By Tuan Duong, Head of Medical Indemnity & Operations at TEGO Insurance

Build a Strong Insurance Strategy

Arrange your medical indemnity insurance before your first private patient, not after. The policy needs to be in force at the time of treatment. Doing only one or two sessions a week to begin with is not a reason to delay. It is a reason to ensure the policy is priced to reflect a lower billing volume while you transition.

Most specialist insurers offer discounted premiums for doctors in their first years of private practice, recognising the lower billing base and typically lower risk profile of a newly established practice. These discounts can be significant and are worth factoring into the decision.

Starting in Private Practice

1. Before You Start

   • Arrange your medical indemnity insurance before your first private patient, not after.

   • The policy needs to be in force at the time of treatment.

   • Most specialist insurers offer discounted premiums for doctors in their first years of private practice, recognising the lower billing base and typically lower risk profile of a newly established practice.

   • These discounts can be significant and are worth factoring into the decision.
     
     

2. Map Out Your Structure Before Choosing Cover

   • Before you approach insurers, be clear on how you will be practising.

   • Will you be a sole practitioner billing in your own name, or will you operate through a company? Will you employ staff? Will you have a corporate trustee?

   • A conversation with your accountant and your insurer together, rather than separately, often saves time and prevents gaps.
     
     

3. Read the Policy, Not Just the Summary

   • Read the Product Disclosure Statement (PDS), which is the document that governs what your policy actually covers.

   • In particular, read the sections on exclusions, notification obligations, retroactive cover, and the claims process.

   • If there is something you do not understand, ask your insurer to explain it.
     
     

4. Compare on Claims Handling, Not Just Price

   • Ask prospective insurers: how do you handle a claim where I want to defend the matter rather than settle? What is your process when a complaint is made to AHPRA? Do I get to choose my own solicitor? How quickly can I speak to a medico-legal adviser when something goes wrong?

   • The answers to these questions reveal more about the quality of the product than the premium does.
     
     

5. Keep Your Insurer Informed as You Grow

   • Your insurance needs will evolve as your practice grows.

   • Review your cover after employing staff, relocating or expanding your services.

   • Insurance is not a set-and-forget purchase.

   • Conduct an annual review to ensure your cover keeps pace with your changing risk.

   
   Note: Read this article to find out how being underinsured affected Dr Yang’s practice.
   
   

The Medico-Legal Support Dimension

Medical indemnity insurance is not only about the money paid on claims. For most doctors, the more immediate value of the product is access to expert advice when something feels uncertain, before it becomes a claim.

Situations that may prompt you to seek advice include a patient who is unhappy after a procedure, a complaint letter from a law firm, a notification from AHPRA, or a Medicare audit letter.

These situations are stressful and, handled poorly, can escalate. The right insurer provides rapid access to experienced medico-legal advisers who understand both the clinical and legal dimensions of what you are facing, and who can help you respond appropriately.

Available Around the Clock

When choosing your insurer, ask whether medico-legal advice is available around the clock.

In practice, problems do not arrive during business hours. Receiving an AHPRA notification on a Friday afternoon, or having a difficult patient interaction on a Saturday morning, is not uncommon. The ability to call someone and get practical guidance immediately, not on Monday, matters.

A Note on the Practice Entity: Two Separate Risks

There are two separate insurable interests when you run a private practice as a business entity.

1. You as a Clinician

Your personal medical indemnity policy covers your clinical acts and the claims that arise from them.

2. The Practice Entity

The practice entity is the company, partnership, or trust that employs people, signs leases, holds equipment, and enters into contracts.

Note: Claims can be made against the entity that would not be covered by your personal policy at all. As your practice grows, these two insurance interests grow further apart. Ensuring both are covered, and that the limits are appropriate to the size of the practice, is a straightforward thing to manage, but it requires someone to ask the question.

Challenges and Risks: What Doctors Most Often Get Wrong

Assuming Hospital Cover Is Enough

The most common misconception among doctors approaching the end of training is that their hospital employer's insurance arrangements will extend into their early private practice sessions. They do not. Hospital cover protects the hospital. The moment you are treating a patient under your own name, in a consulting room, at a private hospital, via telehealth, or anywhere outside your employed role, you need your own policy in place.

Treating the Policy as a Commodity

Medical indemnity insurance is often compared purely on premium. Premium matters, but it is not the right primary filter. The more important questions are: what exactly does this policy cover, what are the exclusions, is unlimited retroactive cover included, how are claims actually handled, and will the insurer defend me if I want to defend myself? A policy that is $500 cheaper per year but settles complaints early without your consent, excludes Medicare audits, or provides limited medico-legal support is not a better policy. It is a more exposed one.

Underinsuring the Practice Entity

Many doctors take out personal cover and then operate through a company, employ staff, and grow a practice without updating their insurance program to reflect that structure. The personal policy does not follow the company. When a claim is eventually made against the entity, there is no cover responding to it. Reviewing your entity structure and insurance program together, and revisiting it as the practice grows, is an important discipline.

Not Notifying Early

Medical indemnity policies require you to notify circumstances that may give rise to a claim, often as soon as you become aware of them. Many doctors delay notification because they do not think a complaint will proceed, or because they do not want to make it official. This is one of the more costly mistakes a doctor can make. Late notification can affect your coverage. More practically, early notification allows your insurer to advise you on managing the matter before it escalates, including on documentation, communication with the patient, and what to say and not say if asked. If in doubt, call your insurer. A call costs nothing. A coverage dispute costs significantly more.

Getting Caught at Policy Transitions

Switching insurers without confirming that your new policy includes an unlimited retroactive date, or that your old insurer provides run-off cover for incidents that occurred during your time on their policy, creates a gap. This gap may not become apparent for years, until a claim is made for something that happened during the transition period and neither insurer is willing to respond. Before switching, always confirm: what retroactive date will my new policy carry, and is run-off cover automatic with my current insurer if I leave?

About The Author

Tuan Duong is Head of Medical Indemnity & Operations at TEGO Insurance, a specialist medical indemnity underwriter. His contribution explores insurance considerations for doctors starting in private practice, including choosing appropriate cover, managing risk and accessing medico-legal support.

Connect with TEGO Insurance

Suite 19.02, Level 19/56 Pitt St, Sydney NSW 2000.
tego.com.au | 1300 834 683

Tego Insurance Pty Ltd AFSL 482467, ABN 34 608 505 960

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