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Coronavirus necessitates a review of your client’s medical professional indemnity cover

24 May 2020 Gareth Stokes

South Africa’s professional medical practitioners should review their professional indemnity cover to better understand their risk exposure linked to practicing during the COVID-19 pandemic. As the country’s confirmed coronavirus cases exceed the 10 000 mark, it is increasingly likely that doctors and other medical professionals will be called upon to offer medical assistance outside their main areas of practice. They will also have to ensure that they adhere to coronavirus safety protocols and that any medical advice they give appropriately reflects the heightened risk to their patients during these unusual times.

Medical professional indemnity (PI) cover is available to most private sector medical practitioners who are registered with the Health Professions Council of South Africa (HPCSA) – and there is broad consensus that PI cover is a necessity even though there is no legislation that makes it mandatory. The two main indemnity products are offered on an occurrence-based or claims-made basis. “Occurrence-based cover is what most practitioners aspire to have,” says Alex Brownlee, Head of Actuarial Services at Constantia Insurance, provider of the only occurrence-based medical indemnity product by a registered financial services provider in South Africa, via its EthiQal division. 

Occurrence-based versus claims-made

Occurrence-based cover performs for the life of the insured for any claim related to an incident during the policy period, even if the policy was subsequently terminated. A claims-made policy covers the insured for events during the period of cover and is therefore offered at a cheaper premium; but can lead to gaps in cover when the insured changes scope of practice, moves from one insurer to another, or retires from practice. Regardless of the cover type, the premium is strongly correlated with the main area of practice, or scope of practice, indicated in the policy schedule. 

Insurers are exposed to significant risk when underwriting medical PI due to the high value of individual claims, which can exceed R15 million. This explains why many insurers have exited this field in recent years, and why those that remain, often limit their total exposures by avoiding riskier medical practices such as obstetrics and gynaecology, and neurosurgery. Cover is still available locally from insurers and underwriting management agencies (UMAs) such as EthiQal, Genoa, itoo, and PPS. It is typically distributed by brokers that specialise in this category of insurance, including Aon South Africa and Natmed Medical Defence. Another alternative available to medical professionals is to approach the Medical Protection Society, an offshore medical defence organisation that offers discretionary cover. 

The need for PI cover becomes clearer when we consider the malpractice lawsuit risks faced by allied healthcare professionals at both private and public healthcare facilities. “Employees at public hospitals do not need to get professional cover because they are indemnified by the State – claims are lodged against provincial MECs based on the vicarious liability of the doctors and nurses they employ,” says Donald Dinnie, Insurance Litigation Director at Norton Rose Fulbright. 

Medical specialists not covered on hospital cover

The general staff, including nurses, employed by private sector hospitals are covered under the hospital’s insurance cover. “GPs and other medical specialists would have their own PI cover, as they are independent practitioners and may not be employed by hospitals in accordance with regulations and ethical rules,” confirms JP Ellis, Head of Legal and Claims Management at EthiQal. It is common practice for aggrieved private sector patients to name multiple defendants following in-hospital events, including the hospital and various independent practitioners involved in their treatment. “To avoid unnecessary preparation and defence costs, there is a trend towards collaboration between the various insurers associated with such cases via their insured, to reach agreement on specific aspects, wherever possible, outside of the courts,” says Ellis. 

The correlation between medical PI insurance premiums and ‘scope of practice’ raises some concerns for doctors and other healthcare professionals who may be called on to assist with patient treatment during the COVID-19 pandemic. Dinnie recommended that all medical insureds review their PI policy wordings to avoid possible complications should a claim arise. They should check their policy schedules for any limits or restrictions imposed by the business and practice formulations on cover – and double-check for any epidemic or pandemic exclusions. According to EthiQal, their policyholders currently enjoy cover in the event private practitioners agree to step in to provide essential care outside of their usual scope of practice, for a limited period, and if required as a direct result of the pandemic. 

“Medical specialists may be covered if they act outside their standard practice and provide COVID-19 assistance under the HPCSA Scope of Practice extension; but it certainly pays to keep the insurer informed of any changes and ensure that the practice description includes COVID-19 care – especially if your area is neurosurgery and you are roped into pandemic triage at a base hospital,” says Dinnie. 

Deviating from standard care

There are other risks that brokers should inform their medical PI clients about. “Negligent conduct requires a deviation from the standard of care that would be expected of the reasonable medical professional, given the circumstances,” says Dinnie. “The biggest exposure to a medical specialist during the pandemic is from proceeding with surgery without due consideration for a patient’s comorbidities and the risk of infection”. It is more likely that a COVID-19 negligence claim will stem from the insured’s failure to get proper informed consent from his or her patient, including warning the patient of the heightened risk of the treatment during the pandemic, than for mistakes made while administering the treatment. 

It is not clear how medical malpractice claims will evolve due to the COVID-19 pandemic. EthiQal argues that the reduction in the performance of elective procedures during the period of the lockdown will not necessarily reduce the risk for insurers, because the period is simply too short for it to have a meaningful impact. “We could potentially also see different claims due to doctors stepping outside of their usual scope of practice; delays in preventative care or a breakdown in the continuum of care; the risk of patients being infected with the coronavirus within the hospital setting and suffering poor outcomes; and a potential increase in in-room procedures as doctors cannot get access to hospital facilities,” says Dr Bettina Taylor, Risk Management Specialist at EthiQal. 

Prevention is better than cure, always

Private hospitals and other medical facilities are at heightened risk if they fail to put pandemic protocols in place or fail to adhere to the protocols so implemented. From an insurer perspective the trick to limiting medical PI claims exposure is to prevent claims from occurring; and if a claim does happen, to be as well prepared as possible to successfully defend against it. “Insurers have sophisticated risk support programmes in place, whether for hospitals or doctors, to limit the risk of third-party claims materialising,” concludes Dinnie. 

Writer’s thoughts:
Today’s article about medical professional indemnity cover barely touches the surface of this complex field. Medical specialists in private practice face an ongoing, uphill struggle to provide cost effective services while their risk covers become more and more expensive. Do you have experience in placing medical PI cover in the domestic market? If yes, then do you believe there is enough competition in this niche cover category? Please comment below, interact with us on Twitter at @fanews_online or email me us your thoughts

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