The broad value of professional indemnity insurance


Professional indemnity insurance is essential for all nurses and midwives.

In 2010, the Nursing and Midwifery Board of Australia (NMBA) set registration standards making it mandatory for all health practitioners in the 14 professions regulated under the Health Practitioner Regulation National Law Act to have appropriate professional indemnity insurance (PII) arrangements in place in relation to their practice.

A nurse or midwife may receive appropriate cover through membership of a professional body such as Australian Nursing and Midwifery Federation (ANMF) state and territory branches, or via their employer.

A self-employed nurse or midwife can also obtain cover directly from an insurer or insurance broker.

Associate Professor Lynette Cusack RN, Chair of the Nursing and Midwifery Board of Australia (NMBA), said PII arrangements were essential to help protect the public.

“Nurses and midwives need to assess whether their PII is adequate, given the area/s of practice they work in, their professional experience, the risks involved in their practice and any previous insurance claims made against them.”

Appropriate PII arrangements are important when considering the inherent everyday risks involved in the professions.

For example, a nurse or midwife might be sued for negligence or malpractice after administering the wrong medicine or making a clinical error due to workload stress.

Nurses and midwives must not practise unless they have appropriate PII arrangements in place and any practitioner that cannot produce evidence that demonstrates they are covered may have action taken against them.

In a recent example highlighting potential pitfalls, a Registered Training Organisation (RTO) in the Northern Territory who provides clinical training to both registered nurses and midwives reported concerns regarding the PII of some applicants.

The organisation requests applicants provide appropriate PII evidence but last year a number of nurses and midwives were unable to do so, believing their workplace covered them.

While many employers provide professional indemnity insurance for risks involved at work, arrangements can vary considerably from workplace to workplace and state to state, with some only providing limited cover such as workplace vicarious liability or malpractice insurance.

Most ANMF state/territory branches offer professional indemnity insurance as part of their membership, along with an extensive range of associated benefits including comprehensive industrial, professional and legal advice and representation.

The ANMF (Vic Branch) for example, covers members for professional indemnity (malpractice) up to $10 million, and provides run off cover that protects nurses and midwives against future claims years after they have stopped working from incidents that took place while they were practising.

However, in New South Wales the majority of nurses and midwives are covered for professional indemnity under NSW Health and state laws. The legal principle of vicarious liability is reinforced by provisions in the Employer Liability Act, whereby an employee cannot be held liable for negligence if their employer is also liable.

Employers are responsible for maintaining a variety of insurances in the event that they may be sued.

ANMF Senior Federal Professional Officer Julianne Bryce said all nurses and midwives must ensure they have full PII cover and can provide appropriate evidence if asked to do so.

If organisations are offering PII at a discounted rate it is important to look at the fine print and understand exactly what kind of support is available.

“Some policies offer limited legal support. You might get access to half an hour for free but then you are paying after that,” Ms Bryce says.

“ANMF state and territory branches give members the industrial and professional support they need that accompanies the professional indemnity insurance.

“It’s not just a matter of purchasing a product. What you’re getting as part of the service that’s provided by ANMF branches is the support you might need should you be in a position to require PII.”

Ms Bryce stressed there is a difference between an employer telling nurses and midwives they are covered and them actually providing a certificate that demonstrates the PII that the NMBA demands.

In a 2014 submission to the NMBA during a review of registration standards and guidelines on topics including PII, the ANMF argued that while employers provide vicarious liability cover, they do not usually provide PII cover.

It added that non-members had told ANMF officials they were unsure how their employer’s indemnity protects them and experienced difficulty obtaining written evidence of PII to meet NMBA audits.

“Nurses and midwives should not be misled about the provision of PII by employers,” the submission stated.

“The ANMF position remains consistent in that an employer’s indemnity policy which is conditional upon the nurse or midwife acting without gross negligence will not provide appropriate and full indemnity to the practitioner.”

Associate Professor Cusack said any nurse or midwife unsure if they are meeting the Board’s standard on PII could access detailed fact sheets online to help them understand the minimum requirements.

“The NMBA is committed to supporting nurses and midwives to practise within their legal obligations while at the same time providing safe care for the Australian community.”

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