Facing challenges in a time of flux
The professional indemnity insurance market experiences fluctuations driven by demand and supply. But how has this changed during the coronavirus pandemic and what will it mean for physiotherapists? BMS Risk Solutions Managing Director Affinity, Shamus Breen, explains.
Changes in the professional indemnity (PI) market in Australia and around the world, which began being felt in 2017 and have continued throughout the global COVID-19 pandemic in 2020–21, are expected to affect a broad range of professions.
Many factors have influenced the current PI market: continued losses, insurers looking to reduce risk, rising premiums and a widespread reduction in insurers’ capacity. This is known as a ‘hard market’,
a condition where insurance premium rates are increasing and insurers are less willing to negotiate terms. Underwriting standards tighten and insurers closely monitor insurance rates and manage coverage capacity.
‘Physiotherapist professional indemnity insurance isn’t exempt from the hardening market, with many insurers focusing on underwriting profits,’ Shamus says.
‘The local market is limited to a small number of key insurers willing to write allied health exposures, and it is clear that their appetite for new business is reducing.
Shamus says many factors have led to a current marketplace where premiums have risen (even where insureds’ revenues are down due to COVID-19), with policy limits, deductibles and breadth of coverage coming under continued pressure.
‘Insurers are cautiously monitoring the risks arising from COVID-19 and the scope of claims notified, particularly in relation to inquiries into poor risk management practices or infection breakouts.’
Shamus says insurers are responding to the changing market in different ways. For some, imposing an absolute COVID-19 exclusion is non-negotiable, while others are seeking additional information about implementation and monitoring of risk mitigation protocols.
These include, but are not limited to, robust infection control policies, the availability and supply of adequate stocks of personal protective equipment and limitations to the movement and sharing of staff.
‘Insurers are becoming even more selective and, in some cases, are exiting some industries,’ Shamus says.
This is in light of long-running formal investigations, in particular Royal Commissions, which continue to expose vulnerabilities across the healthcare sector, as increasing media scrutiny serves to raise public awareness and expectations around the quality of care provided to disabled and aged care communities, Shamus says.
‘With exposures often falling in the grey area between general liability and medical malpractice/professional indemnity policies, there has been a noticeable shift as insurers seek to realign their appetites across both classes of insurance.
As a result, a change in general liability appetite can trigger re-evaluation of an insurer’s willingness to cover certain malpractice exposures for the same client,’ Shamus says.
Trends in the market show that insurance claims continue to arise from traditional treatment sources: regulatory complaints, slips and falls, and boundary violations.
Failing to adequately protect patient privacy is also squarely in the spotlight, with the Office of the Australian Information Commissioner stating that the health sector has consistently reported the most data breaches of any industry since the start of the Notifiable Data Breaches scheme in 2018.
The rapid adoption of telehealth has also created new concerns about healthcare best practice and the security of personal information.
While the rush to embrace telehealth has been necessary for patient and staff safety, it is clear that some illnesses or injuries can’t be effectively diagnosed remotely, Shamus says.
‘Telehealth potentially carries an increased risk of miscommunication and misdiagnosis due to an inability to conduct physical examinations and the potential for a break in continuity of care for new patients,’
Shamus says. ‘The added reliance on technology brings a complex web of risks that extend beyond the scope of medical malpractice or PI insurance and should be considered in conjunction with organisational, clinical and privacy law requirements.
‘Telehealth does, however, bring many benefits and efficiencies and post- COVID-19, there is an expectation that telehealth consultations will continue— forever changing the way allied health is delivered.’
Shamus says coverage for molestation claims has become increasingly challenging due to a market retraction in this area. It is now common for insurers either to completely exclude any loss associated with allegations of abuse or to severely sublimit coverage and/or provide defence costs cover only.
For physiotherapists, this is likely to mean that allegations of sexual misconduct or boundary violations could be excluded from your policy.
APA members who elect to take out insurance through BMS receive a $2 million sublimit relating to boundary violations, Shamus says.
Disclaimer: BMS Risk Solutions Pty Ltd is an Australian Financial Services Licensee 461594. This is general advice only and we have not considered whether it is suitable for your personal objectives, needs or financial situation. Please read the policy wording/product disclosure statement and financial services guide before making any decision about purchasing any policy.
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