Indemnity Insurance for Doctors: 2020 Compact Definitive Guide for Beginners in Malaysia

Indemnity insurance for doctors is a requirement for renewing APC in Malaysia, starting from 2021. This article will attempt to make it easier to understand what you’re getting and where to find these insurance providers.

Introduction

What is professional indemnity insurance? It’s basically insurance taken out to cover a professional against claims, damages and / or loss in the conduct of business. It is also commonly known as medical malpractice insurance or insurance for medical professionals.

indemnity /ɪnˈdɛmnɪti/ insurance – Indemnity insurance is a contractual agreement in which one party guarantees compensation for actual or potential losses or damages sustained by another party. … These special insurance policies indemnify or reimburse professionals against claims made as they conduct their business.

Investopedia – Indemnity Insurance Definition https://www.investopedia.com/terms/i/indemnity_insurance.asp

What is medical malpractice? In short, there must be 3 elements:

  • Duty of care
  • Negligence
  • Patient was harmed

A medical malpractice constitutes all the 3 elements above. An indemnity insurance is meant to cover the legal costs for a doctor should a malpractice suit is brought against him or her.

Disclaimer: Before continuing, I’m not an expert in medicolegal stuff – just sharing what I learned.

Professional Indemnity Insurance for Doctors in Malaysia

Since the regulations under Medical Act 1971 were updated in 2017, Professional Indemnity Insurance (PII) is now required for renewal of Annual Practicing Certificate (APC) for doctors in Malaysia, along with the 20 CPD points requirement. Even though the regulation was passed in 2017, the enforcement will only start for renewal of APC for the year 2021.

The requirement for indemnity insurance for doctors in Malaysia covers both government and private sector practitioners. As long as the person wants to renew his or her APC, it is a must to buy the medical indemnity insurance starting from 2021 onwards.

Insurance for Doctors: Important Things to Learn Before You Buy

With the enforcement of the requirement of indemnity insurance starting from the year 2021, there are now multiple insurance for doctors offering in Malaysia that have sprung up like mushroom after rain. However, not all insurance are created equal as there are fine prints you should know and understand before committing to an insurance provider.

Every medical indemnity insurance policy would have certain basic features which would be daunting to understand for first-timers. Here are the things I think are important to know before you commit to an indemnity insurance provider. Typically, 5 years is the minimum number of years imposed by many insurance companies before the policy covers you for unlimited retroactive and runoff cover.

  1. Coverage
  2. Retroactive cover
  3. Runoff cover
  4. Locum practice
  5. Choice of lawyer
  6. Ease to get contractual obligation information

Coverage

What does a professional indemnity insurance for a doctor actually cover?

Generally, a professional indemnity insurance for doctors covers the following (do take note this is not an extensive list and coverage is different between providers)

  • Claims arising from an incident in the course of providing professional healthcare services by the insured
  • Legal representation costs incurred in connection with inquiries into conduct of professional healthcare services
  • Liabilities arising in the course of doing locum work

Some insurance providers like Doctor Shield provides extra features like coverage for aggravated damages (compensation to be paid out to the harmed person).

Retroactive Cover

What is retroactive cover? It is coverage extended to cover damages arising from before your policy date. For example:

  1. You bought an indemnity insurance in May 2020 with a retroactive date of June 2019.
  2. Someone raised a claim against you for and incident that happened in December 2019
  3. You would be protected as the incident happened after the retroactive date.

For those who have been practising medicine for a long time, I think this feature is quite important to protect yourself and your practice and give you peace of mind. Another point to consider is if your policy has unlimited retroactive date to give you full benefits of retroactive protection. However this typically only applies if you have been with the insurance company for at least 5 years.

Run-Off Cover

Run-off coverage means protection for you when you have retired from active clinical work and have stopped paying the premium.

Say you stopped practising in November 2019, and suddenly you’re faced with a claim in January 2020. You can still get protected from any claims subject to your policy coverage.

A few insurance policies have unlimited run-off, meaning you still get coverage even though you’ve been retired for 20 years, as long as you have been paying the premium for 5 years.

Another scenario is, if you’re retiring in less than 5 years, it’s still possible to top-up your premium to get the unlimited run-off coverage (subject to the providers’ approval).

Locum Practice Coverage

One key coverage area is definitely locum practice, as many government doctors do locum work outside of their normal work hours with the government hospital. Some insurance providers adjust your premium based on whether you do locum practice or not. The premiums also depend very much on your field of specialisation. For example, those in obstetrics & gynaecology face a high amount of medical lawsuits and thus premiums are much higher compared to someone practising public health.

Choice of lawyer

Almost all the insurance providers will have their own panel of qualified lawyers and experts in medicolegal cases. However, should you already have someone whom you want to work with, certain schemes don’t allow for your own choice of lawyers.

Contractual Obligation

Is the provider willing to give you full information of the contractual obligation upfront before asking you to commit to their insurance policy? In some cases, certain providers are reluctant to furnish the information.

Personally, I’m the type of person who needs to understand fully what I’m getting into before committing to it.

Indemnity Insurance For Doctors

The field for medical indemnity insurance is getting crowded in Malaysia. With so many insurance providers to choose from, which one is the best?

Fret not as i will attempt to breakdown and de-mystify this topic by breaking it down into simple to understand comparisons. Simply click the button below to start your journey.

1 Comment
  1. All indemnity insurance policies will have a specified limit. Meaning the insurers liability to pay for any loss will be capped by the limit the doctor chooses.

    So a doctor may choose to buy any limit offered by the insurers. Typical limits range from RM 1 Million upto RM 30 Million.

    Hence another very important factor to consider is whether the defense costs forms part of the Policy Limit or if they are paid in addition to the Policy Limit.

    The Medefend policy pays defense costs over and above the Policy Limit.

    So lets say a Dr is sued and is ordered to pay RM 1 Million and the legal costs incurred is RM 300,000.

    The Dr has purchased a RM 1 Million policy limit.

    IF the Dr bought from Medefend the Dr will be indemnified for the loss in full i.e RM 1 Million and also the legal costs of RM 300,000.

    If the Dr purchases from any other insurer whose limits are all inclusive – the Dr will be out of pocker for RM 300,000/-

    Good point on aggravated damages – Medefend was the first to offer cover for aggravated damages upto the full policy limit

Leave a reply

Fiholic
Logo
Reset Password
Compare items
  • Total (0)
Compare
0