Day hospitals and specialist medical facilities have insurance exposures that go well beyond a standard business insurance policy.
Clinical services, expensive medical equipment, specialist fit-outs, business interruption, patient information, employees and regulatory obligations can all create significant risks for the organisation.
Mercantile Insurance Brokers can arrange and review insurance programs for day hospitals, day surgeries and specialist medical clinics throughout Australia.
We take the time to understand the procedures performed, practitioners working from the facility, ownership structure, equipment, premises and contractual arrangements before approaching insurers.
Insurance for Day Hospitals and Day Surgery Facilities
A day hospital insurance program may involve several separate insurance policies working together.
| Insurance | What It Can Protect |
|---|---|
| Entity Medical Malpractice | Claims against the facility arising from clinical, professional or healthcare services |
| Public & Products Liability | Certain third-party injury and property damage claims |
| Property Insurance | Buildings, fit-out, contents and medical equipment |
| Business Interruption | Loss of income and increased operating costs following insured property damage |
| Machinery & Equipment Breakdown | Breakdown of insured medical, electrical and mechanical equipment |
| Cyber Insurance | Cyber attacks, privacy breaches, ransomware and interruption to computer systems |
| Management Liability / D&O | Certain claims involving directors, officers and management |
| Workers Compensation | Workplace injury insurance required under the relevant State or Territory scheme |
The appropriate insurance structure depends on the individual facility, services performed and policy wording.
Entity Medical Malpractice Insurance
One of the most important insurance considerations for a day hospital or specialist clinic is Entity Medical Malpractice Insurance.
Doctors and other registered healthcare practitioners may maintain their own individual medical indemnity insurance.
However, this does not necessarily protect the company or organisation operating the facility.
The facility itself can potentially be named in a claim involving allegations concerning clinical systems, nursing care, employees, supervision, credentialling, policies and procedures, or the actions of healthcare professionals providing services within the organisation.
Entity Medical Malpractice insurance should therefore be considered separately from the individual Medical Indemnity insurance held by doctors.
Who Can We Assist?
We can consider insurance requirements for:
- day hospitals and day surgeries
- endoscopy and gastroenterology facilities
- ophthalmic and eye surgery centres
- fertility and IVF facilities
- specialist medical centres
- surgical and procedural clinics
- cosmetic and plastic surgery facilities
- infusion and treatment centres
- pain management clinics
- dental day hospitals
- specialist physician clinics
- multi-practitioner medical groups.
Insurance availability and terms depend on the procedures and services performed.
Why Individual Doctors’ Insurance May Not Be Enough
A common misconception is that a medical facility does not require its own Medical Malpractice insurance because the doctors working from the facility maintain individual Medical Indemnity policies.
The exposures are different.
A doctor may be responsible for their individual professional conduct, while the facility can potentially have separate liability arising from its own operations.
Examples can include allegations involving inadequate systems, nursing staff, infection-control procedures, clinical protocols, patient monitoring, equipment, administration or the actions of employees.
The insurance program should therefore consider both practitioner-level risk and entity-level risk.
Nurses, Employees and Contractors
Day hospitals commonly involve a combination of surgeons, anaesthetists, nurses, technicians, administrative staff and other healthcare professionals.
Some may be employees while others operate as independent practitioners or contractors.
Insurance should clearly establish how the policy treats these different parties.
We can review definitions of insured persons, employees, contractors and healthcare professionals together with the facility’s potential vicarious liability.
Medical Equipment and Specialist Fit-Out
Modern day surgery facilities can contain substantial values in medical equipment and specialist fit-out.
This may include operating theatre equipment, sterilisation equipment, endoscopy equipment, imaging equipment, patient monitoring systems, medical refrigeration, electrical equipment and specialist treatment devices.
The replacement value of this equipment should be properly considered when establishing property sums insured.
Equipment breakdown insurance may also be important where the failure of critical equipment could prevent the facility from operating.
Business Interruption Insurance
For a day hospital, the financial consequences of property damage can extend well beyond the cost of repairing the building.
A fire, water damage, equipment breakdown or other insured event could result in procedures being cancelled and the facility being unable to operate.
Business Interruption insurance can potentially provide protection for loss of insured income and additional operating costs following an insured event.
Particular consideration should be given to the indemnity period.
A specialist medical facility may require significant time to reinstate operating theatres, replace specialist equipment, obtain approvals and return the facility to full operation.
Medical Equipment Breakdown
Equipment breakdown can be particularly important for procedural healthcare facilities.
The loss of a key piece of equipment may result in procedures being postponed even where there has been no significant damage to the building.
Depending on the policy, cover may be available for insured breakdown of specified machinery or electronic equipment together with associated losses.
The interaction between Property, Machinery Breakdown and Business Interruption insurance should be reviewed carefully.
Cyber Insurance for Day Hospitals
Day hospitals and medical clinics hold substantial quantities of sensitive health and personal information.
