Genoa Underwriting Managers launches new medical malpractice cover

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Genoa Underwriting Managers and underwriter Safire Insurance Company have launched a new product that covers doctors and specialists against increasing medical malpractice claims. They currently face exorbitant medical protection insurance premiums and healthcare costs are rising, putting good private healthcare out of reach of many patients and jeopardising many medical practices.

The product, which took 14 months to design, is intended to meet the challenges faced by South Africa’s private healthcare sector while helping to shield patients and medical aids from rocketing medical inflation.

Michael-John Damant, a director of Genoa, says that the new value offering, which is reinsured by Munich Re, will keep pace with the many challenges within this rapidly evolving local sector.

Up until now, 85% of South African medical practitioners have been insured by an offshore service provider, not only exposing them to punitive premiums due to the volatility of the local currency, but also offering no protection from the Financial Advisory and Intermediary Services Act and the South African Ombudsman of Short Term Insurance (OSTI).

The reasons for the sudden upswing in claims are complex and include patients’ increased awareness of their right to seek recompense and greater pressure from some legal practitioners who are eager to capitalise on this. Amendments to legislation governing the Road Accident Fund (RAF) have made damages claims from injuries sustained in motor vehicle accidents less profitable to personal injury lawyers, some of whom have now turned their attention to medical malpractice claims.

Since 2011, claims against healthcare professionals in South Africa rose by 35% and the value of the claims increased by 121%. (Medical Protection Casebook, August 2017). According to the Medical Protection Society SA, claims over R1 million increased nearly 550% in just 10 years while claims above R5 million grew by 900% between 2008 and 2013.

“An analysis of the market shows that medical claims are not only rising sharply but that doctors are increasingly becoming the targets of vexatious litigation. This has a direct correlation with the higher premiums which are charged every year. We are committed to making a positive contribution to the long-term sustainability of the medical sector in South Africa and are happy to be able to offer a claims made insurance policy with stable, sustainable premiums,” says Damant.

This product is available to select medical practitioners registered with the HPCSA (Health Professions Council of South Africa). Underwriters will take a more focused approach on assessing each practitioner’s risk profile, thereby charging the commensurate risk premium and avoiding cross-subsidisation of premiums for higher-risk practitioners by lower-risk practitioners.

“When coupled with low allocations to operating costs, this enables Genoa to focus on what’s most important – offering full protection and support to its clients,” he adds.

Support extends beyond just the payment of potential claims.

Mark Lynn, a director of ShackletonRisk Management, one of a broad national network of brokerages that will be marketing this policy, warns that medical malpractice claims are highly stressful with doctors experiencing considerable trauma when dealing with massive potential reputational damage that can have far-reaching consequences for their businesses.

All interactions will be face-to-face, both before and during the full life of the policy, as opposed to using call centres.

Pierre Bekker, CEO of Safire Insurance Company, adds that Genoa utilises mediation and other alternative dispute resolution techniques to reduce claim costs so that practitioners are not faced with a situation where their Limit of Indemnity has been eroded by unnecessary litigation or defence costs. 

“The quick and efficient resolution of valid claims and the rigorous defence of vexatious claims is backed firstly by an in house legal team and then by a team of medical and legal professionals from the top firms (MacRobert Attorneys, Clyde & Co, Weber Wentzel, Malatji Kanyane, Norton Rose Fulbright and Garlicke and Bousfield) in this field across the country,” Damant says. 

Another value-add comes with a partnership with Medical Practice Consulting (MPC) to offer CPD training to select practitioners. In addition, policy holders have access to relevant and innovative patient relationship management tips garnered from sound international research and supplemented with insights received from practitioners’ interactions through their daily dealings with their patients.

In the event of a claim, a doctor will receive personal coaching by a highly qualified medico-legal team on how to best deal with it and manage the associated trauma.

“From the get-go, as soon as a practitioner is notified of a potential claim by the HSPCA, we will ensure that the process is handled correctly. We will assist with responses and even attend the HSPSA hearings with the practitioner,” he explains.

The new policy offering also includes a number of extensions such as free fidelity cover of R25 000 for theft by employees, a good Samaritan extension and a premium holiday of up to three months to cover maternity leave or time taken for additional studies. The policy automatically includes an Extended Reporting Period (ERP) of up to 60 months and, subject to certain conditions, doctors also have the option to extend cover beyond the initial period stipulated.

For more information, visit www.genoa.co.za