Half-price MDU indemnity deal could leave GPs facing long-term costs, DH warns

GPs who move to a cheaper indemnity deal offered by the Medical Defence Union (MDU) from 1 November could be forced to pay thousands of pounds for long-term 'run-off cover', guidance published by the DH suggests.

Guidance published by the DH on Tuesday highlighted the MDU's announcement that it would reduce its indemnity fees by 50% for members joining or renewing from 1 November, following Jeremy Hunt's announcement that the government would develop a state-backed GP indemnity deal.

The guidance points to the MDU's decision to 'change their indemnity offer to GPs to claims-paid coverage' and appears to contradict a statement from the defence organisation that extra costs for GPs during a 'transitional period' would switch to the state scheme once it began.

An MDU statement setting out its indemnity offer last week said: 'Members renewing or joining the MDU from 1 November 2017 will move to transitional benefits, which can provide the indemnity needed until a government-backed scheme is introduced.

'GPs and primary care staff in the scheme can receive assistance and indemnity for claims arising from incidents, which happened during their transitional benefits membership period while they remain an active paying member.

GP indemnity

'The reduced subscriptions are available in the expectation that members remain with the MDU until the government scheme launches at which point their liabilities relating to this transitional period will pass in to the scheme.'

But DH guidance published on Tuesday said: 'Claims-paid coverage is an alternative form of indemnity which requires policy holders to obtain run-off cover at the end of any period of coverage, since it only covers claims which are reported and settled during the period of the cover.

'This means that claims made and settled in the period up to the introduction of a state-backed scheme while the policy remains in force should be honoured. Claims made after the cover has expired, or made before the expiry of the cover but not yet settled, will not be honoured, unless run-off cover is purchased at the end of the period.

'This reduction in coverage will apply to any GP taking up the MDU’s offer of membership at the reduced subscription cost (whether as a renewal or new membership taken out from 1 November 2017) or with any other organisation that offers indemnity for clinical negligence on a claims-paid basis.

'The government does not currently plan to include this run-off cover in a state-backed scheme. GPs with claims-paid or claims-made indemnity policies would therefore be required to purchase such cover separately themselves at the point they move to a state-backed scheme.'

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