Understanding medical indemnity insurance: why should you choose contractual indemnity cover?



Whether you are a newly qualified clinician or have been practising for years, the search for medical indemnity insurance can be confusing and frustrating. If you don’t understand the terms used by insurance companies, how are you supposed to know which cover is the best one for you?


Two such terms are ‘discretionary’ and ‘contractual’ - you’ll need to understand what these mean and how they affect you, especially in the event of a patient claim.


What is discretionary indemnity cover?

Let’s start with discretionary indemnity cover - this relates to cover that is provided at the full discretion of the insurer. Discretionary claims can only be settled once they have been reviewed and approved by the insurance company’s board. Each case is considered individually, and the board may decline to accept your claim for financial reasons - there is no guarantee that the company will pay out. Plus, the cover is not backed by any kind of contract.


What is contractual cover?

The key difference between discretional indemnity cover and contractual indemnity cover is that contractual indemnity is provided by way of a contractual guarantee, in the form of an insurance policy. There is an agreement between you and your insurer that compensation will be paid out in the event that a claim is made against you.


Contractual policies are fully regulated by the Financial Conduct Authority (FCA). They clearly stipulate policy inclusions and exclusions, so you can make a more informed decision on the level of cover you need, whilst knowing where you stand with your cover. Insurers (like us) have a legal duty to our clients and must have enough money to cover our claims.


Our clients are at the heart of everything we do. That’s why we only offer contractual cover - we believe it’s the most comprehensive option available to medical professionals.


We’re here to make things easy for you. Thanks to our team of specialist healthcare insurance experts and seamless client journey, we’ll be on hand to help guide you through the process when arranging your contractual medical indemnity insurance.


Visit our website to learn more about our contractual cover, get a free quote, or speak to a friendly member of our team.


Charlotte Bark

Vice President – Healthcare

M: +44 (0)7741 232 107

E: charlotte.bark@lockton.com


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