Today’s question asks:
With the registration of paramedics and the increasing scope of practice for private paramedics, what is the difference in insurance for someone who is a sole trader or sole company director in the private paramedic sector? For example, there is public liability, professional indemnity, and medical malpractice insurance… What is the difference?
At what stage does a private paramedic operating as a business need malpractice insurance? If a private paramedic contracts out to another paramedic to assist with a job, does their business now need medical malpractice insurance?
Does it make a difference if the contractor were to become a casual employee?
Answering the question ‘what is the difference between ‘public liability, professional indemnity, and medical malpractice insurance’ is not possible as to a large extent it depends on the language used by the insurers so a person considering buying insurance needs to read the product disclosure statement to understand what risk the insurance covers, rather than rely on the title.
A paramedic needs appropriate professional indemnity insurance whenever he or she is practicing their profession as defined by the Paramedicine Board, below.
The Health Practitioner Regulation National Law gives this definition:
“appropriate professional indemnity insurance arrangements”, in relation to a registered health practitioner, means professional indemnity insurance arrangements that comply with an approved registration standard for the health profession in which the practitioner is registered.
Section 129 says:
A registered health practitioner must not practise the health profession in which the practitioner is registered unless appropriate professional indemnity insurance arrangements are in force in relation to the practitioner’s practice of the profession.
The Paramedicine Board’s Professional indemnity insurance arrangements registration standard defines ‘practice’ as
any role, whether remunerated or not, in which an individual uses their skills and knowledge as a health practitioner in their profession. For the purpose of this registration standard, practice is not restricted to the provision of direct clinical care. It also includes using professional knowledge in a direct non-clinical relationship with clients, working in management, administration, education, research, advisory, regulatory or policy development roles, and any other roles that impact on safe, effective delivery of services in the profession.
The standard also says that insurance must cover
… the costs of liability incurred by the insured arising from civil claims seeking compensation for personal injury, harm or loss incurred, where the claim arises directly from an alleged act, error or omission committed in the conduct of the practitioner’s practice or professional business during the policy period. Civil liability cover includes cover for legal expenses incurred in defence or settlement of a civil claim and for damages payable.
I would suggest that ‘professional indemnity’ and ‘medical malpractice’ insurance really mean the same thing save that ‘professional indemnity’ is a more generic term to mean any profession. As a lawyer I have professional indemnity insurance to cover any liability incurred by me in my practice as a lawyer, equally a dentist, a doctor, a paramedic, a nurse etc may all have ‘professional indemnity insurance’. Medical malpractice insurance is (subject to the terms of any specific product disclosure statement) is a specific example of ‘professional indemnity’ insurance for medical practitioners.
Public liability insurance would cover other forms of liability that may not be professional related, eg if you run a first aid training business you need liability insurance to deal with people who slip and fall on the uneven floor of your bathroom, or become ill because of the poor quality food you serve at morning tea etc.
Another relevant insurance if you are a director of a corporation is director’s insurance to cover liability incurred by a director’s failures to properly manage the business.
A paramedic needs to be covered, as a minimum, by ‘appropriate professional indemnity insurance’ which may be provided by their employer or head contractor, or they need to buy their own. Whether other forms of insurance are required depend on the business structure (sole trader, corporation, partnership etc) and the services provided. Anyone thinking of starting a business should be getting advice from an insurance broker.
A business that contracts to provide paramedic services to an event or otherwise operates a private ambulance service would need to have appropriate professional indemnity insurance to cover its vicarious liability for its employees, including casual employees.
It would be a brave business that tried to engage paramedics as subcontractors rather than employees to avoid vicarious liability. A person who alleges negligence by the sub-contractor may still seek to sue the head contractor either for the negligence of its contractors or for its own negligence in how they engaged and managed the contractors and the delivery of services. Even if the head-contractor has a defence, they would want an insurance company to mount that defence, and to bear the cost if it is not successful. In any event, trying to avoid vicarious liability by trying to lable people who are in reality employees as ‘contractors’ has its difficulties – see Hollis v Vabu (2001) 207 CLR 21; The expanding doctrine of vicarious liability (October 12, 2020) and Professional insurance for nurse providing on site first aid (April 2, 2019).
See also Professional insurance for paramedics (May 30, 2018).
The short answers are a private paramedic needs professional indemnity insurance whenever he or she is practicing their profession. A business that offers to provide paramedic service and engages other paramedics, whether as employees or contractors, should also be carrying appropriate professional indemnity and public liability insurance.