As a health professional, you may hold a number of insurances, including professional Indemnity insurance. We explained a few important features of Professional Indemnity insurance in this article previously. The aspects of PI we spoke about in our previous article can all be related back to one important feature of the cover – the fact that it is a ‘claims made’ policy. So what does this mean, and why is this important to understand? We explain below, including your requirement to notify of potential claims or complaints.
What does claims-made mean?
A policy being claims-made means that the policy must be active at the time a claim is made. It is not enough for the policy to have been active when the incident occurs/ed. For example, say you’ve now retired or are no longer practising. A former client of yours may have since received further treatment or started seeing another practitioner, but due to persisting issues, they believe that the treatment you provided them with years ago has ended up having a detrimental impact on their health.
In this scenario, this former client may take legal action against you for the financial compensation, and allege professional negligence on your part. For this claim to be covered under a professional indemnity policy, your coverage must be active at this time (i.e. when the claim is made) – even if you’re no longer practising.
This is different to most other types of insurance policies, where incidents which occur during the time the policy is (or was) active are covered regardless of whether the claim is made later.
Why are PI policies claims-made?
The reason for PI policies being issued on a claims-made basis comes back to the nature of the services provided by businesses that take out PI. Health professionals, lawyers, accountants, PR agents are just some of the professions that may take out PI. Such services involve providing advice that is specialised, and often personalised to individual clients.
The services can also have long-lasting implications – even if a client is seemingly happy with service today, it is possible that a few months (or even years) down the track they may come to a different conclusion and pursue legal action. This is why PI needs to be in place at the time a claim is made, to ensure the claim can be insured without any gaps or administrative challenges related to the claim under the policy.
When should I notify my broker?
We’ve also previously explained that when it comes to making a claim under Professional Indemnity, you’re required to notify your broker as soon as you receive a hint that a client may pursue legal action or make a complaint. This might even be as simple as a client mentioning they’re going to make a complaint against you. If you become aware of a potential claim and do not notify your broker, this may affect the coverage of the claim under your policy, or worse, leave you uninsured altogether.
Note: If you have the Aon Health Combined Professional Indemnity and Public & Products Liability Policy the requirement to notify of incidents that may lead to a claim also applies to the Public & Products Liability Insurance section of the policy. If you have any questions or would like to discuss further, please contact the experienced specialists in our Health team on Call us at 1800 805 191 or email email@example.com
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