The General Medical Council says that medical professionals must hold adequate and appropriate insurance or indemnity cover in order to meet claims. Doctors typically choose between a discretionary indemnity arrangement with one of the defence organisations, or a contractual insurance policy with a commercial insurance company. A discretionary indemnity provides assistance at the sole and absolute discretion of the indemnity provider: they can give or withhold help at their choice. By contrast, insurers are contractually bound by the terms of the insurance policy, and the general law: cover is obligatory, subject to the terms of that policy.
Consequently the terms of the policy are fundamental to establishing whether or not a medical practitioner has insurance cover in any given situation. A policy may exist, but has it been triggered, and does the situation that has arisen fall within the scope of the policy? In this article we have highlighted some of the key coverage issues that arise with medical malpractice policies.
Who is insured?
The medical practitioner is insured, obviously, but many medical practitioners provide private treatment through their own company, often a limited liability company. There may be a claim against that company – rather than the medical practitioner individually – and the policy should be checked to see if the company is an insured entity as it is a separate legal entity. An issue might arise (and does arise in practice) where the company is sued but is not named on the policy. What then?
Claims and other problems
Medical practitioners face legal claims from dissatisfied patients relating to allegedly negligent treatment: that is the bread and butter of medical malpractice policies. Medical practitioners may face other legal problems which may or may not be covered. For instance:
- GMC complaints and fitness to practice investigations;
- Internal disciplinary procedures;
- Criminal actions and regulatory investigations by the police or Health and Safety Executive;
- Coroners’ inquests;
- Claims for things other than negligence – e.g. breach of data protection rules; and
- Claims for other types of work such as medico-legal reports.
In each case the policy wording will need to be reviewed, and other policies (such as legal expenses insurance) should also be checked. Nor should it be assumed that if there are other policies, they are all written on the same terms, with identical provisions (for example on notification).
Insurance policies provide cover on a claims-made basis: they cover claims first made in the relevant policy year. Discretionary indemnity may be offered on a claims made basis but is typically offered on a claims arising basis: the cover attaches to the time when the circumstances that gave rise to the claim arose. As a result, most insurers will not cover claims arising before a particular date, called the retroactive date. That date is often (but is not necessarily) the date a practitioner first switched cover from a discretionary indemnity provider to a commercial insurer.
For claims relating to treatment before the retroactive date, an insured must look to their previous indemnity provider. Identifying the correct date to focus on may be difficult where treatment was given over a period of time: it can mean that part of a claim falls to an insurer, and part to a previous indemnifier.
It is a condition of most policies that claims and circumstances are notified to insurers promptly when they arise. We find that notification conditions are breached quite often, partially because the insured doctor did not read the policy and familiarise themselves with the notification provisions, but often because of the insured’s apparent failure to appreciate what a circumstance is. It is not uncommon for a claim to be notified to an insurer and then, on investigation, it to be discovered that a complaint had been raised some time previously.
The consequences of a failure to notify relevant information will vary depending on the terms of the policy, but no longer is the policy automatically avoided. The most serious situation for an insured is if they knew of a complaint in policy year 1, but did not notify until policy year 2. Knowledge of the matter before year 2 may have affected the terms offered, or whether terms were offered at all, and may exclude the claim from cover.
Most policies specifically exclude certain types of claim. Some of the most significant exclusions that we encounter are as follows:
- NHS exclusions. NHS work is usually covered by crown indemnity and where that is so, an insurance policy often excludes cover for NHS work.
- Specific treatments/issues. As problems with certain treatments become evident, and claims arrive, insurers may respond by introducing specific exclusions into new policies. For example, some insurers now excluded cover for claims arising from the use of metal-on-metal hip implants, or vaginal mesh or tape.
- An important exclusion is usually any claim or circumstance that might on reasonable enquiry have given rise to a claim that should have been notified before the current policy comes into force. Even where the same insurer renews cover, a failure to notify may prejudice cover in the renewal year.
Admissions of liability
It is often a condition of cover that the insured must not admit liability, or make settlement offers, without insurers’ prior consent. That could potentially conflict with a doctor’s duty of candour. In practice insurers are well aware of this Statutory and professional duty and expect insureds to comply with it. Coverage issues can arise if insureds act without assistance and make sweeping – and unjustified – admissions, or offer refunds (which might be deemed tantamount to an admission in certain circumstances) which are later relied upon in litigation.
With even apparently simple claims, coverage issues can arise. Many can be reviewed and resolved at the outset of any claim or circumstance: others may not come to light until later. If there is one lesson for medical practitioners then it is, make sure you know your policy. A careful review of one’s practice when completing the proposal form, and checking the policy terms once incepted, are both time well spent.