How much cover should I have?

For a more comprehensive response to this question, please refer to our document entitled, “How much cover is enough?”

Unfortunately, liability insurance is not like car insurance. If you insure your car, you know at the outset what the value of the car is. The amount of a potential liability claim cannot be determined before you
decide on the limit of cover, because of the unpredictable nature of liability claims.  Given the unpredictability of liability claims, no-one, not even your insurance broker, can confidently assure you that any limit of cover you select is going to be enough for any claim that you might face.

If your proven negligence in rendering professional services leads to your patient’s permanent disability, the claim against you, and legal costs if you defend the matter and lose, will very likely exceed the maximum limit of cover offered under the CFP Broker’s medical malpractice insurance policy of R10 million.

If you want to base your cover requirements on factors other than the possibility of a worst-case scenario, please see our guidelines below, on other factors that you should consider when determining what limit of cover is adequate for you and/or your practice.  You should consider taking a limit of R10 million or a higher limit, if you:

  1. Treat minors, high net-worth individuals, sports’ personalities, other celebrities, foreigners or people who you know will soon be emigrating.
  2. Provide healthcare services of a nature where allegations of your negligence, could result in claims for death, hypoxic brain injuries, permanent disability or loss of amenities of life.
  3. Will be permanently ceasing to practice in South Africa in the next year or so, whether through emigration or retirement.
  4. Are a practice owner with exposure to public liability and vicarious liability claims.
  5. Supply products to your patients and are exposed to products’ liability claims.

All of you (unless you are a student or an intern) have the option of increasing your cover option either through your Association/Society/Membership company, or by contacting CFP Brokers, to R10 million.

This will be subject to payment for the higher limit of cover.

If you would like a higher limit of cover than R10 million, then you would need to contact CFP Brokers for a quote. In order to provide you with quotes for higher limits, you would be required to complete a

proposal form with information required by the underwriter, to determine your risk and what premium would apply. Depending on your claims’-history (this includes complaints against you to your regulatory body), insurers may not be willing to provide you with quotes for a higher limit of cover.

We can look at our claims’ statistics for the policies for healthcare practitioners that we look after (over 8,000). To date, the highest claim that we have seen was for around R8 million, but we believe that

claim to be inflated and without legal merit. If we have a look at averages, the average claim that we see falls way below R1 million.

Unfortunately, as a financial investment advisor would tell you, the past track record does not guarantee future performance- or in the case of liability- just because most of the claims that we see

currently do not exceed R1 million- this does not mean that none of you could experience a claim for a much higher amount.

In insurance- we talk about frequency and severity. We see high frequency of low severity claims against our practitioners and a low frequency of high severity claims. The bulk of the matters we deal

with are not for medical malpractice claims, they arise out of complaints to your regulatory bodies, very often where there has been no harm to a patient at all! So, for example, we see multiple

complaints regarding billing.

Each of you needs to make your own decision with regard to what limit of cover meets your requirements, weighing up many factors, including the cost of your cover If your only consideration when determining what an adequate limit of cover would be for you, is that you could cause your patient to suffer permanent disability, then our advice is buy the highest limit of cover that you can afford, with the highest excess (self-payment amount) that you can carry.

There are some that argue though, that when plaintiff attorneys become aware that you have a high limit of cover in place under your insurance, this can lead to higher claims. The plaintiff’s attorney and

their client’s decision to accept any proposed settlement offer, may be heavily influenced by the limit of cover that you have in place, and how close that settlement amount is to the limit you have in place.

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