FAQ’s medical indemnity
Frequently Asked Questions
- The Defence Organisations have been around a 100+ years and have offered good service but like many things in the medical world things have changed.
- Medical claims inflation has been running at over 10% per annum due to many factors including, increasing litigation from no win no fee lawyers and the increasing pay-outs on medical negligence claims.
- This has led to a steady, sometimes unaffordable, increase in annual subscriptions which is likely to likely to continue meaning annual 10% increase in Mutual subscriptions meaning they will double every 7 years! It’s unlikely your fees will perform so spectacularly!
- MDOs generally select an income level and pair that against a speciality arriving at an annual subscription, Insurers assess the risk individually, taking into account speciality, the number of procedures, the type of procedures, past claims record. Also, they look at the clinical environment you work in and reward excellence – the combination of individual and hospital clinical excellence regularly result in savings of up to 25%
Absolutely not. We offer an individual and personal service. We will ask you to complete a proposal form and all negotiations are dealt with on a one to one basis, not only with direct communication to you but a discussion with the insurer on the merits of your submission to maximise the discount on your premiums.
- We are FCA regulated and all information you give us is between you and us and is privileged. We will not share this with anyone without your explicit permission.
- One common myth is that if you change to insurance your Defence Organisation will not pay any claims that arise from the past when you were a member. This is a total fallacy. One of the few areas a Defence Organisation states what it will do in writing can be found in its Articles of Association, For example, The MDU s wording is as follows:
“To indemnify wholly or in part and on such terms and conditions as may from time to time seem expedient any member or applicant for election to membership or former member of the MDU”
- We have underlined the relevant part. They will never turn down a claim solely on the basis you are no longer a member.
- An insurance policy is an annual contract on a claims made basis. It gives you legal rights enforceable in law. It will pay a claim made during the current period of insurance irrespective of when the procedure took place. It will have a cut off retroactive date usually the day you change from a Defence Union to an Insurance contract, this is to avoid dual cover and unnecessary expense.
- Insurers will never do this, they are regulated not only by the FCA but internally by shareholders, reinsurers and external organisations such as Lloyds and indeed ourselves, your broker who always act in your best interest, not that of the insurer.
- This principle is enshrined in law and we are legally obligated to look after your best interest. They will always give a true costing of the risk at current commercial terms that are deemed to be viable and realistic. Insurers have reputations which go back over 300 years to protect and any insurer engaging in this type of practice would soon be undone.
- You are always free to change to any provider and we will advise you, at no cost, on all the issues you need to consider which will depend on your specific circumstances at the time. It is also incumbent on your new indemnity provider to give you advice and offer retrospective cover where necessary.
- Switching from one insurance policy to another is simple; the new policy will pick up all past incidents by extending the ‘Retroactive’ date.
- If you are returning to the discretionary occurrence type cover offered by the MDOs they have in the past offered retrospective cover at no cost but this is a decision for them made at the time of the switch.
- Extensive research and consultation has gone into setting this level of indemnity and it is under constant review – indeed if any individual believes this not to be sufficient then higher limits can be purchased at reasonable cost.
- The Policy includes automatic Run-off cover for all policyholders in the event of Death, Permanent Disability or Permanent Retirement.
- Evidence from actuary’s show the vast majority of claims are reported within 7 years of an incident occurring and the risk a claim is reported after that falls significantly. It would be fair to assume that with an increase in litigation caused by lawyers harvesting claims this figure could be expected to fall.
- It is about getting the balance right between offering security at the right cost – if insurers extend the run off then they have to commit capital (whether it is required or not) to paying potential claims, which means the cost of the initial premium rises. Insurer say 10 years is the right balance but this is constantly under review.
- 01494 387 800
- Medical Broking Company
Buckinghamshire HP7 9LP
“Medical indemnity is not something you get particularly excited about, and for most of us it is something we think about once a year when it comes to renewal. However with an ever more litigious society it is more important than ever to think about what indemnity you have in place to protect yourself and your reputation. I have been with MBC for a number of years and have found them to be extremely professional and excellent at what they do, so when they launched their medical indemnity product I was curious to see what it would offer. The policy is more comprehensive than the one I had and cheaper. They were extremely helpful. I couldn't recommend them highly enough”