Are You One of the 80% of Surgeons with Inadequate Indemnity Insurance?

11 October 2023

We take out indemnity cover for a reason. We want to protect our income, and thus our homes, families and lives, in the event of a compensation claim. However, a Russian roulette of policies from unscrupulous indemnity insurance providers combined with a steady increase in litigation in the private sector leaves both surgeons and patients abandoned, with nowhere to turn.

The GMC requires all doctors and surgeons to have adequate protection in place to allow them to practise in the UK, which theoretically covers both the patient and the practitioner. However, providers are largely unregulated with no external accountability or scrutiny, leaving it to their discretion as to whether they pay out or not. And although practitioners are covered by NHS indemnity, many aren’t aware that this cover does not extend to locum work, ‘Good Samaritan’ acts, or private practice.

It’s estimated that up to 80% of clinicians rely on medical defence organisations (MDOs) to bridge this gap, often paying substantial fees over many years to protect themselves and their patients. Shockingly, some of these conventional providers are not public bodies, nor are they financially regulated and are thus not accountable to any external scrutiny . Not only do they hold ‘discretionary’ power as to whether or not they pay out a claim, but they are not obliged to reveal reasoning or statistics behind their decision-making., even when under a Freedom of Information request.

This situation places both practitioners and patients in a state of uncertainty. On one hand, practitioners who rely on these traditional providers may not have the expected coverage. The discretionary power held by these providers means that practitioners face the possibility of losing assets, such as property (if they have any), or being left vulnerable without proper protection. On the other hand, patients are greatly affected by this gap in coverage, as it prevents them from receiving the necessary compensation and exposes them to lengthy and costly legal battles. Without adequate cover, patients may have to wait for years to receive any financial restitution, all while dealing with the potentially life-altering effects of the incident that led them to seek legal action. This dual impact on practitioners and patients highlights the profound consequences of the current system.

We’re all guilty of skipping over the small print when signing contracts, but when your livelihood is on the line, it is crucial to take note of the terms and conditions of your indemnity cover. The word ’discretionary’ is key. Wherever this term appears, there’s likely to be a clause protecting the company from paying out. Understanding the implications of this term is crucial to ensuring you are adequately covered.

Contractual v's Discretionary cover

Essentially, there are two types of indemnity cover: contractual and discretionary. Contractual indemnity is by far the superior — it is closely monitored by financial authorities, ensuring that it operates with transparency within the parameters of the contract. This type of indemnity cover offers clear guidelines as to how and when payouts will be made, and will make payments within the terms of the contract, holding both parties accountable to its terms. Discretionary protection, as stated above, leaves payouts to a seemingly random system of chance, something that surgical practitioners do not have the luxury of dabbling in.

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