Medical indemnity insurance is a compulsory condition of registration for all medical practitioners in Australia.

It is also a condition of registration for allied health professionals including dentists (also dental hygienists, dental prosthetists and dental therapists), chiropractors, midwives and nurses, optometrists, osteopaths, pharmacists, physiotherapists, podiatrists and psychologists.

If you are a doctor or allied health professional, your medical indemnity insurance covers both you and your patients if something goes wrong during medical care and your patient is harmed.

Medical indemnity insurance is called ‘long-tail’ insurance, meaning that many years may pass between the period for which cover was provided and the date when claims are finally settled.

What does it cover?

Medical indemnity insurance covers you for both legal costs and the costs of awarded compensation if you are found to have caused harm by committing an error, omission or negligent act.

Medical indemnity insurance also covers you while you are training in a hospital, if your medical services to a patient result in a claim against the hospital.

Personal medical indemnity

You should also consider taking out personal medical indemnity insurance to cover any work you might do outside the workplace, such as helping in an emergency situation providing medical care to the public, volunteering for not-for-profit organisations to practice medicine or write medical scripts.

Claims incurred versus claims made

The insurance is usually arranged on a claims-incurred basis, which means that any incident that happens during the period of cover is covered irrespective of when the claim is made, which may be any time in the future.

Some medical indemnity insurers are changing to claims-made cover, which only protects you if you notify the claim to your insurer during the period of coverage.

This gives greater control over predictability of claims for the insurer, but it could mean that you are not covered if a claim is lodged against you after the indemnity period has finished.

Make sure you understand the implications of a claims made cover before you accept this kind of insurance.