Dentists Indemnity Cover – Discretionary or Contractual?

There have been quite a few articles recently on the merits of indemnity arrangements for dental and medical professionals.  The providers of indemnity, both defence organisations and insurers, pointing out the shortcomings of each others proposition.  Who is right and who is wrong?  Simple answer is they are both right, but being transparent on the facts is a different matter.

It does seem that the insurance option is getting a bit of a bashing currently, but is this justified?  Well one of the problems I can see in the comparison the MDO’s are making at present is the way in which they treat the whole insurance market/policies the same.  Creating a picture that insurers will cover you year by year with high premiums to pay should you wish to leave to go to another provider.  This is not correct, as any good insurer or broker will ensure that the cover you get year on year provides cover for you from the point you first took out an insurance policy.  This is shown as the retroactive date on your policy and means that your policy will repsond to claims notified during a period of insurance for incidents that occurred after this retroactive date.  Similar to the way in which MDO membership will cover you instances that occur from when you were a member (occurrence based cover).  An insurance policy can also provide cover when you retire or die (run-off cover), usually at no additional premium as this would have been rated for in the cover you had in the previous years.  If in doubt just ask if it is included.

I think a key point here is the level of transparency to each option, with very little from the MDO’s as they are not required to do so legally.  I feel there is a degree of nervousness buidling within the MDO’s as the appetite of insurers for Medical Indmenity insurance is growing, with more and more competitive and comprehensive schemes coming on stream each year.  Personally I am still at a loss as to why the UK still accepts MDO membership as adequate cover, when it is at the descretion of the MDO whether or not they will provide cover to a member.  The lack of financial regulation of the MDO’s also raises concerns for me, because if there were a deterioration of the balance sheet for these organisations we may find out too late or its members will be hit with large increases to make up the shortfall.

I would say however, each has its merits and insurance is not right for all as is the case for discretionary cover.

Simon Downing – Managing Director MIC Ltd

The MDU change their mind again!

Some of you may have heard recently about the Medical Defence Union switching the way in which they provide indemnity cover to its members again. You may have also not even realised that the MDU have been providing indemnity to its members since 2000 via an insurance policy.

Why have they done this? Well this is not too clear from their press release or the ‘we want you back letter’ they are sending out to ex-members and those thinking of moving to another insurance provider from the MDU. Their reasons for switching in 2000 and their press release in 2010 heavily contradict the reasoning behind switching back to discretionary cover as of the 1st April 2013. They say that discretionary is now the best way to offer this cover to their members, yet in another breath, as shown in their December 2010 press release, ‘if there is no legal entitlement to indemnity, as is the case with discretionary indemnity, then there is a risk that deserving patients may go uncompensated.’ They then go on to add, ‘You are not allowed to insure your house or home with discretionary indemnity and it is unthinkable that discretionary indemnity remains acceptable for clinical negligence.’

Well I am not sure about you, but this has confused me. Which method is the right one to use to indemnify medical and dental professionals? The answer is that both have their merits, it just depends on which merits you hold as being the most important to you. Discretionary cover holds itself up as being flexible in the manner it can support someone, which is true, but then look at the word discretionary. There is no legal obligation to provide support and I have heard many people say, ‘of course they will provide support’. Unfortunately, this way of thinking of it is not actually true. There have been many occasions where support has not been provided, and the MDU mention some of these in their 2010 press release. Why haven’t they provided support? Well they don’t have to tell you, is the answer to that.

Here lies the flaw in the discretionary indemnity model. Accountability and transparency is almost non-existent within the mutual discretionary model. Members have no recourse options if they feel hard done by and no regulatory body to impose sanctions or fines. The majority of other EU and Non-EU countries realise this fact and have pushed through the requirement to hold an insurance policy, rather than relying upon descretionary cover. Another point that comes from this is how do you know if the MDO you are paying your subscriptions to is financially secure? They are not regulated, they don’t have to publish their results and they are not accountable to any authority.

