Top Mistakes when Buying Medical Indemnity

No two clinical negligence claims are the same. Compensation awards vary depending on the nature of the claimant’s injury and any associated financial losses, including ongoing care and loss of earnings.

Industry estimates suggest that clinical negligence claims “can range from £1,000 to amounts exceeding £1 million” (1). While the uncertainty of a potential claim can be concerning for any healthcare practitioner or organisation, a robust Medical Indemnity Insurance policy can provide valuable financial protection and peace of mind.

Medical Indemnity Insurance (also known as Medical Malpractice Insurance) is designed to cover the costs associated with clinical negligence claims, including:

Legal defence costs
Court fees
Compensation awarded to patients or claimants

To ensure you have the right level of protection when it matters most, avoid these six common mistakes when purchasing Medical Indemnity Insurance.

Relying on state-backed indemnity

Whether you work entirely in private practice or divide your time between the NHS and private healthcare, it is a common misconception that all clinical work is covered by the state-backed indemnity scheme.

In reality, state-backed indemnity does not cover private healthcare services. For example, GP services such as private travel vaccinations or private medical report writing are not covered under the scheme if a clinical negligence claim is made.

For more information about the Clinical Negligence Scheme for General Practice, visit:

https://resolution.nhs.uk/services/claims-management/clinical-schemes/general-practice-indemnity/clinical-negligence-scheme-for-general-practice/

Overlooking retroactive cover

Retroactive cover protects you against claims arising from work you carried out before your current insurance policy began.

If you are changing Medical Indemnity Insurance providers, it is important to discuss whether retroactive cover is required. A specialist adviser or insurance broker can help ensure you remain protected against claims relating to previous clinical work.

Choosing an inadequate limit of liability

Your policy’s limit of liability is the maximum amount your insurer will pay in the event of a claim.

When applying for cover, insurers will ask you to complete a proposal form or questionnaire to assess your level of risk. Providing accurate and complete information helps ensure you receive appropriate cover and reduces the likelihood of complications if you need to make a claim.

It is important that you take the appropriate limit of indemnity in line with the requirements of your regulatory body. Sometimes you can fall foul of your body by taking the lower limits which could put your registration in jeopardy.

Choosing a limit of liability that reflects the nature and scale of your work is essential for adequate financial protection.

Buying online without professional advice

Many healthcare professionals choose to work with an insurance broker when arranging Medical Indemnity Insurance. A specialist broker can help you understand complex policy wording, assess your liabilities and recommend cover that is tailored to your specific circumstances.

While many insurers offer online quotations, not all policies provide the same level of protection. A broker can compare insurers, negotiate policy terms on your behalf and help identify the most suitable cover.

This is particularly important for practitioners providing specialist or emerging healthcare services, such as ADHD assessments or prescribing medicinal cannabis, where insurer availability may be more limited.

Failing to update your policy

Once your policy is in place, both you and your insurer have responsibilities under the terms of the insurance contract.

One of the most common mistakes policyholders make is failing to inform their insurer or broker when their circumstances change. You should notify your provider if there are changes to:

The number of staff you employ
The services or treatments you provide
Your practice setting
Your patient volume
Changes to your annual income or business turnover
Any other material change to your business

Keeping your policy up to date helps ensure your cover remains valid and appropriate.

If you are ever unsure whether a change needs to be declared, it is always best to contact your insurer or broker for advice.

Delaying to report incidents

Solicitors estimate that the average clinical negligence claim can take between two and three years to resolve (2).

If an incident occurs that could potentially lead to a claim, notify your insurer as soon as possible, even if no formal claim has yet been made. Early notification gives your insurer the opportunity to provide advice, preserve evidence and support you throughout the process.

Reporting a potential incident will not affect your premium if no claim ultimately arises, but delaying notification could make defending a future claim more difficult.

Asian female medical professional wearing blue scrubs and stethoscope, engaging in an online consultation with a patient via laptop in a modern healthcare setting

Need help choosing the right Medical Indemnity Insurance policy?

If you’re researching Medical Indemnity Insurance, setting up a new practice or reviewing your existing cover, working with an experienced insurance broker can help ensure you have the protection that’s right for your circumstances.

MIAB has been supporting healthcare professionals for over 20 years and provides access to a leading panel of specialist insurers.