuluma, “You’re legally obliged to assist – and if the patient believes you didn’t do it to the best of your ability or were unprofessional, they could report you to the HPCSA which is then obliged to investigate, regardless of the merits of the complaint.”

He says the legal process leading up to a hearing, known as “discovery” can be very expensive and most often requires specialist legal representation – regardless of the outcome.

“The question I often ask doctors is what kind of cover they need, so we can tailor it more precisely to the scope of work they’re registered for with the HPCSA. Doctors often forget that unprofessional conduct is a very wide-ranging term that can impact you at work or on holiday,” he adds.

Makuluma emphasises that while public sector doctors automatically qualify for vicarious liability cover (meaning the employer accepts financial responsibility), this does not extend to unprofessional conduct outside of their employment, such as the instances cited above. Additionally, the cost of a doctor suing somebody for allegedly defaming them on a social media platform, or themselves inadvertently flouting professional conduct rules there, would not be vicariously covered.

The Gauteng Health Department, which faces medico-legal negligence claims totalling R50bn (half of its annual health budget), earlier this year sent out a circular that warned doctors and facility managers that if wilful negligence was proven, the facility and/or the individual doctor would be held liable. It argues that, if proven, this would fall outside the ambit of vicarious liability.

Another fraught area is a doctor’s legal obligation to report the unprofessional conduct of a colleague to the authorities (normally, but not exclusively, the HPCSA). This could include clinical negligence or misconduct, impairment due to addiction, overbilling and/or over-servicing, or even colluding with patients to defraud a medical aid scheme.

While your indemnity cover will most likely specifically exclude fraud, it will cover you up until a verdict is delivered – and if you’re cleared, pay out in full.

Makuluma explains that there are two basic types of indemnity cover: claims-made and occurrence-based. The first is claims-made, which covers any event occurring and reported to EthiQal while the doctor is a paid-up member. The moment the doctor terminates their cover, moves to another insurer or ceases being a member, having failed to report it, the incident is no longer covered. Makuluma stressed that even an incident like an upset patient storming out of a doctor’s rooms needs to be reported, as it could have future implications and favour an appropriately-insured doctor.

The second type of cover is occurrence-based, meaning you’ve covered for any event that occurred while you were insured, even if your insurance has lapsed or you are no longer a member, due to retirement, ill-health or any other reason. Occurrence-based cover extends beyond the grave of the member.

Like all claims, both kinds of cover are subject to a legal prescription period (in this context, any complainant has a maximum of three years from the time of an adverse event or from when he or she become aware that the event is claimable, to make his or her claim). Under this type of cover, there is no legal obligation on the part of the doctor to report an event, though most insurers prefer this as a helpful, pragmatic move.

Says Makuluma, “A doctor’s primary business is patient safety, but in the course of his or her work mistakes may happen and can result in injuries to patients. When this happens, the patient will seek some sort of a redress, and these mistakes will need to be resolved by an independent body. Being appropriately covered can make all the difference.”

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