We recently sat down with Perth based Sandy Dusting from Doctors’ Choice Medical Indemnity Advisers to get some further insight into why medical indemnity is such an important investment for a sustainable and successful career and some common pitfalls that you should be made aware of.

“We frequently find our new clients are not covered for all of their work. We’ve even had new clients who were not covered for any of their work due to a policy technicality unknown to them which applied to their circumstances!”, Sandy said.

There are many reasons why doctors have gaps in their medical indemnity cover. Generally speaking, at the heart of the issue is the simple reality that, given the demands of a full and busy medical practice and life, most doctors do not give much thought to their medical indemnity insurance (other than to make sure their current policy is renewed annually).

This can easily mean that changes in a doctor’s circumstances may not be communicated to their insurer, resulting in a discrepancy between the doctors’ actual risk and the coverage provided by their current policy. When doctors have been with the one insurer for many years, the risk of not being covered for some of their practice is exacerbated.

With insurance, “the devil is in the detail” and seemingly small, incidental changes in circumstances from a doctor’s perspective, can have a significant impact on whether the doctor has adequate medical indemnity insurance cover. For example, not every medical indemnity policy automatically covers all forms of volunteering.

A frequent issue is regarding the billings of doctors in private practice. All medical indemnity insurers require private practice doctors to notify their gross billings. While different insurers use slightly different terminology, the fundamental concept of gross billings is the same being: the total of all billings generated by a doctor from all areas of practice for which the doctor requires indemnity for a policy year (in their name or for which they are personally liable), whether the funds are retained by them or not, and before any apportionment or deduction of expenses and/or tax.

Gross billings are one of the factors in determining the premium which will be payable by a doctor. It is important to understand that gross billings are used by insurers as a measure of the risk which needs to be covered under a medical indemnity policy (i.e. the number of patients seen and the volume of healthcare services provided); gross billings are not simply used as a reflection of income and thus affordability of expensive premiums. Therefore, gross billings do not include doctors’ income from other non-healthcare related sources.

Notifying incorrect gross billings can affect the cover under a doctor’s medical indemnity policy. Further, most insurers have the right to conduct an audit of their insured’s gross billings. So, it is important to take care in calculating gross billings.

Some common pitfalls are:

Only including amounts which will be received

Gross billings are not the gross income, salary or drawings a doctor receives or retains; the full amounts billed to patients should be used. Declaring only the income received does not provide insurers with an accurate view of the healthcare provided and thus the risks that need to be covered.

Not including income from “other” healthcare services

Insurers’ definitions of gross billings specifically also include income from other parts of a doctor’s medical practice. For example, income from writing articles and professional fees must also be included when calculating gross billings.

Actual billings differ from estimated billings

Changes of circumstances can result in a doctor having higher actual gross billings than the estimate they notified to insurers. This is very common with doctors who have recently commenced private practice. It is very easy for a busy doctor to overlook their obligation to notify their insurer of the higher billings.

Good news

On the flip side, there’s also the possibility that you’re over insured due to circumstantial changes, which were not communicated to the insurer, resulting in overpayments and therefore you can obtain refunds. This can particularly arise when a doctor works in both private and public/indemnified practice and inadvertently includes the billings from their otherwise indemnified practice in the calculation of their gross billings for their medical indemnity policy.”

In summary, you can see that even if you’re happy with your current insurer, there is value in appointing experts to give your medical indemnity a health check. 


Sandy Dusting is a founding director, together with Robyn Landau, of Doctors’ Choice Medical Indemnity Advisers. Sandy and Robyn have over 40 years of combined experience in the medical indemnity industry. Ultimately, the more specialist knowledge and skills one acquires, the more valuable the advice and service become. Credabl is a specialist lender to the medical, dental and veterinary professions. We work with other specialist providers daily to help our clients fulfil their practice dreams. Contact Credabl today to see how we can assist you with your financial needs.

Visit www.drschoice.com.au to get to know them better and to get them to perform a free, no-obligation health check of your medical indemnity.

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This article is a guide only. It does not constitute any recommendation on behalf of Credabl Pty Limited ACN 615 968 100, Australian Credit Licence 499547 or any of its related bodies corporate (Credabl). Whilst the information contained in this document has been prepared with all reasonable care and after due inquiry, it is general information only and is not intended to provide you with financial, tax or legal advice (Information). You should obtain independent financial, tax and legal advice as appropriate. No representation or warranty (express or implied) is provided as to the accuracy, reliability, reasonableness or completeness of the Information. The recipient must make its own independent assessment of the Information after making further inquiries.
This article was prepared in conjunction with Doctors’ Choice Medical Indemnity Advisers Pty Ltd,  (ABN: 27 607 529 948, Australian Financial Services License No: 483781) Perth-based specialists providing medical indemnity advice to Australian doctors and medical practices.