Why it is important to annually review your current Medical Malpractice Cover limits and scope of cover?

Taking out medical malpractice insurance is not a once-off administrative task. Your practice changes over time. You may begin performing new procedures, employ additional healthcare professionals, open another consulting room or start doing locum work. The cost of defending and settling medical malpractice claims can also change, while insurers may update policy terms, limits and exclusions.

A policy that was appropriate when you first arranged it may no longer provide suitable protection. An annual review gives you and your broker an opportunity to compare your current practice with the information recorded by the insurer. It also allows you to check whether your indemnity limit remains appropriate and whether important features such as your retroactive date, annual aggregate and scope of cover are still correct.

The review should ideally take place before renewal, but you should not wait for the annual review if a significant change happens during the policy year. Some changes must be disclosed as soon as they occur.

What should an annual medical malpractice insurance review cover?

A meaningful review goes further than checking the renewal premium. It should examine three broad questions:

1. Does the insurer have an accurate description of the work you perform?
2. Would the policy respond to the risks arising from that work?
3. Is the available financial limit sufficient for a serious claim?

These questions sound straightforward, but the answers can change considerably from one year to the next.

Your scope of practice may have changed

Medical malpractice insurance is underwritten according to the professional activities disclosed in your application. The insurer considers your registration, specialty, procedures, practice setting and patient profile when assessing the risk. If those details change and the policy is not updated, the insurer may be assessing a different practice from the one you are actually operating.

Changes that should prompt a discussion with your broker include:

• Introducing a new procedure or treatment
• Expanding into a different clinical area
• Starting or stopping obstetric work
• Performing more invasive or surgical procedures
• Beginning telemedicine consultations
• Providing sedation or administering anaesthesia
• Opening an additional practice location
• Working at a new hospital or clinic
• Beginning locum, sessional or after-hours work
• Treating patients in another country
• Taking on public-sector work
• Increasing the number or type of patients you treat

As Genoa explains in its guidance on scope of practice, its medical malpractice cover applies to declared private-practice activities performed within the practitioner’s registered scope. Public-sector work is not automatically included unless the appropriate endorsement has been arranged.

There is an important difference between being clinically qualified to perform a procedure and having that procedure included in your insurance declaration. Both need to be correct. If you are uncertain whether a new activity falls within the policy, ask before you begin performing it.

Your indemnity limit may no longer be sufficient

The limit of indemnity is the maximum amount the insurer will pay for a covered claim or group of claims, subject to the wording of the policy. We currently offer access to medical malpractice indemnity limits ranging from R1 million to R50 million. The fact that a limit is available does not mean it is suitable for every practitioner.

Your appropriate limit will depend on factors such as:

• Your specialty and clinical activities
• The types of procedures you perform
• The possible severity of patient injury
• Your patient numbers
• Your claims experience
• The age and needs of your patients
• Your contractual obligations
• Whether defence costs reduce the available limit
• Whether the limit applies per claim or in the annual aggregate

A practitioner who performs minor office-based procedures may have a different exposure from an obstetrician, surgeon or anaesthetist. However, practitioners in traditionally lower-risk fields should not assume that a low limit will always be adequate. A delayed diagnosis, medication error or failure to refer can also result in a serious claim.

Your broker cannot predict the exact value of a future claim. The purpose of the annual review is to make a reasoned assessment based on the work you currently perform and the possible financial consequences of a serious allegation.

The annual aggregate needs separate attention

Practitioners sometimes focus on the limit for one claim and overlook the annual aggregate.

The annual aggregate is the maximum amount available for all covered claims made and reported during the policy period. If several claims arise in the same year, each payment may reduce the amount remaining for the others.

For example, a policy may provide a R10 million limit for any one claim and a R10 million annual aggregate. If one covered claim uses R8 million, only R2 million may remain for another claim during that policy period. The precise operation of the limit will depend on the policy wording, including how defence costs are treated.

Genoa offers reinstatement options for practitioners who require additional aggregate protection. A reinstatement may restore some or all of the indemnity limit after it has been reduced by a claim, subject to the terms of the selected cover.

