Medical centres and general practices face a combination of medical malpractice, professional, property, liability, cyber, employment and business interruption risks.
While individual doctors may maintain their own Medical Indemnity insurance, this does not necessarily protect the company or organisation operating the medical centre.
Mercantile Insurance Brokers can arrange and review insurance programs for medical centres, GP clinics and general practices throughout Australia.
We look beyond individual practitioner insurance and consider the risks of the medical practice as a business — including its doctors, nurses, employees, contractors, premises, medical equipment, patient information and management exposures.
What Insurance Does a Medical Centre Need?
There is no single insurance policy that covers every risk faced by a medical centre.
Depending on the practice, an insurance program may include:
| Insurance | What It Is Designed to Protect |
|---|---|
| Entity Medical Malpractice / Professional Indemnity | Certain claims made against the medical centre arising from professional, clinical or healthcare services |
| Public & Products Liability | Third-party bodily injury and property damage claims, subject to policy terms |
| Property Insurance | Fit-out, contents, medical equipment and other insured property |
| Business Interruption | Loss of insured income and additional operating costs following insured property damage |
| Cyber Insurance | Cyber attacks, privacy breaches, ransomware, data loss and related business interruption |
| Management Liability / D&O | Certain claims involving directors, officers, management and the organisation |
| Machinery & Electronic Equipment Breakdown | Breakdown of specified medical, electrical and electronic equipment |
| Workers Compensation | Workplace injury insurance required under the applicable State or Territory scheme |
| Motor Insurance | Vehicles owned or operated by the practice where applicable |
The appropriate insurance program depends on the services provided, size of the practice, ownership structure, number of locations and how doctors and other healthcare professionals are engaged.
Entity Medical Malpractice Insurance for Medical Centres
One of the most important issues for a medical centre is understanding the difference between a doctor’s individual Medical Indemnity insurance and insurance protecting the medical centre itself.
A claim may potentially name both the individual practitioner and the organisation operating the practice.
The medical centre could face allegations involving:
- nursing services;
- treatment provided by employees;
- failure to follow up test results;
- appointment and recall systems;
- communication failures;
- clinical administration;
- inadequate practice procedures;
- supervision of employees;
- patient monitoring;
- infection-control systems;
- medical equipment;
- clinical documentation;
- services provided on behalf of the practice; or
- vicarious liability for healthcare professionals.
An individual doctor’s Medical Indemnity insurance should therefore not automatically be assumed to protect the medical centre entity.
We can review whether the company, practice entity, employees, nurses and other healthcare professionals are appropriately addressed within the practice’s insurance arrangements.
Do Doctors’ Medical Indemnity Policies Cover the Medical Centre?
Not necessarily.
Registered doctors have their own professional indemnity insurance requirements, but the medical centre may have exposures that are separate from the individual doctor’s professional liability.
For example, a claim may allege that the medical centre failed to:
- maintain an appropriate recall system;
- communicate an important result;
- properly supervise an employee;
- maintain adequate clinical procedures;
- provide appropriate nursing services; or
- operate adequate practice systems.
These are examples of why the insurance requirements of the practice entity should be considered separately from the Medical Indemnity arrangements of individual practitioners.
Who Can We Assist?
Mercantile Insurance Brokers can assist with insurance for:
- general practices;
- GP medical centres;
- family medical practices;
- multi-doctor practices;
- multidisciplinary medical centres;
- bulk billing medical centres;
- privately billing practices;
- corporate and independently owned medical centres;
- skin cancer clinics operating within general practice;
- women’s health clinics;
- men’s health clinics;
- occupational health practices;
- travel medicine clinics;
- vaccination clinics; and
- multi-location medical practice groups.
Practices providing specialist procedures or services should ensure those activities are specifically disclosed to insurers.
Medical Centres With Independent Doctors
Many Australian medical centres operate with doctors who are not traditional employees of the practice.
Doctors may work under arrangements involving:
- service agreements;
- contractor arrangements;
- room rental;
- percentage service fees;
- practitioner companies; or
- other independent practice structures.
These arrangements can create important insurance considerations.