Facilities may also depend on practice-management systems, electronic patient records, theatre systems, bookings, billing platforms, email and cloud-based applications.
A serious cyber event can therefore affect both privacy and the facility’s ability to continue operating.
Cyber Insurance can potentially provide protection for events including ransomware, privacy breaches, unauthorised access, data restoration, forensic investigation, incident response and certain business interruption losses.
Management Liability and Directors & Officers Insurance
Owners, directors and senior management of healthcare organisations can face risks separate from clinical malpractice.
Depending on the policy and organisation, Management Liability or Directors & Officers Insurance may provide cover for certain claims involving directors and officers, employment practices, regulatory investigations and defence costs.
Larger healthcare organisations may require a standalone Directors & Officers Liability policy rather than a standard Management Liability package.
Public Liability and Medical Malpractice
Public Liability and Medical Malpractice insurance perform different functions.
An injury resulting from the physical condition of the premises, for example, may involve Public Liability.
An allegation arising from a surgical procedure, nursing service, clinical decision or another professional healthcare service may instead involve Medical Malpractice.
The interaction between these policies is important because Public Liability policies commonly contain exclusions relating to professional services.
We can review both policies together to reduce the risk of unintended gaps.
Contracts With Doctors and Healthcare Practitioners
The contractual arrangements between a facility and the doctors working from it can materially affect risk.
Agreements may contain indemnities, insurance requirements, minimum insurance limits and provisions allocating responsibility between the doctor and the facility.
Insurance should not be assumed to automatically cover every liability accepted under contract.
Significant contractual obligations should therefore be considered as part of the insurance review.
Claims-Made Medical Malpractice Insurance
Medical Malpractice insurance is commonly written on a claims-made basis.
This means continuity of insurance can be particularly important.
When changing insurer, consideration should be given to previous claims, known circumstances, notifications, retroactive dates and continuity provisions.
Changing insurer based purely on premium without considering these issues can potentially create a gap in historical protection.
Insurance for Licensed Day Hospitals
Facilities operating as private hospitals or day hospitals can be subject to State or Territory licensing requirements as well as Commonwealth requirements relevant to private hospital status and private health insurance arrangements.
The insurance program should accurately describe the facility, procedures performed, licensing status and clinical activities.
Insurance does not replace an organisation’s regulatory obligations, but it forms an important part of the facility’s wider risk-management framework.
Why Use a Specialist Healthcare Insurance Broker?
Day hospital insurance requires an understanding of both clinical and commercial risk.
Mercantile Insurance Brokers can consider the organisation as a whole, including its Medical Malpractice exposure, doctors and contractors, property and equipment, Business Interruption, cyber risks, management exposures and contractual obligations.
Our objective is not simply to obtain an insurance quotation.
It is to understand how your facility operates and arrange an insurance program that reflects the risks of the actual business.
Day Hospital Insurance Australia
Mercantile Insurance Brokers can assist both established facilities and organisations reviewing or establishing new healthcare operations.
Whether you operate a single specialist facility or a group of healthcare locations, we can review your existing insurance arrangements and approach suitable Australian and international insurance markets where appropriate.
Frequently Asked Questions
What insurance does a day hospital need?
Depending on its operations, a day hospital may require Entity Medical Malpractice, Public Liability, Property, Business Interruption, Machinery Breakdown, Cyber Insurance, Management Liability or D&O, Workers Compensation and other specialist covers.
Does a day hospital need Medical Malpractice insurance if all doctors have their own insurance?
The facility can have separate liability from the individual doctors. Entity Medical Malpractice insurance is intended to protect the organisation against certain claims arising from professional and clinical services, subject to the policy wording.
Are nurses covered by the doctors’ Medical Indemnity insurance?
This should not be assumed. The facility should establish how its own insurance treats nurses, employees, contractors and other healthcare professionals.
Does day hospital insurance cover expensive medical equipment?
Property and equipment insurance can be arranged for medical equipment, contents and specialist fit-out. The equipment should be correctly valued and policy limits and exclusions reviewed.
What happens if a day hospital cannot operate after a fire?
Business Interruption insurance may provide cover for insured loss of income and additional operating costs following insured property damage. The appropriate indemnity period is particularly important for specialist healthcare facilities.
Do day hospitals need Cyber Insurance?
Cyber Insurance should be seriously considered because day hospitals hold sensitive health information and rely heavily on clinical and administrative technology.
Request a Day Hospital Insurance Review
If you operate a day hospital, day surgery or specialist medical facility, contact Mercantile Insurance Brokers to discuss your insurance requirements.
We can review your existing program or approach the insurance market for alternative terms.
Phone: 1300 310 467
Mercantile Insurance Brokers Pty Ltd
ABN 67 632 896 461
Authorised Representative of Community Broker Network Pty Ltd
ABN 60 096 916 184 | AFSL 233750