Occurrence Based Indemnity vs.

Insured Indemnity: The Ongoing Debate

On the 1st April 2013, the MDU announced that they would no longer be renewing policies of insurance for members medical malpractice indemnity that were due to expire. Instead, they would be returning to discretionary cover on an occurrence basis. From April 2000, the MDU promoted indemnity based around an insurance policy, underwritten by third party insurers on the basis that this provides the best security and value to members stating, ...insurance policies and regulation provide the best security for doctors, which is better than anything else on offer so it brings to mind the question; why have they switched back to what they were so insistent was not adequate for medical professionals? Since 1885, indemnity for clinical negligence has been provided by the three major Medical Defence Organisations (MDOs); the Medical Defence Union (MDU), the Medical Protection Society (MPS) and the Medical and Dental Defence Union of Scotland (MDDUS). For over a century, all three organisations provided indemnity to members on a discretionary basis, sometimes referred to as occurrence-based indemnity. As the word discretionary would suggest the policy worked in a way that could allow more freedom in assisting doctors and could assist in the unusual circumstances/cases. However, what many didnt realise was that as a member, the only entitlement you had was to ask for assistance, but there was no entitlement to or guarantee of the assistance. Doctors who rely on discretionary indemnity have no contract and no written or other undertakings that they will be indemnified if a patient makes a claim. Those who rely only on discretionary indemnity will not know until they ask for assistance with a claim whether they will be indemnified and to what extent. And even while a doctor is being assisted, the defence organisation has the power to limit or withdraw the assistance at any time without explanation. In April 2000, the MDU, the largest of the MDOs who had historically offered discretionary indemnity, changed their indemnity to an insured basis in a move that was described as quite clearly the right thing to do by the CEO. The MDU then spent years highlighting that the UK was the only country to offer discretionary indemnity and that we should fall into line with other EU member states, Australia and the USA by making insurance mandatory. In the early 2000s in Australia, a discretionary indemnifier went into provisional liquidation and the Australian Government responded quickly by passing legislation making discretionary indemnity unlawful; the worst scenario that shows a risk with discretionary indemnity. Insurance policies provide a contractual guarantee to pay, subject to terms and conditions, allowing you to continue practicing without worrying whether your indemnifier is going to support you. Offering an insurance policy means that members are entitled to receive assistance under the terms of the policy and not just to ask for it. As many Insurance policies are provided through a Lloyds of London Underwriter, many of them are backed by the Lloyds Central Fund. Further, insurance policies are provided by companies regulated by the Financial Conduct Authority and brings with it protection for the policy holder through the Financial Ombudsman Service and the Financial Services Compensation Scheme. Insurance policies for Medical Malpractice Indemnity are becoming increasingly popular with more and more companies coming to the market in the last three years. Many of these are now trying to compete with the MDOs by promoting cheaper premiums but still not providing the correct level of cover. SEMPRIS is the only Insurance policy for Medical Malpractice Indemnity that provides all the benefits of an insurance policy with indemnity limits higher than any other and will indemnify members for claims brought against them by a sports persons club, employer, agent, sponsor or event organiser alleging negligent treatment. Market research has also shown that the majority of our members who have switched from a MDO have seen a significant saving in their premium.