This chapter has been written by consulting senior staff of all the providers of medical indemnity cover listed below. Some of their replies and re-drafts have been included in the text.

SUBSCRIPTIONS or premiums to Medical Defence Organisations (MDOs) are a major part of most non-principals’ expenses. Premiums for each medical speciality reflect not only the risk of that speciality but also any crown indemnity. Hospital posts usually have crown indemnity. and so premiums are much cheaper. Many of us will face complaints during our careers and because we are human, we shall make mistakes. MDOs should ease the stress of these events. The fact that the three mutual companies, the Medical Defence Union, the Medical Protection Society and the Medical and Dental Defence Union of Scotland charge no more for non-principals than principals suggests that non-principals are no greater an insurance risk. None have admitted to having data to support this!

In choosing suitable cover, one should carefully consider not just the actual costs but also the detail of the benefits and services offered by the company. Will they be there supporting you in the court room during your malpractice suit? How easy is it to contact them and get advice? Do they help you to identify and reduce the risks?
Mutual societies do not have legally binding contracts with subscribers. Their benefits are discretionary on a decision of their Boards. Benefits are usually provided where a problem has arisen out of a doctor’s management of a patient or the exercise of clinical judgement. Normally they would provide unlimited cover given sufficient funds. Commercial insurers are required to have a specific, legally binding contract with customers. Their maximum cover is limited (usually to £5-10 million). Their underwriters are regulated by the Department of Trade and Industry (who should ensure they are big enough to trade).

Policies with commercial companies are on a 'claims made’ basis. This means the insured doctor is only covered for claims arising from incidents which both occur and are reported whilst the policy is in force. When the policy expires, so does the cover unless a run off payment is made. The mutual organisations offer ‘occurrence or incident based’ schemes which give protection for claims arising from incidents that occurred during the subscription period no matter when they are reported, even if it is many years after that subscription period has ceased. These provide ongoing protection at retirement or death - the latter prevents one's estate being liable for claims.

‘Claims made’ policies do not automatically offer protection against claims that are initiated after a policy has terminated. If such additional protection is required, then with few exceptions you must pay extra for it. This extra cover is called ‘run off cover’ or ‘tail’ and it extends the time during which claims can be reported to the insurer provided they arose from medical services rendered between the date the policy was initiated and its termination date.

Ordinarily, ‘claims made’ policies have a Retroactive Date which represents the effective date of the coverage. This date will remain the same each time the policy is renewed without any gap. This date can be transferred from one insurer to another provided that prior acts or ‘nose’ cover is purchased from the successor company.

In reaching a judgement when considering occurrence based or claims based arrangements for medical indemnity, it is essential to establish the total costs of each and the cover obtained for that cost to enable true comparison for the respective levels of protection offered.

When a doctor leaves a company, his/her previous risk is usually taken on by the new company. It is wise to get this confirmed in writing because if that new company/organisation does not take on previous risk, it will be necessary to buy ‘run off’ cover. The need to have such cover has particularly been associated with commercial companies but is not unknown with the mutuals. The MDU introduced a version of ‘claims made’ membership in 1992, known as contemporary, which offered lower subscriptions, particularly in the first four to five years. The cover for this policy ceases unless a run off payment is made. The MIA’s premium for run off cover for 7 years is approximately equivalent to one year's normal premium. The cost of this should be balanced against normal premiums before reaching a conclusion on the financial decision.

Non-principals who decide to pay anything other than the full rate should expect their organisation to request evidence of their lesser work/income, especially in the event of a claim.

The rates for the various Medical Defence Organisations are given in the following pages.

Medical Defence Union

The MDU also have an income-related subscription scale which is included in their Band 1 booklet. These rates may enable you to calculate your subscription more easily but beware. If your taxable income was up to £6000 you’ll pay more using this scale than if you use the GP scales. The MDU are currently reviewing subscriptions for GP locums and encourage members to contact them and discuss their requirements. The MDU have freephone numbers for membership enquiries (0800 716376 and advice 0800 716646). Payments made by monthly direct debit are subject to an interest charge.

Medical Protection Society

The MPS has a low-call membership helpline: Telephone: 0845 187187. Payments can be made by monthly direct debit without additional interest charges.

Medical and Dental Defence Union of Scotland

Membership helpline: Telephone: 0141 221 3663.

The Cambridge Locum Group have been accepted by the MDDUS for a 5% discount on membership costs equivalent to that of a group practice. The Union does not require all members of the group to join but welcomes as many as want to join. This is the first such arrangement the NASGP is aware of. The MDDUS has said that it welcomes applications from other non-principal groups.