Commercial Insurance for Medical Indemnity – Part 01

Commercial Insurance for Medical Indemnity – Part 01

Commercial Insurance for Medical Indemnity – Part 01

13 Dec 2018

Commercial Insurance & MDO Medical and Discretionary Cover in relation to Medical Indemnity.

Commercial Insurance - A Topic for Debate

On the 6th of December 2018, the Department of Health & Social Care (DOHSC) released a 50-page document on the concerns of medical indemnity cover and its stability in the long term, specifically outlining the risk of discretionary memberships and policies for both practitioners and patients alike. This article has been produced by Dr Rajadurai, MD of Servca - to explore some of the concerns raised by the DOHSC so that healthcare practitioners can make better informed decisions when choosing an indemnity provider.

What is the difference between Commercial Insurance Policies & MDO Memberships?

Commercial Insurers offer contract certain coverage. Policy specifics are outlined in the policy. It is a contractual agreement that clearly states all the terms and conditions of cover and any relevant exclusions or subjectivity of cover. MDO’s provide discretionary indemnity memberships. Membership benefits may include a range of services including medical indemnity, medicolegal advice and assistance although there is no contractual or legal obligation for the MDO’s to provide their membership benefits. Table 1.0 Current provision of Cover (summarised from the DOHSC report)

What is the concern with Discretionary Cover?

Memberships through discretionary indemnity providers are raising serious concerns because there is no contractual or legal obligation for them to pay for the claims of their members that they represent. This can impact both the healthcare practitioners who may feel resentful at not receiving the appropriate representation that they have paid for, and it may also impact the patient who may not receive the access to the redress that they are due, if negligence is proven. Furthermore, because of non-regulation of discretionary indemnity providers - they do not need to reveal their financial security. With claims values dramatically increasing as a result of increased frequency in claims notifications and increased legal fees, it is vital to ensure that discretionary indemnity providers have the appropriate financial reserves to be able to represent all their members adequately. As a result of the above, we are already seeing an upward trend where some discretionary indemnity providers are being forced to:

(i) decline representation for a greater number of claims (under their discretionary right to do so)

(ii) increase their costs of indemnity to balance their overall book

(iii) seek insurance or re-insurance solutions to help with claims over a certain value (iv) decline membership to certain high risk specialities of healthcare practitioners.

Conclusion to Part 1: The dynamics of medical indemnity are changing. Healthcare practitioners are now exploring different avenues of indemnity and are learning the differences between the various options. The consultation released by the DOHSC is the first step in a much needed reshape in the medical indemnity arena. As an owner-managed independent Medical Indemnity Broker at Lloyd’s, we believe in educating healthcare practitioners about indemnity and the options that are available to them. We proudly provide coverage for hundreds of practitioners, associations, clinics and medical establishments throughout UK, Europe and North America and we’d love to help you too. To learn more, or offer your feedback please visit our website www.servca.co.uk or contact Dr Edwin Rajadurai in the strictest of confidentiality: T: +44(0)207 8469010M: +44(0)747 424 6616E: erajadurai@servca.com

Commercial Insurance - A Topic for Debate

On the 6th of December 2018, the Department of Health & Social Care (DOHSC) released a 50-page document on the concerns of medical indemnity cover and its stability in the long term, specifically outlining the risk of discretionary memberships and policies for both practitioners and patients alike. This article has been produced by Dr Rajadurai, MD of Servca - to explore some of the concerns raised by the DOHSC so that healthcare practitioners can make better informed decisions when choosing an indemnity provider.

What is the difference between Commercial Insurance Policies & MDO Memberships?

Commercial Insurers offer contract certain coverage. Policy specifics are outlined in the policy. It is a contractual agreement that clearly states all the terms and conditions of cover and any relevant exclusions or subjectivity of cover. MDO’s provide discretionary indemnity memberships. Membership benefits may include a range of services including medical indemnity, medicolegal advice and assistance although there is no contractual or legal obligation for the MDO’s to provide their membership benefits. Table 1.0 Current provision of Cover (summarised from the DOHSC report)

What is the concern with Discretionary Cover?

Memberships through discretionary indemnity providers are raising serious concerns because there is no contractual or legal obligation for them to pay for the claims of their members that they represent. This can impact both the healthcare practitioners who may feel resentful at not receiving the appropriate representation that they have paid for, and it may also impact the patient who may not receive the access to the redress that they are due, if negligence is proven. Furthermore, because of non-regulation of discretionary indemnity providers - they do not need to reveal their financial security. With claims values dramatically increasing as a result of increased frequency in claims notifications and increased legal fees, it is vital to ensure that discretionary indemnity providers have the appropriate financial reserves to be able to represent all their members adequately. As a result of the above, we are already seeing an upward trend where some discretionary indemnity providers are being forced to:

(i) decline representation for a greater number of claims (under their discretionary right to do so)

(ii) increase their costs of indemnity to balance their overall book

(iii) seek insurance or re-insurance solutions to help with claims over a certain value (iv) decline membership to certain high risk specialities of healthcare practitioners.

