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There are six insurance companies in Australia that provide medical indemnity cover. TEGO insurance is the newcomer to the party.
Doctors, dentists, nurses and allied health professionals are required by law to have medical indemnity insurance.
Many of us signed up to whichever organization offered a freebie during medical school.
Is there a difference between cover and do you have the best cover at the best price?
What is the deal with the new player, TEGO who has been drastically under quoting other MDOs?
Australian Medical Indemnity Insurance Providers
- Berkshire Hathaway Specialty Insurance Company (distributed by Tego Insurance)
- Guild Insurance Limited (oral and maxillofacial surgeons only)
- MDA National Limited (MDAN)
- Medical Indemnity Protection Society (MIPS)
- Medical Insurance Australia Group (MIGA)
How Much Does Medical Indemnity Cover Cost?
Costs vary dramatically. Insurance is often offered free to students. They recognize many professionals will remain loyal throughout our career.
The largest factors in the price of indemnity premium include
- Employer indemnified or not
- Specialty risk (procedural specialties higher risk)
- Your previous history of claims
Doctors training in public hospitals are employer indemnified. Premiums for these are likely to be a few hundred dollars per year.
If you start private practice, general practice or locum work, this work is not employer indemnified. Premiums will increase significantly.
Indemnity premiums for self employed individuals are based on annual billings and specialty.
Higher risk and very highly paid procedural specialists, e.g. O&G, can incur eye watering annual premiums of tens of thousands!
Luckily, for those starting out in private practice, huge discounts of up to 80% are often offered to get you on board.
Of course, this means premiums can sky rocket after the first 4-5 years.
If you are in this situation, it is worth getting a quotes for the first 5 years to compare
Premiums of tens of thousands of dollars can be unmanageable, despite high billings. Premiums are based on gross billings. Yet gross billings don’t always reflect net income, as some specialties have high overhead costs.
The government provide the Premium Support Subsidy scheme, subsidizing premiums for eligible doctors including:
- Procedural GPs in a rural area
- Private practice clinicians whose premium > 7.5% gross private income
Check whether your eligible for the Premium support subsidy scheme.
Run Off Cover Scheme
Confusingly, there is government run off cover, and your insurance companies run off cover.
Government run off cover is free insurance cover, based on the last insurance contract.
It is designed to allow retiring doctors to continue cover for previous private practice work without paying insane premiums.
You are also eligible for run off cover if you are taking maternity leave and stopping private practice.
But if you leave private practice for reasons other than maternity, permanent disability, retirement aged over 65 years, or permanently leaving the country, you will need to purchase run off cover from your insurer.
Insurance company run off cover may be available for those working in public healthcare, taking parental leave or retiring.
This may reduce your premium significantly, but still keep active cover in case of claims made after you have ceased work.
Important Exclusions You Won’t be Covered For
– Not Telling Your Insurer As Soon As Possible
Insurers can refuse to cover a claim if you fail to inform them as soon as you’re aware there may be an issue.
If there is a chance of an adverse outcome or patient legal action, it’s worth giving them a call. They will quickly reassure you if there is no claim, but it is noted on file just in case.
It will also make calling your indemnity company less of a terrifying prospect if the worst happens, and you do have an adverse event one day.
The vast majority of doctors report their insurers acting compassionately and supportively when they have called.
– Illegal Activities, Sexual Harassments and Assault
We are all horrified when we hear a doctor has abused their position of power and harmed patients, or colleagues. If you do something indefensible, once it is proven, you are on your own. No insurance is going to cover this sort of behaviour.
Watch out for the sex offender doctor who is now a property advisor.
– If You Do Not Have an Active Policy At The Time of the CLAIM (not incident leading to claim)
Medical indemnity insurance in Australia is “Claims-made”. This means that insurance will cover your claim if your policy is current at the time of the claim.
That is why run off cover is essential. A claim can be made years after medical treatment. You may have no idea there is an issue until after retirement. Even if the claim has no basis, there could be huge costs involved in fighting it.
