As a doctor, there's no doubt that you're thoroughly insured. Medical Indemnity insurance is required for you to practice in Australia, so whether your employment is private or public, you're covered. And you're a doctor, you know how important your health is, so you probably have health insurance too. Income Protection? Probably.
But what about Public Liability insurance? Do you need a personal policy to cover yourself?
If you're a Sole Trader working as a contractor, it may be worth it. Chances are your contract has an 'Indemnity Clause' that states what insurance types you require and are responsible for, and more often than not, this includes Public Liability.
What Is Public Liability Insurance?
Public Liability covers you for third-party death or injury where you are found liable for negligence not related to your profession as a medical practitioner. These kinds of claims are not covered by your Medical Indemnity insurance. This means that if a claim is made that alleges you are responsible for a physical or financial loss to the claimant, your Public Liability policy can be used to cover the cost instead.
Why Should Contractors Have Their Own Cover?
A claim can be as simple as a patient tripping over your bag in the waiting room of a clinic and suffering a physical injury.
In this situation, it's likely that the patient's claim will be made against the practice and not you, and that its Public Liability insurance will often respond to the claim on your behalf. If you are employed as a direct employee, normally your cover is provided by the business, and it will absorb the cost. But what if you're a contractor instead?
Built into many insurance policies is the right of the insurer to recover costs. As a contractor, you are considered a separate legal entity to the practice, and its insurer may take legal action against you if you are considered liable for the original claim. This can result in you having to pay compensation to the practice's insurer.
At the very least, a savvy lawyer could name you as a contractor in an action against the practice in an attempt to have another option that they can leverage a settlement payout from.
CASE STUDY
Leanne works as a GP contractor at ABC Health Centre and is running late for her shift. In her rush to get ready to see patients, she places her medical bag with her coat over it on the floor at reception, partially blocking the hallway and forgets about it.
While Leanne is seeing her first patient of the day, an elderly patient trips on her bag and breaks his hip. The patient ends up making a Public Liability claim against ABC Health Centre for his injuries and the costs associated with them, which is covered by the practice's insurance.
As Leanne is responsible for the accident and working as a contractor for ABC Health Centre, the practice's insurer enacts its cost recovery clause and files a legal claim against Leanne for the settlement amount.
Since Leanne does not have personal Public Liability insurance, thinking she was covered by the practice, she now has to cover the unexpected cost of legal fees or settlement costs herself.
If you are working as a contractor and are not personally insured for Public Liability, such a situation could become an expensive accident.
Alternatively, if you own a medical practice, it's good risk management to ensure all your contractors have obtained personal policies for both Medical Indemnity and Public Liability.
Reviewing your insurance policies annually to ensure you not only have the right policies, but the right amount of coverage, is an important exercise that can end up saving you a lot of money in the event of the unexpected.
Are you unsure of your insurance needs or want to review your business structure? Speak to one of our Medical Insurance Experts to ensure you're adequately protected.