During the annual review, ask:

• What is my per-claim limit?
• What is my total annual aggregate?
• Can the limit be reinstated?
• How many reinstatements are available?
• Do legal defence costs reduce the limit?
• Are any lower sub-limits applied to particular benefits?

A headline limit only tells part of the story. You need to understand how much protection would remain after the first serious claim.

Medical malpractice claims can become more expensive

The possible cost of a claim changes over time. Medical expenses increase. The cost of professional caregiving, therapy, assistive equipment and adapted accommodation may rise. Claims involving permanent disability may include future care and loss of earning capacity over many years.

Legal proceedings may also require evidence from several medical experts, particularly where causation and long-term prognosis are disputed. This means an indemnity limit that appeared substantial several years ago may provide less practical protection today.

The annual review is an opportunity to consider current claims trends without reacting to isolated headlines. Your limit should be based on your real exposure, not simply on the minimum amount available or the limit selected by a colleague.

Genoa’s guidance on indemnity limits for specialist doctors also makes the point that the appropriate limit depends on the practitioner’s specialty and individual risk exposure.

New employees, locums and practice structures may require separate cover

A growing practice often means more staff, more patients and increasingly complex working arrangements. However, practitioners should not assume that everyone working for or from the practice is automatically covered under an individual doctor’s medical malpractice policy.

Under Genoa’s medical malpractice cover, a doctor is generally insured individually for their own declared professional activities. An individual doctor’s policy does not ordinarily cover other doctors or locums working in the practice. Each doctor or locum therefore needs to arrange their own individual policy, whether they pay the premium themselves or the practice pays it on their behalf.

Maintaining separate cover also gives each doctor control over their own policy, limits and continuity of insurance. It can help protect an individual doctor’s claims history and loss ratio from claims arising from another practitioner’s work.

If the doctor operates through a practice entity and employs other doctors, the practice may also require a separate entity policy. This protects the legal entity against claims brought against it in connection with the provision of healthcare services. It does not remove the need for the individual doctors to maintain their own cover.

Different arrangements may apply to entities such as emergency or casualty practices and pathology laboratories that employ permanent healthcare professionals and locums. Subject to Genoa’s underwriting requirements, an entity policy may cover the practice entity together with specifically named or listed doctors. Contracted-in doctors are not ordinarily included, while specialists generally require their own individual policies.

Administrative staff and personal assistants may be covered by extension under an individual doctor’s policy, but only while carrying out their specific duties for that doctor. Fully employed nurses may also be added at no additional premium, provided their names, qualifications and relevant details are disclosed to Genoa and they are recorded on the policy.

Students may be noted on the policy by prior arrangement with Genoa. However, the applicable sub-limit should be reviewed carefully to determine whether it provides adequate protection. The supervising or mentoring doctor may also be included in a claim arising from a student’s actions, particularly where inadequate supervision is alleged.

As part of the annual review, tell Shackleton Risk about:

• Doctors, locums, nurses or other clinical staff who have joined or left the practice
• Changes to employment or contracting arrangements
• Students working under your supervision
• The creation or restructuring of a practice entity
• Changes in the duties performed by administrative or clinical staff
• Any new specialist services offered through the practice

Shackleton Risk can then help determine which individuals may be included under an existing policy, who requires separate individual cover and whether the practice itself needs an entity policy. All practitioners and entities requiring cover should be correctly named and recorded in the relevant policy documents.

Your practice locations may have changed

Medical practitioners often work from more than one location. You may consult from private rooms, perform procedures at a hospital, assist at a day clinic or provide occasional services elsewhere. At renewal, confirm that all relevant locations and facilities have been disclosed.

A change of premises may also introduce risks that are not strictly medical malpractice risks. For example, damage to equipment, interruption of business, injury caused by the physical condition of the premises or a cyber incident may require different insurance.

An annual review with your broker can help identify where professional indemnity ends and where separate practice, public liability, cyber or business insurance may be needed. Medical malpractice cover is important, but it is not designed to insure every risk faced by a medical practice.