The fact that a doctor is described as an independent contractor does not automatically mean the medical centre can never be named in a claim arising from that doctor’s activities.
Insurance arrangements should therefore be considered alongside the actual relationship between the practice and its practitioners.
We can review the policy definitions and consider how the insurer treats employees, contractors, practitioners and the insured medical centre entity.
Practice Nurses and Other Healthcare Professionals
Many medical centres now employ or engage healthcare professionals in addition to doctors.
This can include:
- registered nurses;
- enrolled nurses;
- nurse practitioners;
- allied health professionals;
- pathology staff;
- vaccination nurses;
- chronic disease management staff; and
- other healthcare workers.
The services these people perform should be accurately disclosed to the insurer.
A policy should not be assumed to automatically cover every healthcare profession or every clinical procedure performed from the premises.
Medical Procedures Performed at the Practice
Not all GP practices have the same clinical risk.
Some practices may provide routine consultations only, while others undertake additional procedures.
These can include:
- vaccinations;
- wound management;
- minor surgical procedures;
- skin lesion removal;
- suturing;
- iron infusions;
- contraceptive procedures;
- ECG testing;
- spirometry;
- health assessments;
- travel medicine;
- occupational health services; and
- other diagnostic or treatment procedures.
The insurer should understand the actual procedures performed at the medical centre.
Practices undertaking higher-risk or specialist procedures may require different insurance arrangements from a standard general practice.
Public Liability Insurance for Medical Centres
Public Liability insurance covers different exposures from Entity Medical Malpractice.
For example, a patient who suffers an injury because of a physical hazard at the premises may potentially give rise to a Public Liability claim.
An allegation arising from diagnosis, treatment, nursing or another professional healthcare service may instead involve Medical Malpractice or Professional Indemnity insurance.
This distinction is important because Public Liability policies commonly contain exclusions relating to professional services.
We can review the interaction between the policies to reduce the risk of an unintended gap between Public Liability and Medical Malpractice cover.
Property Insurance for Medical Centres
Medical practices can have substantial investment in their premises.
Property requiring insurance may include:
- medical centre fit-out;
- furniture;
- computers and IT equipment;
- examination equipment;
- diagnostic equipment;
- ECG machines;
- sterilisation equipment;
- refrigerators;
- medical supplies;
- office equipment; and
- other contents owned by the practice.
Where the practice owns the premises, building insurance may also need to be considered.
Accurate replacement values are important, particularly where a medical practice has undergone a substantial specialist fit-out.
Medical Equipment Breakdown
Medical centres rely on a range of electrical, electronic and medical equipment.
Depending on the practice, breakdown insurance may be relevant for items such as:
- medical refrigeration;
- diagnostic equipment;
- sterilisation equipment;
- computer systems;
- air-conditioning equipment; and
- other insured machinery or electronic equipment.
The appropriate cover depends on the equipment and the individual policy wording.
Vaccines and Refrigerated Medical Stock
Many GP practices store vaccines and other temperature-sensitive medical products.
A failure of refrigeration or power can potentially result in stock being unusable.
Medical practices holding significant quantities of refrigerated stock should consider whether their insurance adequately addresses:
- refrigerated stock;
- deterioration following insured breakdown;
- equipment breakdown; and
- applicable policy limits and excesses.
Cover varies significantly between insurers and should be specifically checked.
Business Interruption Insurance for Medical Practices
Property damage can affect a medical practice even when the physical repair cost is relatively modest.
A serious event could leave consulting rooms unavailable, damage medical equipment or prevent the practice from operating from its normal premises.
Business Interruption insurance can potentially provide cover for insured loss of income and additional operating costs following insured property damage.
When reviewing Business Interruption insurance, consideration should be given to:
- practice revenue;
- ongoing fixed expenses;
- additional costs of operating elsewhere;
- time required to reinstate specialist fit-out;
- replacement of medical equipment; and
- the appropriate indemnity period.
Simply selecting a standard Business Interruption limit without considering how the practice actually operates can leave the business inadequately protected.
