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New Indemnity Insurance Arrangements? Watch Out!

on Wednesday, 31 October 2018.

GP practices will be aware that their medical indemnity costs are going to be covered for them from 1 April 2019. This is a welcome move and will certainly save costs for partners.

Additional insurance still needs to be held though - and practices should be more wary than ever about whether partners are covered on an "occurrence basis" or a "claims made" basis.

Certain activities won't be covered by the state-backed scheme; from 2019 practices will still need their own insurance for any non-NHS work, and it is still important to have legal expenses cover for criminal or GMC investigations.

More importantly, what about claims arising from treatment that happened before 1 April 2019? At time of writing, it is not clear whether the state-backed scheme will cover such claims - and if it doesn't then what is known as "run off cover" may need to be purchased. Whether partners need it or not depends on whether they currently have an "occurrence based" policy or a "claims made" policy. The difference between the two is crucial.

Occurrence Based Policies

"Occurrence based" insurance policies are generally more expensive, because they provide cover "forever" - i.e. if you are insured today, then whatever you do today is covered, no matter how long in the future an issue arises. So even if the state-backed scheme doesn't provide cover for pre-April 2019 treatment, a partner who has had an "occurrence basis" policy will have cover for those past events.

Claims Based Policies

"Claims made" policies on the other hand work very similarly to your car insurance. If something happens while you have an insurance policy, you can claim on it but if you have a prang after the policy has finished, you aren't covered. These sorts of policies are generally cheaper. The problem is: what happens if you cancel the policy in March 2019 and a claim comes in for something that happened in, say, back in 2017? The insurers will point out that their policy no longer covers you. In this situation the individual would need to ensure he or she has "run off cover" - i.e. a policy which specifically protects against pre-April 2019 claims which come in after April 2019.

Best Practice

Those who are considering mergers at the moment should also check the insurance policies of the partners of the other practice(s)). Are they "claims made" or "occurrence basis"? If the other partners have "claims made" policies, then you should consider whether to insist on run off cover (for the protection of all). The partners should consider how the cost of that run off cover is borne.

We recommend speaking to a specialist healthcare lawyer and/or your PI Insurer for further guidance.


For more information, please contact Oliver Pool in our Healthcare team on 0117 314 5429.