Your retroactive date must remain correct

Genoa’s medical malpractice insurance operates on a claims-made basis. This means that the policy generally needs to be active when the claim is first made and notified. The incident must also have occurred after the retroactive date shown in the schedule, subject to the policy terms.

The retroactive date is one of the most important details on a claims-made policy.

As Genoa explains, it marks the earliest date on which the incident giving rise to a claim must have occurred for the policy to respond. If you first arranged uninterrupted claims-made cover in 2020, your retroactive date may reflect that original date. If it is preserved at each renewal and accepted when changing insurers, work performed from that date may remain within the policy’s time period.

If the retroactive date is incorrectly moved forward, earlier work could fall outside the cover. Check the date every year. Do not assume that it has automatically carried over correctly, particularly if you have changed insurer, broker, practice entity or policy structure.

Known incidents and potential claims must be disclosed

Renewal is not only about future risk. You also need to tell the insurer about claims, complaints and circumstances that arose during the previous policy period. A reportable circumstance may include an unexpected clinical incident, serious adverse outcome, patient threat, request for compensation, attorney’s letter, HPCSA complaint or other event that could reasonably develop into a claim.

You should report these matters when they arise rather than waiting for renewal. However, the annual review offers another opportunity to check that all known matters have been properly notified and acknowledged. Do not omit an incident because you believe the allegation has no merit. Notification does not amount to an admission of liability.

With claims-made cover, the timing of notification can be essential. A matter known during one policy period but only reported after that policy has ended may create serious difficulties. Ask your broker for written confirmation that every notification has been received and referred to the appropriate claims team.

Policy terms and exclusions may change

Renewal documents should never be filed without being read. An insurer may amend definitions, conditions, exclusions, excesses, sub-limits or notification requirements. Even a small wording change can affect how the policy responds. Compare the new schedule and wording with the previous year’s documents. 

Pay particular attention to:

• The insured name and practice entity
• The professional activities declared
• The limit of indemnity
• The annual aggregate
• Reinstatement benefits
• The policy excess
• The retroactive date
• Territorial and jurisdictional limits
• Regulatory defence cover
• Cyber and privacy exclusions
• Employee and locum arrangements
• Notification conditions
• Any new endorsements or exclusions

If a term is unclear, ask for an explanation in writing. Insurance language can be technical, but you should still understand the main protections and limitations before accepting renewal.

Your excess may no longer suit your finances

The excess is the amount the practitioner or practice must pay towards a covered claim, where applicable. A higher excess may reduce the premium, but it also increases the amount you need to fund when a claim arises. An excess that was manageable for an established practice may not suit a new or recently expanded practice with tighter cash flow.

Check whether the excess applies once per claim, to defence costs, to damages, or differently across sections of the policy. The goal is not necessarily to select the lowest excess. It is to choose one that makes financial sense and would not delay the proper handling of a claim.

Your contractual obligations may have changed

Hospitals, clinics, practice groups and other organisations may require practitioners to maintain a specified level of professional indemnity cover. If you have entered into a new admitting, consulting, employment or service agreement, check its insurance provisions. The contract may require a particular limit, proof of annual cover or protection for certain activities.

Do not assume that accepting a contractual insurance requirement automatically means your current policy satisfies it. Send the relevant clause to Shackleton Risk for review from an insurance perspective.

You should also be cautious about agreements that attempt to make you responsible for liabilities beyond your ordinary professional negligence. A professional indemnity policy may exclude liability assumed purely under contract. Legal advice may be needed before signing such an agreement.

Retirement, emigration and reduced practice require planning

Reducing your hours or stopping practice does not immediately remove the possibility of a claim. A patient may raise an allegation months or years after the treatment occurred. This is particularly relevant in areas where an injury or its cause may only become apparent over time. Because Genoa’s cover is claims-made, cancelling the policy without arranging appropriate protection may leave you exposed to later claims arising from earlier work.