Cyber Insurance for Medical Centres
Cyber risk is particularly important for medical practices.
Medical centres can hold significant quantities of sensitive information including:
- patient medical records;
- pathology and diagnostic results;
- Medicare information;
- contact information;
- billing information;
- employee information;
- referral information; and
- other sensitive health data.
Practices also rely heavily on:
- practice-management software;
- electronic patient records;
- email;
- cloud services;
- online booking systems;
- Medicare systems;
- electronic prescriptions; and
- other connected healthcare technology.
A cyber incident could therefore create both a privacy issue and a serious interruption to the practice.
Cyber Insurance can potentially provide cover for events including:
- ransomware;
- cyber attacks;
- privacy breaches;
- unauthorised access;
- data restoration;
- forensic investigation;
- incident response;
- notification and crisis-management costs;
- certain third-party claims; and
- business interruption following an insured cyber event.
The exact cover varies between insurers.
Medical Practices and Privacy Risk
Health information receives particular protection under Australian privacy law.
Medical practices should therefore consider cyber and privacy risk as a core business exposure rather than simply an IT issue.
A privacy incident could potentially arise from a sophisticated cyber attack, but it can also result from events such as:
- compromised email accounts;
- misdirected patient information;
- unauthorised system access;
- stolen devices;
- compromised credentials; or
- other loss or disclosure of patient information.
Cyber Insurance should be considered alongside the practice’s own privacy, information-security and incident-response procedures.
Management Liability and Directors & Officers Insurance
The owners and directors of a medical centre can face exposures that are separate from clinical malpractice.
Depending on the policy, Management Liability insurance may provide cover for certain:
- directors and officers claims;
- employment practices claims;
- regulatory investigations;
- defence costs; and
- statutory liability exposures.
For larger medical groups, a standalone Directors & Officers Liability policy may be more appropriate than a standard Management Liability policy.
The appropriate structure depends on the ownership and size of the organisation.
Employment Practices Liability
Medical centres commonly employ a mixture of:
- reception staff;
- practice managers;
- nurses;
- administrative employees;
- allied health staff; and
- other support personnel.
Employment disputes can involve allegations such as unfair dismissal, discrimination, harassment or other employment-related conduct.
Employment Practices Liability may be available within a Management Liability policy, subject to its terms, exclusions and limits.
Medical Centre Accreditation and Risk Management
Australian general practices can participate in the National General Practice Accreditation Scheme and be assessed against the RACGP Standards for general practices.
Accreditation and insurance serve different purposes.
Accreditation focuses on the quality and safety systems operating within the practice, while insurance provides financial protection against specified insured risks.
From an insurance perspective, strong systems concerning areas such as:
- patient identification;
- clinical records;
- information security;
- follow-up and recalls;
- infection prevention;
- staff qualifications;
- medical equipment; and
- vaccine management
can also be important indicators of how the practice manages risk.
Cyber, Medical Malpractice and Practice Systems Can Overlap
Not every event fits neatly into one insurance policy.
For example, a system failure could potentially involve a combination of:
- technology failure;
- patient information;
- professional services;
- business interruption; and
- potential patient harm.
This is one reason why an insurance program should be reviewed as a whole rather than purchasing each policy independently without considering how the covers interact.
Claims-Made Medical Malpractice Insurance
Medical Malpractice, Professional Indemnity and Management Liability policies are commonly written on a claims-made basis.
Continuity of cover can therefore be very important when changing insurers.
Consideration should be given to:
- retroactive dates;
- previous claims;
- known circumstances;
- previous notifications;
- continuity provisions;
- changes in business activities; and
- policy notification requirements.
A lower premium should not be considered in isolation if moving insurers materially changes historical protection or policy coverage.
Medical Centres With Multiple Locations
Medical practice groups operating from more than one location can create additional insurance considerations.
The insurance program should accurately identify:
- all insured entities;
- all practice locations;
- services performed at each location;
- property values;
- medical equipment;
- revenue;
- staff numbers; and
- practitioners operating from each site.
Acquisitions and new practice locations should also be reviewed when they occur rather than waiting until the next annual renewal.
