Understanding 'unlimited retroactive cover' and why it's important when changing insurers

Insurance Explained

 

If you are thinking about changing your Medical Malpractice insurance cover, an important consideration is retroactive cover. This is because you may not be aware of potential complaints or claims against you by a client for services delivered in the past. 

In Australia, Medical Malpractice insurance is provided on a 'claims made' basis - which means the policy you currently hold at the time you first become aware of a claim or circumstance that could result in a claim, is the the policy that will respond to the claim. It will not be the policy you held at the time you actually delivered the service in question. 

This means that when you are looking to change policies, you need to check that your new insurer will provide you with the necessary cover and policy benefit that will allow your new policy to respond to a potential claim. The benefit specifically relating to this is called retroactive cover - in particular it is important you seek 'unlimited retroactive cover' when changing insurers. 

Here's a quick guide to how retroactive cover works - and why unlimited retroactive cover (such as offered by Insurance House) is important when it comes to protecting yourself and your practice against an unknown future risk.

 

Retroactive cover explained

Retroactive cover is insurance cover for liabilities arising from Allied Health services you have delivered to your clients in the past.

Medical Malpractice insurance cover is required by legislation and professional bodies for most Allied Health professionals. It's there to protect you, the policy holder, in case of harm experience by your clients - and also to protect your clients themselves should you be unable to settle any upheld-claims they make against you.

However, if you change insurers, any new policy may include a retroactive date - before which any services you provided will not be covered in the event of claims.

As an example, you deliver a service on 15 April. Your Medical Malpractice insurance cover comes up for renewal on 30 April and you decide to change insurers. On 7 May, the client you treated on 15 April makes a complaint or claim for damages against you. When reviewing your new policy schedule you notice that you do not have an unlimited retroactive date. Instead, the insurer has used the inception date of the policy, being 30 April, as the retroactive date. This means that the insurance cover you have in place is unlikely to respond or provider any cover for the claim as the treatment date relating to the claim in question is prior to 30 April.

 

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Unlimited retroactive cover

If, however, your new Medical Malpractice insurance policy includes unlimited retroactive cover and you have no prior knowledge of the incident or complaint, your new insurer will assume responsibility for assisting you with this belated claim - even thought it was not providing insurance cover at the time the incident occurred.

Insurance House policies for Allied Health professionals include unlimited retroactive cover, so you can be assured that we will help with claims based on services you have provided in the past.

We offer a wide range of cost-effective options for your practice, wherever it operates. Find out why thousands of Australian practitioners trust Insurance House when it comes to their insurance needs.

If you ever have questions about any aspect of your professional or personal insurance cover, don't hesitate to call our Customer Service Team on 1300 659 626 or email us at customersupport@ihgroup.com.au

 

Our advice is general in nature. To read the full General Advice Warning click here


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