Types of Medical Indemnity

Medical indemnity is a vital part of the healthcare industry. It provides protection and safeguarding against malpractice claims that medical professionals may face in their careers.1

However, with so many different types, it’s essential to find the right type of medical indemnity policy for you.

In this blog post, we explain what medical indemnity is, highlighting the different types to choose between and the various benefits they can bring. Discover all you need to know about the types of medical indemnity with THEMIS.

What is medical indemnity?

Medical indemnity is a specific insurance policy that protects healthcare professionals from the financial and legal repercussions of malpractice claims. It can cover legal costs, compensation and settlements.

Having the correct type of medical indemnity is crucial as it provides you with a safety net, allowing you to focus on delivering the best care to your patients without the fear of legal fees hanging over you.

Indemnity is essentially security or protection against a financial loss. It protects medical professionals facing the economic losses of malpractice claims, which can come about from making alleged mistakes, performing negligent acts or human error.

Medical indemnity covers the costs associated with defending against claims and, with the right policy, will pay out any compensation or settlement fees required.

Types of medical indemnity The two main types of medical indemnity are discretional and contractual. Understanding the key differences between the two is crucial as they have different stipulations and features.

Discretionary indemnity

Discretionary indemnity is a traditional model of medical indemnity. With discretionary indemnity, coverage is not always guaranteed, and it’s up to your provider whether they provide it.2 Therefore, coverage is treated on a case-by-case basis while the specific circumstances around the claim are considered.

However, discretionary coverage has various limitations. This form of coverage is unpredictable and there is no absolute certainty that your provider will support you financially when you submit a claim. Cover can also be withdrawn at a later date. As such, the unpredictability of discretionary indemnity can result in added stress and worry during an already challenging time.

Your discretional indemnity provider may also only accept your claim if they believe it meets their criteria, leaving you at risk of financial and legal losses. If the provider denies your claim, for instance, you usually cannot challenge the decision as they are under no contractual obligation. So, you could be left vulnerable to medical litigation and its consequences.

Contractual indemnity

As healthcare advances, medical indemnity evolves with it. Contractual indemnity is designed to offer structured, predictable coverage, making it a great alternative to discretional indemnity.2

Contractual indemnity is a legally binding contract that clearly outlines and defines the terms, conditions and extent of your coverage.2 In contrast to discretionary indemnity, instead of assessing your claim case-by-case, your provider will quickly decide whether to support you based on your agreed contractual terms as set out in your policy wording.

Since you have a contract with your insurer, the cover terms are enforceable by law. In other words, if your claim meets your policy’s criteria, your insurance provider must provide coverage.

With comprehensive coverage and transparency in policy terms, many medical professionals prefer contractual indemnity as it offers peace of mind and removes the worry of a claim refusal because the policy wording clearly sets out what is, and is not covered. In this consultation paper, medical professionals confirmed that they felt discretional indemnity was no longer fit for purpose.3

The benefits of contractual indemnity

Contractual indemnity offers many benefits over discretionary indemnity, making it a top choice for many healthcare professionals.

Some of the main benefits associated with contractual indemnity include:

  • Clear and comprehensive coverage and policies: When you choose contractual indemnity, a legally binding contract will define your policy clearly. Your policy will explain all the terms and conditions of your coverage straightforwardly, eliminating ambiguity and giving you confidence in your coverage.
  • Predictability: As contractual indemnity is enforceable, your coverage is more predictable and reliable. You can trust that if your claim falls within the terms and conditions of your contract, your insurance provider will approve and cover it.
  • Legal enforceability: Contractual indemnity providers are legally required to provide cover if your claim is within your agreed terms and conditions. If they do not provide cover or unjustly deny your claim, they can face legal repercussions as they haven’t stuck to their contractual obligations.
  • Robust protection: Modern healthcare litigation is costly and complex, often involving long, and sometimes financially devastating, legal battles. However, with contractual indemnity, you will not only have strong protection against legal fees, compensation and other expenses but also peace of mind over the potential financial consequences that healthcare litigation can cause because contractual insurance can only be underwritten in the UK by regulated insurers who undergo rigorous stress testing by the PRA so you know they can be relied on to pay out if you need them to.

Why choose THEMIS for your contractual indemnity?

Choosing the ideal provider for your contractual indemnity is essential. At THEMIS, we stand out as leaders in the contractual indemnity field and are renowned for our expertise within the healthcare industry. We understand the unique challenges that healthcare can bring with it so craft our indemnity policies to meet the specific needs of healthcare professionals.

We create every policy to provide you with maximum coverage and confidence should you ever need to submit a claim. We also believe in offering tailored, expert-backed solutions, working with you to ensure your policy addresses the specific risks you are likely to face.

Discover expert-backed contractual indemnity with THEMIS

As a healthcare professional, choosing the right indemnity coverage is vital. Contractual indemnity provides clear, comprehensive and enforceable protection and the peace of mind to support you when facing a claim.

As experts in providing specialised contract indemnity experience to medical professionals, we are committed to transforming the medical indemnity landscape by offering our clients policies they can rely on when it counts.

Get in touch with THEMIS today to learn more about our contractual indemnity policies.