Why Use a Specialist Healthcare Insurance Broker?
Insurance for a medical centre is more than purchasing a standard Business Pack.
Mercantile Insurance Brokers can review:
Your Medical Centre Entity
We establish which companies and entities need to be insured.
Your Doctors and Practitioners
We consider how doctors, employees and contractors interact with the practice’s insurance.
Your Clinical Services
We identify the procedures and healthcare services actually provided from the practice.
Your Entity Medical Malpractice Exposure
We consider the potential liability of the medical centre separately from the individual Medical Indemnity insurance carried by practitioners.
Your Property and Equipment
We review medical equipment, specialist fit-out, contents and other property exposures.
Your Business Interruption Exposure
We consider the financial impact if insured property damage prevents the practice from operating.
Your Cyber Exposure
We consider the sensitive patient information held by the practice and its dependence on technology.
Your Management Exposure
We consider risks affecting the practice owners, directors and management.
Our objective is to arrange an insurance program around the actual operations of the medical centre, rather than simply applying a generic business classification.
Medical Centre Insurance Australia
Mercantile Insurance Brokers can assist independently owned medical practices and larger medical groups throughout Australia.
We can review insurance for:
- GP practices;
- medical centres;
- family practices;
- multidisciplinary practices;
- multi-location medical groups;
- occupational health practices;
- specialist GP clinics; and
- other primary healthcare businesses.
If you already have insurance, we can review the existing program to identify material gaps, unusual exclusions, inadequate limits or areas where the policy no longer reflects your current operations.
Frequently Asked Questions About Medical Centre Insurance
What insurance does a medical centre need?
Depending on its operations, a medical centre may require Entity Medical Malpractice or Professional Indemnity, Public Liability, Property, Business Interruption, Cyber Insurance, Management Liability, Workers Compensation and other specialist covers.
Does a medical centre need Medical Malpractice insurance if the doctors have their own Medical Indemnity?
Potentially, yes. The organisation operating the medical centre can have exposures that are separate from the professional liability of individual doctors. Entity Medical Malpractice insurance should therefore be considered for the practice itself.
What is Entity Medical Malpractice insurance?
Entity Medical Malpractice insurance is designed to protect an organisation against certain claims arising from professional, clinical or healthcare services provided by or on behalf of the insured entity, subject to the particular policy wording.
Are independent contractor doctors covered by the medical centre’s insurance?
Not automatically. The treatment of independent practitioners and contractors differs between policies. Their contractual arrangements and the definitions contained within the medical centre’s insurance should be reviewed.
Are practice nurses covered by medical centre insurance?
This depends on the policy and the services they provide. Nurses and other healthcare professionals should be correctly disclosed to the insurer and the relevant policy definitions should be checked.
Does Public Liability cover medical treatment claims?
Generally No, Public Liability and Medical Malpractice insure different exposures. Claims arising from professional healthcare services may be excluded from Public Liability and need to be considered under Medical Malpractice or Professional Indemnity insurance.
Does medical centre insurance cover vaccines if a refrigerator fails?
Some policies may provide cover for deterioration of refrigerated stock following an insured event or insured equipment breakdown. This should not be assumed. The cover, limits and conditions should be specifically checked.
Do medical centres need Cyber Insurance?
Cyber Insurance should be seriously considered because medical centres hold sensitive patient health information and rely heavily on practice-management systems and other technology to operate.
Does a medical centre need insurance for its fit-out and equipment?
A medical centre may have substantial value in fit-out, medical equipment, computers and other contents. These values should be considered when establishing Property Insurance sums insured.
Can Mercantile review an existing medical centre insurance program?
Yes. We can review existing policies to assess the insurance structure, policy limits, material exclusions and whether the program continues to reflect the practice’s current operations.
Request a Medical Centre Insurance Review
If you operate a medical centre, GP clinic or general practice, contact Mercantile Insurance Brokers to discuss your insurance requirements.
We can review your existing policies or approach the insurance market for alternative terms.
Phone: 1300 310 467
Mercantile Insurance Brokers Pty Ltd