Medical Indemnity
The medical indemnity provided by a medical defence organisation (MDO) is different from an insurance policy arranged by Aon.
Of course, both types of indemnity exist to provide doctors, consultants, and surgeons with protection should they be the subject of a complaint, claim or regulatory matter.
The differences between the covers lie in how they provide this protection; the two biggest areas relate to an MDO offering occurrence-based discretionary cover, compared to the contractual claims-made cover from an insurer.
Discretionary Cover vs Contractual Cover
Let’s take discretionary cover first – this means the MDO will apply their discretion as to whether they support a request for assistance regarding a matter at the time it is made, offering no certainty that the organisation will pay out.
Contractual cover, however, clearly says what is covered and what is excluded before you buy the policy. Effectively it is guaranteed cover within the terms of the policy, providing a doctor with greater certainty.
Occurrence-Based Cover vs Claims–Made Cover
Turning to occurrence-based cover – again a feature of cover from MDOs – this means (for most memberships) the subscription charged covers all matters and claims relating to incidents that happened during the membership year, regardless of when they become a claim and whether the doctor is still a member of the MDO. That means it’s not necessary to report any incidents until they become a claim.
Claims–made cover responds to any claims or adverse incidents that happen and are reported during the policy period, which means it is important to notify your broker or insurer right away of any incidents that you think could become a claim.
Retroactive cover and Extending Reporting Periods are also offered to provide long term protection. An advantage of claims-made cover is the proactivity needed around early notification of a potential incident.
It provides an opportunity to mitigate the issue or prevent the complaint from becoming a claim – this makes for an important alignment of interest between you and the insurer.
Comparing MDO Membership with Medical Indemnity Insurance arranged by Aon
The above outlines two fundamental differences, but they also vary in other areas:
| Medical Indemnity Insurance Policy | (MDO) Membership | |
|---|---|---|
| Regulated by the Financial Conduct Authority (FCA) & Prudential Regulation Authority (PRA) | Yes | No |
| Clinical Negligence /Medical Malpractice cover | Yes – contractual to a limit (see insurance schedule) | Yes - at their discretion (see provider information for any limits) |
| Regulatory Support & Representation | Yes | Yes - at their discretion |
| 24-hour Medico-legal support | Yes | Yes |
| Public Liability cover | Yes | No |
| Data Liability cover | Yes | Yes - at their discretion |
| Reputation Protection | Yes | Yes - at their discretion |
| Vicarious Liability | Yes | Yes - at their discretion |
| Loss of Earnings Whilst at Court | Yes | No |
| Claims of Discrimination | Yes | No |
| No Claims Rewards | Yes | No |
| Complications cover (financial recompense for a known surgical complication) | Option to include | No |
| Financial Protection should the indemnity provider enter financial difficulty | Yes. Financial Services Compensation Scheme | No |
| Right of Redress | Yes. Financial Ombudsman Service | No |
Choosing the Right Cover for you
Following the Paterson Inquiry, the UK Government ran a consultation about the most appropriate clinical negligence cover for medical professionals.
In December 2021, their response to this consultation said their preferred option was: “To change legislation to ensure that all healthcare professionals not covered by a state-backed indemnity scheme hold appropriate clinical cover that is subject to appropriate supervision – in the case of UK insurers by the Financial Conduct Authority and Prudential Regulation Authority.”
Insurance policies such as the Medical Indemnity Insurance which are regulated by the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) provide extra reassurance and peace of mind that the policy will respond should you need it.
To discuss any of the issues raised in this article, please contact the Medical Indemnity Team on 0330 912 0684.
Medical Indemnity Insurance is arranged by Aon UK Limited and underwritten by Everest Insurance (Ireland), DAC.
Aon UK Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales. Registered number: 00210725. Registered Office: The Aon Centre, The Leadenhall Building, 122 Leadenhall Street, London EC3V 4AN. Tel: 020 7623 5500. FP.SUR.2024.4.SEC
Whilst care has been taken in the production of this article and the information contained within it has been obtained from sources that Aon UK Limited believes to be reliable, Aon UK Limited does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the article or any part of it and can accept no liability for any loss incurred in any way whatsoever by any person who may rely on it. In any case any recipient shall be entirely responsible for the use to which it puts this article.
This article has been compiled using information available to us up to 15/02/2023.