Professional indemnity is a type of professional liability insurance which protects service-providing professionals from bearing the full cost of defending against claims of negligence and the subsequent damages that may be awarded in a lawsuit.
In medical professions, such a type of insurance may be called malpractice insurance or medical indemnity insurance and aims to protect both your assets and your reputation. In response to the question, do I need professional indemnity insurance, it depends on your particular profession and which country you are working in.
Professional indemnity insurance is a requirement of registration for doctors in Australia. Those intending to practice as a medical practitioner must ensure they are insured or indemnified for every context in which they practice including private practice and employment or contractual arrangements in the public sector.
For claims arising from the conduct of doctors working in public practice, doctors are usually covered by their employer’s insurance; however, there might be expenses associated with inquests, inquiries or investigations that are not covered.
Doctors intending to work in Australian public hospitals are advised to seek advice from prospective employers about any exclusions that may apply.
It is a requirement of the Nursing and Midwifery Board in Australia that nurses provide evidence of professional indemnity insurance either from their employer or personally when seeking registration.
Nurses and midwives require different levels of professional indemnity cover according to their individual scope of practice and are advised to assess whether they have the appropriate arrangements in place.
As outlined by the Medical Board of Australia, insurers in Australia must meet minimum product standards. Applying for professional indemnity insurance through a specialist insurer for the health industry is usually a matter of contacting an authorised insurer to request a quote.
Medical indemnity insurance policies should outline the amounts insured and what specifically is covered, for example defence costs of investigations into healthcare provided by the practitioner, international cover when working abroad, healthcare provided by video conference or telephone, working after hours as a locum. These may be included in the policy or be purchased as add-ons if approved.
The Australian Federal Government recognised that the escalating costs of professional indemnity insurance premiums has an impact on doctors and subsequently put a range of programs in place to help medical practitioners and their insurers or medical defence organisations with the associated costs. More information on these schemes can be obtained from the Australian Department of Health.