Professional indemnity insurance

The Health Practitioner Regulation National Law (NSW) provides that a registered health practitioner, eg. a nurse or midwife, cannot practice their profession unless appropriate professional indemnity insurance arrangements are in place.

This Act came into force on 1 July, 2012, although the Australian Health Practitioner Regulation Agency (AHPRA) has required since 2010 that nurses and midwives attest, on an annual basis, that they have professional indemnity insurance or are covered by an appropriate insurance of their employer.

From a practical point of view, nursing employees in New South Wales have been, and remain, covered for professional indemnity because of the laws of New South Wales. The legal principle of vicarious liability has been reinforced in this state by the provisions of the Employee Liability Act. In simple terms, section 3 of the Employer Liability Act provides that an employee cannot be held liable for a wrong (eg. negligence) if their employer is also liable. Employers are responsible for maintaining a variety of insurances, including “liability” insurance in the event that they may be sued for faulty practices or products. However, this is not the case in all Australian States and Territories.

This presents problems for our members who:

– Work in states other than New South Wales eg. a nurse living in Tweed Heads may work the majority of their time in New South Wales, but do additional casual or part-time work in
Queensland; or

– Take short-term contracts interstate.
In the past, these members would have had to take out PII in order to work interstate – we now provide it as part of your membership.

Similarly, members working for a bankrupt employer whose insurances have not been maintained or nurses who may do some private nursing work secondary to their main employment would not be insured – subject to conditions, these circumstances are now covered.

As mentioned above, the Australian Health Practitioner Regulation Agency (AHPRA) requires that nurses and midwives declare that they hold professional indemnity insurance or are appropriately covered by their employer as a condition of registration. This has been a source of confusion for many members in New South Wales – you can now attest that you comply with AHPRA requirements without having to check your employer’s insurance status.

Finally, AHPRA requires nurses and midwives who do not fulfil recency of practice criteria to undergo supervised practice to re-register. Many members are unable to access supervised practice because they do not have professional indemnity insurance and organisations are not willing to provide it. These members will now be covered.

What does the cover provide?
Professional indemnity: $10,000,000 any one claim and $50,000,000 any one policy year.
Inquiry costs: $100,000 any one claim and $2,000,000 any one policy year.

Employment practice breaches: $1,000,000 any one policy year.

Policy deductible:
(Excess) inquiry cost $20,000 all other claims $1000.

Independent Contract Work
The policy also gives coverage to employed nurses who perform some part-time independent or contract work subject to their income for the work not exceeding their annual gross salary as an employee. No cover is provided to a nurse who works as an employee for one day a week and then for the rest of the week as an independent contractor. This is not the intention of the cover and in these cases a nurse should purchase individual Professional Indemnity insurance.

Homebirths
All homebirth activities or services are specifically excluded from any coverage.

Claims Reporting Process
Financial members of the Association who are required to give statements, attend interviews, etc, re adverse incidents should contact the Association for assistance. As has been our custom, we will represent members, referring them to qualified lawyers determined by the Association if required. In such instances, the Association will monitor the progress of any matter and refer to insurers if required under the terms of our insurance policy.

Provided that you are a financial member of the Association at the time of any incident giving rise to a claim and/or inquiry and you contact the Association to manage your matter, we will handle the reporting of any claims to our insurers.

Inquiry Costs
Should any nurse be requested to either respond or attend any official inquiry they should contact the New South Wales Nurses and Midwives’ Association immediately for assistance.