Don’t think you can skimp on your cover
With mounting claims and defence costs hitting private doctors hard in the pocket and purse, Hempsons’ Tania Francis takes a legal look at what every independent practitioner needs to know.
All doctors and other healthcare professionals should, of course, be aware of the need for insurance or indemnity cover.
But, from time to time, I am referred a client who, for one reason or another, doesn’t have cover for a case – be it civil litigation, regulatory (GMC) proceedings or a criminal investigation.
This can be a disaster for many reasons.
For a start, there is the expense. Lawyers aren’t cheap, and however painful it may feel to pay your indemnity/insurance fee or premium every year, a lawyer’s invoice is not something you want to spend your hard-earned cash on.
Paying for legal advice and representation is just the beginning. If you are being sued for clinical negligence and/or breach of contract and you lose or make an offer of settlement, you will also have to pay compensation/damages to the patient and the patient’s legal fees.
Even if you win, you will probably still be liable for your own lawyers’ fees, as the other side will only be ordered to pay your costs in very limited circumstances since the introduction of qualified one-way cost shifting – and they will never pay 100%.
Then there is the stress. Lawyers may not have the best bedside manner, but they are at least a source of advice. Your insurer/indemnifier may also provide you with support and advice.
GMC sanction
Another potential, and serious, consequence is that you may face GMC proceedings. You are professionally obliged to have adequate insurance/indemnity cover in place and the GMC has been known to erase doctors who do not.
An example is the recent High Court case in which a consultant obstetrician unsuccessfully appealed against a finding by the GMC’s Medical Practitioners Tribunal Service (MPTS) panel to erase his name from the register because he had practised privately for nearly five years without professional indemnity cover.
The reason you are required to have cover is to protect your patients. You are required to have cover that enables your patients to be paid compensation if you are liable for loss or damage they have suffered as a result of your acts or omissions.
You are not allowed to self-insure – that is, to work on the basis that you will pay compensation out of your own pocket if you are sued, perhaps because you think you are at a low risk of being sued or that any claim is unlikely to be for a sum you can’t afford.
Even if you were allowed to, I wouldn’t recommend it. Even in a low-risk specialty, the value of claims plus legal fees can be high.
Crown indemnity
You don’t need cover if your patients are protected in some other way. If you work exclusively as an employed doctor in NHS secondary care, you will be covered by NHS – or ‘Crown’ – indemnity. Your employing NHS trust will be liable for any claim made by a patient treated by you.
In practice, the patient will sue the trust rather than you personally. However, NHS indemnity will not cover your private practice or assist with a GMC or criminal complaint.
In addition, if you are called to give evidence at an inquest, and there is some conflict between you and your employer, you may also require your own independent legal advice, which may not be funded by your employer.
GPs not covered
As you will be well aware, NHS GPs are not covered by NHS indemnity – a topical bone of contention – and must therefore have their own cover, although recently the Health Secretary has announced a new state scheme is being considered.
If you have a private practice, insurance/indemnity is essential. You should discuss your needs carefully with your insurer or indemnifier.
You must have insurance/indemnity cover for your entire scope of work. If you employ staff, you are vicariously liable for their acts and omissions, and you must therefore ensure that you have cover that includes your employees.
And if you are treating NHS patients in the private sector, you need to check the indemnity arrangements so that you know whether the NHS is providing indemnity or whether you will be personally liable.
If the latter, make sure you are covered by your own policy for what you are about to do, and check whether you will be increasing your profit/turnover as a result of taking on the work.
The reasons for lack of cover are many.
Sometimes it’s deliberate, believe it or not, perhaps because of the cost. Sometimes healthcare professionals don’t realise that they need cover – perhaps believing that they will be covered by the NHS.
Sometimes it’s an administrative error – not opening your renewal notice or not giving your insurer or indemnifier your new address so that you don’t receive it. Direct debit helps to avoid this scenario.
There are also times when a doctor has not told their insurer or indemnifier of a change in their scope of work or earnings/turnover.
This can lead to refusal of cover/assistance. It’s important to review the information provided to your insurer or indemnifier at each renewal date and when any changes occur during the year.
Check your turnover
When you prepare/approve your tax return, think to check whether your income/turnover has increased since the previous year.
Equally, if you start doing something in the private sector that you used only to do in the NHS, discuss it with your insurer/indemnifier.
You must also be aware of what your policy/membership does and does not cover. Your professional obligation is only to have cover for your liabilities to patients. However, you may also want cover for GMC complaints and criminal proceedings and possibly inquests.
Although patients cannot recover damages via these means, you will need legal assistance and representation, and that can be costly, especially if the proceedings go all the way to an MPTS hearing, or a Crown Court trial. It happens…
Changing provider
If you change your indemnity/insurance provider, there are some issues you should be aware of.
You need to know what your current and prospective providers will cover and ensure that there are no gaps and no double cover.
It is important to report any claims or potential claims you become aware of, both to your insurance company/indemnifier at the time, and to any future provider. This is to ensure that liability is accepted by the appropriate company and cover is not refused or your policy invalidated.
When you are shopping around, make sure you are comparing like with like. Look at what they will cover you for, check the exclusions and excesses, the limits of liability and what sort of advice/support they will offer you. Take advice if you need it.
There are basically two ways in which claims/complaints can be covered. These are on a:
- ‘Claims made’ basis;
- ‘Claims/losses occurrence’ basis.
A ‘claims made’ policy will cover you for a claim made – and reported – during the period of cover, even if the alleged negligence took place years previously, as long as it took place after the retroactive date. So it’s very important to have the correct retro-active date in your policy.
A ‘claims occurring’ policy will cover you for a claim relating to negligence that occurred during the period of cover, even if the claim is made some time later – by which time you may not be with that company any more or may have retired. So make sure you keep details of all old policies for that reason.
Whenever you cancel cover or allow it to lapse, you need to think about run-off cover, especially for ‘claims made’ policies. Similarly, when you retire, before you cancel anything, think about run-off cover.
You should ensure that you have cover for any claims that may be made after cancellation of your policies, relating to treatment provided during your entire previous career, as claims can be made many years after the allegedly negligent treatment for a variety of reasons.
This may all sound like a lot of hard work, but it’s worth getting it right. Once you have had a claim or GMC complaint, it is harder and more expensive to get cover – without which you cannot work. So prevention really is better than cure.
Tania Francis (right) is a solicitor and a partner specialist healthcare law firm Hempsons. She is also a qualified doctor. Tania advises doctors, dentists and other healthcare practitioners and providers. She specialises in regulatory law and clinical negligence and healthcare-related contractual disputes, including cases where there are related criminal proceedings