Are you meeting AHPRA's indemnity requirements?

What happens if I don't have adequate indemnity cover?

Healthcare practitioners in Australia are not allowed to be 'under-insured' as this contravenes the AHPRA registration requirement for practitioners to have appropriate indemnity cover for their current and past practice.

That is why holding retroactive cover that is appropriate for past practise undertaken (including jurisdiction and appropriate practice category) and on cessation of practice maintaining appropriate run-off cover is as important as ensuring appropriate indemnity for current practice. Failure to do so means non-compliance with AHPRA requirements.

For healthcare indemnity, it's unlikely that the aggregate claims policy limit offered by AHPRA recognised organisations such as MIPS will be exceeded noting that medical practitioners also have access to the government's 'Exceptional Claims Scheme' for amounts greater than $20m. However, there are a number of situations that might lead to non-compliance with AHPRA registration indemnity requirements.

For example, a failure in duty of disclosure can lead to inadequate insurance and potentially no indemnity at all for matters that arise from prior known but not disclosed events or where the non-disclosure is material to the insurers' decision to offer insurance and the terms and conditions of that offer.

Also, failure to accurately advise an insurer of the nature of your current and past practise for which you are seeking cover may mean that subsequently you may not be covered should claims that arise from that non-disclosed practise. 

As well as the financial costs to a practitioner of such a situation it also means that there may be questions in respect of compliance with AHPRA registration requirements. For some who short-sightedly may be gaming the system to try to minimise financial costs of their cover the outcome may be financially disastrous and in addition imperil their AHPRA registration.

It is also important to remember that if you mislead your insurer deliberately or even possibly accidentally, your insurer may have grounds to reduce the cover you receive or even refuse entirely in the event of a claim. This may apply for example, if you:

  • advised your insurer you are not doing any cosmetic procedures when this is not true;
  • deliberately under-estimated or understated your gross annual billings to reduce your insurance costs;
  • maintained a membership classification that does not reflect your practice (such as non-procedural GP, rather than procedural GP);
  • practised primarily in a state/territory other than what you stated and previously undertook higher risk clinical practise for which you are seeking retroactive cover but do not disclose that practise. 
  • To ensure you have appropriate cover it is always best to be honest and provide detailed disclosure to your insurer when applying for insurance, renewal or variation. 

    Healthcare indemnity insurers may take several actions if you are inadequately or inappropriately insured in the event of a claim. These may include:

  • agreeing to cover you for only a partial amount of the damages or costs, which means you’d need to pay a portion from your own pocket;
  • requiring you to make a back-payment for all the periods when you selected a lower cost but inadequate membership category including all prior periods before reported claims are accepted.

    For all MIPS members, the duty of disclosure requirements are provided in the Membership Benefits Handbook:
    “If you fail to comply with your duty of disclosure this may affect your entitlement to cover under MIPS Protections and the insurance policies. MIPS may be entitled to refuse or withdraw cover under MIPS Protections or cancel your membership, or both”.
    If you are unsure if your MIPS membership is in the correct classification or you have provided sufficient detail about your practice, you may contact MIPS Member Services to seek general advice.
     
    Disclaimer The materials provided are for educational purposes only. Whilst all reasonable care has been taken in preparing these materials, including the accuracy of the information supplied, MIPS does not accept any liability whatsoever arising out of the use or reliance of the information provided. 

     

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