Holding Professional Indemnity insurance might protect you from the financial implications of something going wrong, but sound risk management and seeking advice from relevant professionals may prevent many types of claims in the first place. An effective way to keep risk management front of mind when running a business is by examining previous claims and identifying areas which may have prevented them. So, in this article, we’ve examined a real-life claim of an Aon client, and unpacked some of the learnings which can be adopted.

Gerry the Chiropractor

Gerry was a chiropractor who ran his own practice. He hired Sam as a contractor to work at his clinic. Lee was a regular patient at Gerry’s clinic for a few years, and was treated by Sam, during one of his sessions Lee told Sam about some other problematic symptoms. A few years later however, Lee was diagnosed with a serious health condition which was likely to cause his health to deteriorate substantially. Lee took legal action against Sam and also against Gerry’s clinic as he believed they’d been negligent in not referring him appropriately when hearing of his symptoms. And although Lee was treated by Sam, Gerry as the practice owner was also brought into the legal action for several reasons.

While Gerry’s situation may appear just like any other claim, or even bad luck, there are some areas where some due precaution may have helped to prevent the claim, or limit Gerry’s liability or possibly even prevent Gerry from being found liable in court as a result of the services provided by the contractor. Here are some of the areas:

• Hiring a contractor

  When hiring a contractor, it is important to ensure there is a contractual agreement set up properly that identifies the practitioner as an independent contractor, rather than an employee. It’s also important to pay attention to how you pay your contractor, as this can also contribute to determining whether the practitioner is a contractor or employee. The contract should set out the terms and conditions, including the responsibilities of the contractor, the practice guidelines the contractor is required to adhere to (making them available to the contractor at all times), any induction training that is required and detail that any updates to the practice guidelines or training requirements that may arise during the term of the contract must be followed. Speaking to a qualified employment lawyer can help make sure you get these points right from the beginning and prevent blurred lines in terms of liability.

  It’s also important to ensure your contractor is meeting insurance requirements. The contract should specify these obligations, including the requirement for Public & Products liability and Professional Indemnity insurance. In addition, be sure to also request evidence of insurance on an annual basis. Although this may not stop a practice owner being included in legal action, it does help to manage risks by clearly articulating each parties’ roles and responsibilities.

• Internal processes

  Internal processes are a significant aspect of risk management, but the exact way in which they’ll impact your risk management, and what best practice looks like will vary based on your industry and profession. For example, if your business is in the health industry, there should be a clearly defined process for referring clients who raise red flags when advising of their symptoms, as well as a process for obtaining informed consent before treatment. Other examples of internal processes which can play a role in preventing allegations of professional negligence include appropriate administration; storing of personal information; ongoing training of employees; and processes for dealing with complaints. Remember it’s not only important to address all of these important business processes with your staff and contractors, it’s also very important to be able to show how and when you provided the information.

• Record keeping

  With everything being digital nowadays, record keeping may have become less of a focus, but the importance of it cannot be underestimates. If your business does suffer an allegation of negligence, one of the most important factors in determining how well you’ll be able to defend your case is in the integrity of your records. Your businesses records and robust record keeping practices can enable your legal team to defend your case with confidence. It also makes a big difference in the event of a complaint and subsequent investigation from a regulatory body. Also bear in mind that your clinical notes will have more validity the closer they were written to the date the treatment was provided.

While insurance can help cover the financial impacts of a Professional Indemnity claim, when it comes to these types of claims, prevention is especially important. This is due to the nature of Professional Indemnity claims, where your reputation and the trust you’ve built up with your clients can quickly crumble with one allegation of negligence. Years of work in building your reputation can be undone from one Professional Indemnity claim, and this is something that cannot necessarily be repaired with financial assistance.