The importance of Medical Malpractice Insurance for healthcare practitioners and providers

What is Medical Malpractice Insurance?

Medical Malpractice Insurance (MMI), also known as medical indemnity insurance or medical liability insurance, helps to protect healthcare professionals against claims that may arise because of malpractice or negligence. These might include:

• Surgical errors
• Post-operative complications
• Misdiagnosis or delayed diagnosis
• Failure to obtain consent.

If a claim is made against you, whether it is justified or not, medical malpractice insurance will cover the cost of your legal defence, as well as any compensation you may have to pay. It is therefore essential for safeguarding healthcare professionals and their practices against the legal, financial and reputational repercussions of malpractice claims.

Anyone who could potentially harm or injure another person while providing healthcare and exercising their professional duties is generally required by law to have adequate and appropriate insurance or indemnity arrangements in place. This can include private practitioners, general practitioners, dentists, surgeons, consultants, clinics and hospitals.

Why is Medical Malpractice Insurance Essential?

Comprehensive Protection

• Individual practitioners – Healthcare professionals such as doctors, nurses, specialists and therapists, need MMI to protect their personal assets and professional careers from the potentially devastating financial impact of a malpractice lawsuit. Errors, omissions or perceived negligence can lead to costly litigation and settlements.

• Hospitals, clinics and medical practices – Healthcare providers face a unique set of risks because they are responsible for the actions of their entire staff. If a malpractice claim is brought, the clinic itself can be named in the lawsuit, especially if the claim involves systemic issues or policies. Having separate MMI for the clinic ensures that both the clinic and the practitioners are covered, reducing the risk of uncovered liabilities.

Case Studies Highlighting the Importance of Comprehensive MMI Coverage

• Case Study 1: Negligent misinterpretation of X-ray

A patient suffered an injury whilst playing football. Upon attending hospital, an MRI scan of the patient’s knee was incorrectly reported as showing no abnormality. He was later found to have suffered an anterior cruciate ligament tear. Due to the late diagnosis, the patient was given incorrect treatment and suffered a fall in which he sustained a tear of the medial meniscus. As a consequence, the patient was immobilised for a year longer than he should have been. Liability was accepted and an award was agreed at ￡100,000.

• Case Study 2: Laser eye surgeon practising without insurance

A patient was told that a ’straightforward’ procedure would reduce her dependence on glasses and cost around ￡3,000. After undergoing laser eye surgery, she suffered painful symptoms during her recovery and ultimately her vision deteriorated making her more dependent on glasses than previously. Investigations revealed that the advice to undergo laser eye surgery was inappropriate and the laser had been incorrectly programmed. The patient had further not been informed about the risks and alternatives, which amounted to a failure to obtain ’informed consent’. It also emerged that the surgeon had been performing procedures without MMI. The legal case resulted in a settlement for a five-figure sum. The clinic was placed into administration.

• Case Study 3: Sexual misconduct by Dr Michael Salmon

In 2015, Dr Michael Salmon, a former consultant paediatrician in the UK, was convicted of sexually abusing patients in the 1980s. The victims were awarded compensation for the abuse they suffered under his care. The NHS Trust involved had to utilise its medical malpractice insurance to cover the settlements and legal fees. This case illustrates the importance of having comprehensive malpractice coverage to protect the financial stability of the clinic and ensure victims receive just compensation. In this case, the insurance underwriter assisted the hospital with legal costs even though the criminal behaviour of the medical practitioner would have been an exclusion for insurance purposes.

• Case Study 4: Unnecessary surgical procedures and operations

In April 2017, former breast surgeon Ian Paterson was criminally convicted of multiple counts of wounding with intent at Nottingham Crown Court and sentenced to 20 years in prison. Paterson had been carrying out unnecessary surgical procedures and operations on patients referred to him by private healthcare provider Spire. A ￡37 million compensation package was approved by a High Court judge in 2019 for the hundreds of private patients affected by his actions. This included ￡27.2 million paid out by Spire Healthcare and ￡10 million paid by Paterson’s insurers and former employers at the Heart of the England NHS Trust.

The key benefits of Medical Malpractice Insurance

MMI can provide peace of mind in several ways. Some of the key benefits of taking out a tailored insurance policy include:

• Financial protection for professional and personal assets.
• Access to legal support and expertise.
• Professional reputation protection.
• Coverage for defence costs (including legal fees, expert witness fees and court expenses).
• Access to risk management resources, training programmes and educational materials.

At Sovereign Insurance Services (SIS) we have the luxury of being connected to the London insurance market. This gives us direct access to a unique pool of underwriting expertise in a global marketplace, which is especially attractive for clients requiring specialist, innovative or bespoke risk solutions. It enables SIS to provide multiple, alternative quotes for our clients and helps to ensure that you receive the best possible outcomes across price, coverage and service – strengthening the value you get from your policy.

If you would like to discuss this further, please contact our Medical Malpractice specialist Jade by phone on +350 20052908 or by email to [email protected].