Indemnity: Insurance based cover OR Medical Defence Organisations

3^rd February 2025

Indemnity: Insurance based cover OR Medical Defence Organisations

‘I am uncertain of whether I should change from my current Medical Defence Organisation (MDO).’

I speak with hundreds of surgeons every year and there is a common theme from those conversations that I feel would be useful to share. Medical defence provider change anxiety.

Questioning a significant step such as this is normal, but I find the reasoning behind it is usually grounded in misconceptions. There are really two methods to protect yourself and comply with GMC and private hospital requirements, either MDO membership, or, insurance-based cover. Confusion between the two is common, but the distinctions are clear. MDO membership is as it says, membership, and with this annual membership you are entitled to request assistance in the event of a negligence claim etc. The MDO is not regulated by the Financial Conduct Authority or contractually obliged to provide assistance, and this assistance is at the discretion of the board. So, you can see with this method you can offer whatever you like, unlimited cover, assistance for any matter, the list goes on. Reality is quite different, as we all know that a service is limited by the resources available to provide it! Insurance cover is on a contractual regulated basis, provided as an annual policy renewed each year, as you do with most other types of insurance. The policy will cover you for the activities you have declared to your insurer and respond to a claim when it arises. Most often, this is via a claims’ made policy, which means the policy in force at the time of a claim responds to the claim, whereas MDO cover responds on the basis of who you had membership with when the incident occurred (occurrence based).

You can imagine, I would be in favour of the insurance-based cover and there a number of reasons for this. Would you protect any of your other assets, like your home on a discretionary basis, such as with an MDO? Some surgeons I speak with have been told that a claims made policy expects you to obtain cover for when you retire from practice, whereas an occurrence policy does not. Now let’s look at the reality of this. What this is referring to is run-off cover, a period of time following retirement where a policy will respond to claims made against you or your estate. This cover is common place within claims made insurance policies, with run-off cover being provided for up to 25 years following retirement. Policies offered to PRASIS members all include run-off cover for a minimum of 21 years, unless advised otherwise. The insurance market for medical indemnity cover is also quite a big place, certainly vastly more than the three MDO options available, which in turn drives competition and innovation among providers. Some specialties, in particular plastic surgery, would have barely survived had it not been for the insurance market innovating and supporting surgeons on how to make private plastic surgery more sustainable.

Familiarity also appears to be the driving force behind the hesitancy to change, from an MDO to an insurance based product, probably because some surgeons are unaware of the scale of the shift that has already happened. It does seem that medical indemnity cover is falling out of step with approaches and common practice for other cover we have come to rely on, not contractual, not regulate and working to a voluntary code of practice. Why wouldn’t you review how you are covered for medical negligence claims, you do for your car, house and even pet insurance. Medical indemnity insurance is not new and the insurers backing it are not inexperienced. If you have a question or worry you would like to talk to us about, please email us at: prasis@m-i-c.co.uk. We offer regulated advice that is there to enable and inform you to make the best decision for you.

Simon Downing

Managing Director

MIC (PRASIS Broker)