How much cover should I have?

Each year, we are asked by many of our clients “How much medical Malpractice Insurance do I need?”

There is no right answer to this question.  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, could exceed the maximum limit of cover offered under the CFP Broker’s medical malpractice insurance policy of R10 million.

Below are some points to consider when making your decision:

1. The limit of cover needs to account for both the legal fees and any settlements awarded to the claimant.
2. How much cover can you afford (you need to weigh up your risk vs the cost) – you should always take the highest limit that you can afford.
3. Medical Malpractice claims are on the rise in both frequency and cost.
4. Imagine a scenario where you were the claimant, and due to the negligence of another professional you are no longer able to work.  How much would you claim?  Base the quantum on the remaining working years you have (your salary, including inflation, until age 65yrs) as well as any medical expenses you may have during the course of your treatment.
5. There are certain activities that would warrant you taking a higher indemnity limit – for example, treating:
   1. Minors
   2. High net-worth individuals
   3. Sport’s personalities or
   4. celebrities Foreigners
6. If you are planning to permanently cease to practice in South Africa (whether through emigration or retirement) you should select the highest option of cover that you can afford as you’ll only be offered run-off cover at the limit you had when you were last practicing.
7. Are a practice owner with exposure to public liability and vicarious liability claims.
8. Supply products to your patients and are exposed to products’ liability claims.

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!  We have yet to see the Defence Costs for regulatory complaints exceed R1 million.

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.

You need to make your own decision with regard to what limit of cover meets your requirements.  If you would like a higher limit of cover than R10 million, then you would need to contact CFP Brokers for a quote.