Health is big business in Australia; in fact, by some measures, it’s the biggest.
Almost half a million Australians are employed in healthcare, with numbers increasing rapidly. Between 2006 and 2011, the number of health workers increased by 22%, or more than three times the rate of population growth. And as Australia gets older, more and more healthcare will be required.
As much as therapies and their practitioners have proliferated in the face of public demand, so to has their drive to professionalisation and regulation – statutory and/or through peak bodies – and their exposure to risks inherent in the provision of their services. In mid-2010, 14 health professions became regulated by nationally consistent legislation and the Australian Health Practitioner Regulation Agency (AHPRA) registers practitioners, receives public complaints about them, and can investigate their professional conduct, performance or health, so insurance for these practitioners has evolved.
The most obvious and important exposure for a health practitioner to insure is a claim against them as a result of their professional services, which is where professional indemnity (PI) comes to the fore, says Michael Gottlieb, Founding and Managing Director of Bizcover, which offers both PI and public liability cover to more than 200 health disciplines.
Between 2006 & 2011,
the number of health workers
increased by 22%
“PI cover differs from public liability cover in that the standard of care owed when providing a service will be governed by the provider’s profession, and will be higher and more specific than that ordinarily owed by members of the public to each other, regardless of the job they do,” says Gottlieb, who explains that a practitioner burning a patient with a therapy would involve PI, while a patient falling in the practitioner’s premises could trigger a public liability claim.
Clinton Ruddick, National Product Manager – Professional Liability for QBE Australia, agrees. “PI is arguably a health professionals’ key insurance class and should be carefully constructed to dovetail with public liability insurance to allow for comprehensive protection.”
Ruddick explains that PI products have developed from basic insuring clauses, such as ‘negligence’ and ‘any act, error or omission’, to ‘wrongful act’ and broader civil liability. “There are also wordings that have been tailored to specific industries and associations,” he adds.
People don’t tend to sue their life coach or flower essence therapist.
General practitioners, usually the first port of call for people when not seriously ill or injured, have the highest professional bars to reach and carry the lion’s share of risk for claims of malpractice, a subset of PI. Failing to physically examine a patient properly, ask the right questions or keep the appropriate records can lead to missed or incorrect diagnosis, and not referring the patient to an appropriate specialist or other professional to diagnose and/or treat constitute breaches of their duty of care. Patients can take their own civil action for what they perceive to be negligence or incompetence but can also report professional misconduct to state-based medical boards, healthcare complaints commissions and AHPRA.
Paying the price
Medical practitioners are exposed to risks from their patients but also Medicare Australia, which effectively subsidises payment for their professional services. Overservicing, or providing consultations that fall too far outside the statistical mean in terms of length, type or frequency, can attract the attention of the Commonwealth’s Professional Services Review and result in costly and highly stressful audits 0f their practice, penalties and legal action.
“Insurance for medical practitioners, as defined in legislation, can only be provided by specific medical indemnity fund insurers,” says Ruddick. “This leaves all other health professionals to choose from the range of bespoke wordings available in the traditional PI market.”
Hospitals, healthcare centres and nursing homes need to consider operational coverage for the management of all services provided by the facility as a company, and also extended cover for vicarious liability associated with malpractice of visiting medical professionals, Ruddick adds.
Each profession comes with different levels of clinical responsibility as set out by their professional peak bodies, and each has risks specific to it that requires the appropriate insurance mix. For instance, a Chinese medicine practitioner who practises acupuncture has risks such as unsterilised needles spreading blood-borne communicable disease, while a herbalist has the risk of poisoning a patient with incorrect or contaminated herbs, and a masseur faces risks around claims of sexual misconduct and inappropriate body contact. All complementary practitioners are exposed to risk if they fail to refer a patient to a medical professional for treatment of a serious or life-threatening illness.
Broker’s role not broken
Ruddick says that PI is currently sold online in many forms – direct, intermediated and via aggregator sites – so clients have freedom to choose the distribution channel they prefer and level of advice they require.
Working with former patients
“In our experience, most associations still rely heavily on broker advice. Many will take advantage of group buying power using this advice, combined with other services such as membership and risk management,” he says.
“We are also seeing a growing trend for large associations to manage their own risk. Pooled industry schemes have some distinct advantages as they enable broad coverage as well as the ability for insurers to maintain the most efficient pricing and claims trend feedback.”
Most complementary practitioners now go online to seek PI cover because premiums are cheap and the risks don’t need much underwriting, says Michelle Govier, PI Specialist at Eagle Insurance, which has about 450 on their books.
“It’s a low-risk area and in four years we’ve not had one PI claim, as the claimant has to have suffered economic loss or physical injury – people don’t tend to sue their life coach or flower essence therapist,” she says.
Eagle’s portal has a three-step application process with premiums based on income level and in which state the practice is located. This secures a combined package of coverage for PI, PL and goods sold and supplied, defence costs and expenses, defamation, Good Samaritan acts and locums.
“Traditionally, insurance companies don’t sell PI direct but through a broker because some advice needs to be given. I’m a broker so I still control the application process, however, and manually place it with the insurance company and issue documents,” Govier says.