Professional indemnity insurance: Nursing and Midwifery
Why professional indemnity insurance for nurses is essential.
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Professional indemnity insurance (PII) protects you against legal costs and compensation claims that come about as a result of professional advice or services you perform. Professional indemnity insurance is a requirement for all nurses in Australia to meet Nursing and Midwifery Board of Australia (NMBA) registration standard in order to practice.
Why do nurses need indemnity insurance?
The nursing industry features a diverse mix of working situations. For example there are entire nursing teams is hospitals as well as personal carers in homes and more. Regardless of where the nursing care takes place however, there's a genuine possibility of making errors. This includes:
- Administering the wrong medication to a patient
- Failing to carry out instructions properly to care for a patient
- Being wrongfully accused of unprofessional conduct either while performing clinical duties or administration work
- Giving incorrect advice to a patient
- Applying or removing dressings negligently, resulting in damage or injury to a patient
- Making a mistake or error in judgement due to being overworked
Professional indemnity insurance (PII) is designed to protect you in the event where you make a mistake and are sued. Although you take care to ensure these situations don't happens, PII will give you peace of mind knowing you're covered - just in case.
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Is indemnity cover not already included?
You may be offered some level of cover under your employer’s professional indemnity policy, but it’s also a good idea to compare your options cover for yourself. Some professional associations offer professional indemnity cover to members. You can also take out a policy from an insurance provider.
Professional indemnity insurance offers financial protection against the many risks nurses face, ensuring they can simply perform their vital jobs without having to worry about the damage their finances and careers would suffer if something went wrong.
In Australia, in order to fulfil your registration requirements you'll need to have adequate professional indemnity insurance if you are:
- A midwife
- An enrolled nurse
- A nurse practitioner
- A registered nurse
- Community health nurse
- An at home nurse (not including hospitals)
How does it protect nurses?
The nursing industry features a diverse mix of working situations. Hospitals house entire nursing teams with different specialties, while homes can host personal carers. Regardless of where the nursing care takes place however, there's a real possibility of making errors.
Professional indemnity insurance can help pay your legal costs, compensate you for your time if you are summoned to court, and pay compensation costs associated with being:
- Sued for malpractice or negligence. Such as from administering the wrong medication to a patient, giving incorrect advice to a patient, or applying or removing dressings negligently and injuring a patient.
- Sued for damages as a result of a public liability claim. This will not actually cover the public liability claim itself - public liability is a separate form of insurance.
- Sued for breaching intellectual property rights.
- Sued for defamation. This only applies if the defamation or libel claim is somehow connected with your work.
- Called before the Coroner. As a medical professional dealing with living patients, this is a real possibility.
- Reported to AHPRA. Reports can be filed not only by other medical practitioners but also members of the public, and can be for anything from suspected departure from professional standards, such as making a mistake while being overworked.
- Sued after performing a Good Samaritan act. This is any situation where you come forward to offer your professional help in a medical emergency, likely outside the workplace.
While being compelled to buy insurance is somewhat annoying, you can actually claim your PII premiums as a deduction on your tax return.
Policies provide cover for the cost of your legal defence, as well as compensation for your time required to attend court or an inquiry. If you are required to pay compensation or damages, this is catered for under a professional indemnity policy as well, as is the cost of hiring a public relations consultant to limit or repair any damage to your reputation.
Here's a sample quote to give you a rough idea of how much cover costs:
|Insurance type||Professional Indemnity|
|Cost estimate||$28.42 per month|
How much cover you need will depend on whether you're taking cover out your own professional indemnity insurance or if you're getting cover with your employer or association.
If you are taking out cover yourself, you'll need to ensure you're getting cover that is both adequate and appropriate. Luckily, insurers that offer PII will have standard policies they can tailor to your needs, if required.
You can expect this to cover $10 million per claim, with most policies capping payments at a certain level. Make sure it covers both:
- Claims made. This covers you against claims made while you're practising.
- Run-off. This protects your from claims after you've stopped practising.
If you have stopped practicing, you should still retain a decent level of run-off cover in case a claim is made against you by someone you've treated in the past.
What happens if you don’t have an appropriate level of cover?
If you don't have the appropriate level of cover you're not only putting your livelihood at risk should something go wrong but you also leave yourself vulnerable to having your application for registration or renewal refused by the NMBA.
In regards to buying PII for nurses or midwives, you've got a few options:
- Buy your own cover. You can buy your own cover either directly from an insurer or with the help of an adviser. This is generally suited to nurses and midwives that are self employed. If you do take out your own cover, you'll need to keep evidence of your insurance for at least five years.
- Cover through employer. You can be supplied cover through your employer and may be suitable to nurses or midwives that work for a single employer.
- Get cover with membership. You can get cover as an add on to your membership dues to organisations such as the Australian Primary Health Care Nurses Association (APNA). This may be suitable for everyone who is eligible.
No matter which option you choose, be sure to review and compare your options. If you have any doubts, reach out to the insurer, an adviser, your employer or association and check that you're making the right decision.
If you’re an enrolled nurses, midwives, nurse practitioner or a registered nurses you’ll need to have an appropriate and adequate level of cover as long practising. If you’re not practising but are register, you won’t need to have PII arrangements for that period.
However, once you do decide to stop practising, you’ll need to make sure you have an appropriate level of run-off cover, so that you’re protected from claims that arise from your actions at a later date.
What other insurance should I consider?
While PII is mandatory to practice as a nurse, there are two other forms of insurance that you should consider in your profession:
In Australia, the Nursing and Midwifery Board of Australia (NMBA) requires Nurses / Midwife's to take out PII in order to practice.
Public liability insurance help protect you against accidental injuries and damages that happen at your practice or at your patients house for example.
If you store information about patients then cyber liability insurance should be considered. It protects you against the expenses if this information is compromised.
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