Retroactive cover is also important for this reason. If you are changing insurers, check your retroactive date.
– Telehealth when Your Patient is Overseas
Some of the insurers will cover overseas practice if you are completing a short term fellowship and have discussed it with your MDO prior. Otherwise, treating patients overseas is generally not covered.
I have not been involved in telehealth myself, but know many doctors have due to COVID. If your patient is dialing in from their holiday overseas (because you’re their favourite doctor), you may not be covered if there is an issue.
TEGO Insurance- The New Kid on the Block
Many doctors have found significantly cheaper premiums with TEGO insurance.
TEGO tell us this is because premiums are based on your personal risk as a doctor, not just your broad professional category.
So if you are a low risk doctor, you may be able to lower your indemnity cost with TEGO insurance. Doctors with a history of claims may find they are unable to get a quote from TEGO, or it is very expensive.
TEGO insurance is owned by Berkshire Hathaway, so has huge financial backing.
It has no “in house” lawyers unlike most MDOs.
Instead, TEGO contract lawyers as required. This keeps costs down, but has led to some concerns that it may motivate to settle a case quickly rather than defend your good name.
The concern is not evidence based so far, most doctors insured by TEGO insurance seem happy with the product.
TEGO is likely to quote you very low for the first year, but premiums may increase once they have your business. This may still be cheaper than other insurers.
They offer a “Policy matching” policy clearly intended to steal businesses from the other MDOs. Many are nervous to put their insurance with such a new player. Matching your original insurers policy offers reassurance that the cover is just as adequate.
Finally, Business for Doctors has a relationship with TEGO through which a further 5% discount can be achieved.
Aussie Doc has no relationship with BFD, TEGO and no experience with TEGO’s insurance products.
If price is your primary concern with indemnity cover, and you are low risk, get a quote from TEGO and read the PDS.
Comparing TEGO Insurance With The Competitors
|AVANT Medical Indemnity||TEGO Insurance||MDAN Medical Indemnity||MIPS Insurance||MIGA Medical Indemnity|
|Legal advice||24 hr||24hr||08:30-20:00||24 hr by healthcare professional||24 hr|
|Indemnity cover||$20 million with multiple sub-limits||Unlimited||Individual||$20 million total – $10 million per claim||Unlimited but multiple sub-limits|
|Good Samaritan cover||Y||Y||Not mentioned in PDS||Y||Y|
|Volunteer medical work||Y||Y||–||Y||Y|
|Clinical trials cover||Y except trials involving pregnant women, gene therapy, use of stem cells or children < 16 years||Y||Y||Y|
|Cover for international cover||Y (T&Cs)||–||Y (T&Cs)||–|
|Medicare or health care fund audit||Y||Y||–||Y||Y|
|Telehealth services||Y||Y||Y||Y||Won’t cover “inappropriate telehealth”|
|Needlestick Cover||$250K||Y – Variable||–||$25K||$100K|
I have summarized from what I can find on each company’s PDS. No responsibility is taken for accuracy or that it is up to date when you read this. It’s just to give you an idea. It’s important that you read the policy’s PDS carefully yourself.
Ask Your Colleagues
There may be details that make one policy advantageous over another in your chosen specialty. Asking colleagues for their recommendations may identify issues important for your career.
Who Will You Speak to?
If you need to call your medical indemnity insurance, I would imagine you are going to be in a very stressful situation.
It is important that you receive appropriate support.
Would you rather initially talk to a doctor or lawyer?
I would rather talk to a colleague who understands the medical situation and can hopefully reassure me!
I hope this has been helpful in the overwhelming decision to choose a medical indemnity provider. Get some quotes and read the PDS’ now you have a rough outline of what to expect. If you’re on a roll and want to cut costs on your other insurances, check out Insurance: Which Policies and When to Cancel and the Health insurance analysis.
Aussie Doc Freedom is not a financial adviser and does need offer any advise. Information on this website is purely a description of my experiences and learning. Please check with your independent financial adviser or accountant before making any changes.
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