Speak to Shackleton Risk before you:

• Retire
• Emigrate
• Close your practice
• Stop private practice
• Move from a higher-risk specialty into a limited scope
• Take an extended career break
• Cancel or replace your existing policy

Run-off cover or another extended reporting arrangement may be required. These options should be discussed before the active policy ends. Genoa’s guidance on early termination explains why cancelling claims-made medical malpractice insurance without considering earlier work can create a significant gap.

What should you prepare for your annual review?

A productive review is easier when your broker has current and complete information.

Before the discussion, gather:

1. Your current policy schedule and wording
2. Details of all professional activities
3. A list of procedures you perform
4. Your current registration and specialty details
5. Practice locations and facilities used
6. Employee, locum and contractor information
7. Patient and procedure volumes, where requested
8. Claims and incident information
9. New contracts containing insurance requirements
10. Plans to expand, reduce or change the practice
11. Your current retroactive date
12. Any questions about exclusions or limits

Do not worry if you are unsure which changes are relevant. Tell Shackleton Risk what has changed, and we can help determine what needs to be referred to Genoa.

Questions to ask at every renewal

Your annual review should leave you with clear answers to the following questions:

1. Is my profession and specialty described correctly?
2. Are all my procedures and services declared?
3. Are the correct practitioner and practice entities insured?
4. Are my employees and locums appropriately covered?
5. Is my indemnity limit suitable for my current risk?
6. What annual aggregate is available?
7. Do I have reinstatement protection?
8. Are defence costs inside or outside the indemnity limit?
9. Is my retroactive date correct?
10. What incidents and circumstances must I report?
11. Have any exclusions or conditions changed?
12. What should I do if my practice changes during the year?
13. What protection will I need if I retire or stop practising?

A renewal should never be reduced to the question, “Has the premium increased?” Cost matters, but the purpose of the policy is to provide meaningful protection when a serious allegation arises.

Do not wait until renewal to report a change

The annual review is an important checkpoint, but it should not be the only time you speak to your broker. Contact your broker during the policy year if you introduce a new procedure, change specialty, open another practice, employ a practitioner, begin working in a different sector or become aware of a potential claim.

Some changes may require the insurer’s approval before the new activity begins. Early disclosure gives your broker an opportunity to assess the change and confirm the appropriate cover.

FAQs

How often should I review my medical malpractice insurance?

You should conduct a full review at least once a year, ideally before your policy renews. However, you should contact your broker immediately if your practice changes during the policy period. Do not wait for renewal if you introduce a new procedure, change specialty, employ another practitioner, open a new location or begin working in a different sector.

What happens if I forget to disclose a change in my scope of practice?

Medical malpractice cover is arranged according to the professional activities disclosed to the insurer. If a claim arises from an activity that was not declared or accepted, your cover may be affected. Tell Shackleton Risk about proposed changes before you begin the new work so that Genoa can assess the risk and confirm whether the policy needs to be amended.

How do I know whether my indemnity limit is high enough?

There is no single limit that suits every practitioner. The appropriate amount depends on your specialty, procedures, patient profile, practice structure and the possible severity of a claim. Your review should consider the limit for each claim, the total annual aggregate, defence costs and any reinstatement options. Shackleton Risk can help you assess these factors rather than choosing a limit based only on price.

Why must I check my retroactive date every year?

Genoa’s medical malpractice insurance is provided on a claims-made basis. The retroactive date generally determines how far back the policy can respond to professional work performed before the current policy period. An incorrect date could leave earlier treatment outside the cover. It is particularly important to check this date when changing insurers, restructuring a practice or replacing an existing policy.

Do I still need a review if nothing in my practice has changed?

Yes. Even if your clinical work appears unchanged, policy terms, excesses, exclusions and indemnity limits may have been amended. The potential cost of medical malpractice claims may also increase over time. An annual review confirms that your details remain accurate and that the protection selected still makes sense for your current risk.

This article provides general information and does not constitute legal, medical or insurance advice. Cover is subject to underwriting and the terms, conditions, limits and exclusions of the applicable policy. Practitioners should obtain advice based on their individual practice arrangements.