The ownership and business (legal) structures of healthcare companies and medical and midwifery practices have undergone significant change over the years with many traditional “sole trader” practices disappearing from the landscape.

Larger practies with complex corporate structures are now more common.

Such changes in structure and ownership create legal implications for those who own and operate these organisations. They simply cannot rely on the personal medical / professional indemnity arrangements of their doctors (or eligible/endorsed midwives as the case may be) to protect the healthcare company practice or midwifery practice and their staff against claims where the allegations are not specifically aimed at acts, errors and omissions attributable to doctors or eligible/endorsed midwives.

There are a number of circumstances that can lead to claims being made against an entity (a healthcare company, medical or midwifery practice) for which they can be successfully sued.

Some examples of these involve claims arising from:

  • breakdowns in (internal or external) communications or procedures causing or contributing to an adverse patient outcome
  • vicarious liability for the conduct of employees – administration staff, healthcare professionals (eg nursing and technical), doctors and eligible midwives
  • consultations and procedures undertaken by practice staff
  • contribution being sought by the insurers of doctors alleging a claim against a doctor was caused or contributed to by the healthcare company or practice where they were providing services
  • complaints including in relation to billings, investigations, inquiries (including coronial inquiries)
  • Privacy breaches
  • Employment and workplace disputes (eg discrimination, harassment, bullying, breach of contract etc)
  • A claim made against a doctor working in the practice in circumstances where they had not consulted the patient i.e. treatment administered by a nurse or allied health professional.

Increasingly, healthcare companies, medical and midwifery practices are obligated to effect and maintain healthcare professional indemnity insurance as part of the contractual requirements with third parties in providing healthcare services e.g. the provision of contracted emergency services in hospitals

If they have not already done so, healthcare companies, medical and midwifery practices should seriously consider arranging separate professional indemnity insurance in their own right. Doctors and midwives must not assume their own medical or professional indemnity insurance will provide protection beyond a claim made specifically against them.

MIGA’s Healthcare Insurance policy has been specially designed to cover the professional indemnity exposures faced by healthcare companies, medical and midwifery practices. We also offer risk management support services to help identify gaps or risks in how healthcare services are provided and a vast range of risk management education and resources.

Issues around insuring healthcare companies, medical and midwifery practices can be extremely complex.  MIGA’s staff are able to provide personal advice so we can assist you with your requirements for Healthcare Professional Indemnity Insurance. Simply call us on 1800 777 156.

Information in this article does not constitute legal or professional advice. Call us if you need assistance in relation to any of the issues covered in this email.  

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