A recent client of ours incepted their indemnity cover with us on the 1st March 2013 and all was fine. They then received the letter, referred to earlier, from the MDU which raised points about the cover they were going to and how bad it was. Again, forgetting that they themselves had been providing such a policy for he last 13 years, and making assertions that ‘claims made’ policies ‘lock you in until retirement’, ‘one year’s cover for one years premium’ and ‘claims made subscriptions start low but will eventually rise’. All of these sound bad to the client, but are they accurate in reality? Simple answer is NO!. One years cover for one years premium is inaccurate, as claims made policies have a retroactive date that provides cover for claims notified during the period of insurance that may have occurred after the retoractive date. This is exactly what happens when someone moves from the MDU, as the new claims made policy will have a retroactive date back to the year 2000, when the MDU changed to a claims made policy. Claims made policies lock you in until retirement. Do they? NO! Clients who move from us or the MDU to the MPS or MDDUS have to simply ask the new indemnity provider to cover the previous period of cover. This is not a difficult question and it something claims made policies do all the time.If the new provider will not cover them then you may have to purchase run-off cover for this period. But if they want you back then they have to work to your needs, not theirs. Simple market forces. Claims made subscriptions start low but will eventually rise. Do they all? NO! It is a simple matter of rating and underwriting. Insurers don’t walk blindly into insuring areas, they gather information to understand the market, the trends and future activity. Insurers also know what competition means, an example is the current Consultants indemnity scheme we use for our clients hasn’t seen a rate rise in 4 years. I would like to see an MDO’s subscription rates over the last 4 years, as I am sure there would be significant rises in subscriptions. The MDU here are relying upon their experience solely, which raises the question, is the way they do it the best way for individuals. Clearly not, as a lack of individual assessment means a higher charge back to that individual.

Take a look at how Medical Insurance Consultants can help you cover your indemnity on a legally binding insurance contract. View our summary page here.

Consultants Private Practice Medical Indemnity Insurance Savings!

MIC recently released their new Medical Indemnity Insurance product to Consultants with a great reception. The product covers all indemnity needs for private practice and gives medico-legal helpline if you need it. We don’t blanket rate specialities, like most MDO’s, we look at you as an individual and quote you a price based upon your roles, income and history. Indemnity limits are available to suit your needs or the limits set down by the private hospital you may work for, be it £1 million, £3 million, £5 million or £10 million.

Current savings being achieved are at least 25% off your existing membership rates/premium.

To see what you could be saving just give us a call on 0800 163870 or email [email protected] .

Remember that MIC is not a one trick pony and can assist you in all your business insurance needs as well as many personal ones.

Medical Indemnity insurance for Consultants and Specialists private practice

MIC are pleased to announce that we are now able to expand the medical professions we can provide insurance for. The new package available to us is designed specifically for a doctors private practice work, providing medical indemnity (also known as medical malpractice) insurance for this work that is not covered by NHS indemnity.

To obtain a quotation please click here.

A brief summary of the benefits are:

  • Various levels of indemnity
  • Cover claims for clinical negligence
  • A Claims Made policy
  • Libel & Slander cover
  • Breach of confidence cover
  • Defence costs, including GMC proceedings
  • Professional Indemnity cover for review boards and expert reports
  • 24hr Medico-legal helpline and claims reporting
  • 10 years run-off cover at expiring limit of indemnity, plus a further 10 years at £1 million in death or permanent retirement
  • Legal expenses insurance for disciplinary non-clinical matters including the NHS
  • Good Samaritan Acts worldwide

Locum costs spiral due to shortage

Medical Insurance Consultants recently contributed to an article written by Pulse outlining the increasing costs of obtaining a Locum GP. Pulse selected MIC, due to our specialism and long standing in the field of Locum Insurance cover, to understand how the fee’s charged have increased quite dramatically over recent years.

What do you think of the costs of Locums in your area and is there anything we can do to help make the process smoother when claiming?

To read the article visit the Pulse website or click here.

Welcome to the MIC blog

Welcome to the MIC blog where we will be talking about all things relevant to the insurance needs of healthcare professionals, including:

We will also be looking at issues raised by our clients, regulatory bodies and the insurance industry to give a better understanding to all.