Conclusion to Part 1: The dynamics of medical indemnity are changing. Healthcare practitioners are now exploring different avenues of indemnity and are learning the differences between the various options. The consultation released by the DOHSC is the first step in a much needed reshape in the medical indemnity arena. As an owner-managed independent Medical Indemnity Broker at Lloyd’s, we believe in educating healthcare practitioners about indemnity and the options that are available to them. We proudly provide coverage for hundreds of practitioners, associations, clinics and medical establishments throughout UK, Europe and North America and we’d love to help you too. To learn more, or offer your feedback please visit our website www.servca.co.uk or contact Dr Edwin Rajadurai in the strictest of confidentiality: T: +44(0)207 8469010M: +44(0)747 424 6616E: erajadurai@servca.com

Global Headquarters

Servca Group

Dukes House

32-38 Dukes Place

5th Floor

London, EC3A 7LP

United Kingdom


+44 (0) 207 2250000

info@servca.com


Broker at Lloyd’s SLM1389

European Office

Servca Europe

Dragonara Business Centre

Dragonara Road

5th Floor

St Julian’s, STJ 3141

Republic of Malta


+356 (20) 341690

eu@servca.com


Broker at Lloyd’s (Brussels) SLM1883

Canadian Office

Servca Canada Insurance Group Inc
40 King Street West
Suite 2100
Toronto
M5H 3C2
Canada


+1 (647) 846 5555

canada@servca.com


Non-regulated servicing company

Northern Ireland

Servca Northern Ireland
River House Belfast

48-60 High Street

Belfast

BT1 2BE



+44 (0) 2895582000

ni@servca.com


Broker at Lloyd’s SLM1389

© 2024 Servca


Servca Group Ltd is a private limited company registered in England and Wales; Registered Number: 7727494; Registered Office: Dukes House, 32-38 Dukes Place, 5th Floor, London, EC3A 7LP, United Kingdom. Authorised and regulated by the Financial Conduct Authority. Servca European Insurance Brokers Ltd (a private limited company incorporated in Malta and enrolled to act as an insurance broker); Tower Business Centre, Level 3, Tower Street, Swatar, BKR, 4013, Republic of Malta. UK branch office is registered in England and Wales, authorised and regulated by the Financial Conduct Authority. Servca Canada Insurance Group Inc, a private limited company incorporated at 40 King Street West, Suite 2100, Toronto, M5H 3C2, Canada. Servca group of companies are owned and operated by Servca Group Holdings Ltd, a private limited company registered in England & Wales.

Privacy Policy

Cookies

Global Headquarters

Servca Group

Dukes House

32-38 Dukes Place

5th Floor

London, EC3A 7LP

United Kingdom


+44 (0) 207 2250000

info@servca.com


Broker at Lloyd’s SLM1389

European Office

Servca Europe

Dragonara Business Centre

Dragonara Road

5th Floor

St Julian’s, STJ 3141

Republic of Malta


+356 (20) 341690

eu@servca.com


Broker at Lloyd’s (Brussels) SLM1883

Canadian Office

Servca Canada Insurance Group Inc
40 King Street West
Suite 2100
Toronto
M5H 3C2
Canada


+1 (647) 846 5555

canada@servca.com


Non-regulated servicing company

Northern Ireland

Servca Northern Ireland
River House Belfast

48-60 High Street

Belfast

BT1 2BE



+44 (0) 2895582000

ni@servca.com


Broker at Lloyd’s SLM1389

© 2024 Servca


Servca Group Ltd is a private limited company registered in England and Wales; Registered Number: 7727494; Registered Office: Dukes House, 32-38 Dukes Place, 5th Floor, London, EC3A 7LP, United Kingdom. Authorised and regulated by the Financial Conduct Authority. Servca European Insurance Brokers Ltd (a private limited company incorporated in Malta and enrolled to act as an insurance broker); Tower Business Centre, Level 3, Tower Street, Swatar, BKR, 4013, Republic of Malta. UK branch office is registered in England and Wales, authorised and regulated by the Financial Conduct Authority. Servca Canada Insurance Group Inc, a private limited company incorporated at 40 King Street West, Suite 2100, Toronto, M5H 3C2, Canada. Servca group of companies are owned and operated by Servca Group Holdings Ltd, a private limited company registered in England & Wales.

Privacy Policy

Cookies

Global Headquarters

Servca Group

Dukes House

32-38 Dukes Place

5th Floor

London, EC3A 7LP

United Kingdom


+44 (0) 207 2250000

info@servca.com


Broker at Lloyd’s SLM1389

European Office

Servca Europe

Dragonara Business Centre

Dragonara Road

5th Floor

St Julian’s, STJ 3141

Republic of Malta


+356 (20) 341690

eu@servca.com


Broker at Lloyd’s (Brussels) SLM1883

Canadian Office

Servca Canada Insurance Group Inc
40 King Street West
Suite 2100
Toronto
M5H 3C2
Canada


+1 (647) 846 5555

canada@servca.com


Non-regulated servicing company

Northern Ireland

Servca Northern Ireland
River House Belfast

48-60 High Street

Belfast

BT1 2BE


+44 (0) 2895582000

ni@servca.com


Broker at Lloyd’s SLM1389

© 2024 Servca


Servca Group Ltd is a private limited company registered in England and Wales; Registered Number: 7727494; Registered Office: Dukes House, 32-38 Dukes Place, 5th Floor, London, EC3A 7LP, United Kingdom. Authorised and regulated by the Financial Conduct Authority. Servca European Insurance Brokers Ltd (a private limited company incorporated in Malta and enrolled to act as an insurance broker); Tower Business Centre, Level 3, Tower Street, Swatar, BKR, 4013, Republic of Malta. UK branch office is registered in England and Wales, authorised and regulated by the Financial Conduct Authority. Servca Canada Insurance Group Inc, a private limited company incorporated at 40 King Street West, Suite 2100, Toronto, M5H 3C2, Canada. Servca group of companies are owned and operated by Servca Group Holdings Ltd, a private limited company registered in England & Wales.

Privacy Policy

Cookies