Understanding indemnity and insurance terms

We know the topic of insurance is extremely complex and difficult to understand. Here we explain why it is important to understand the basics, what certain terms mean and how they interact.

Why do I need to understand my CSP PLI scheme?

The CSP PLI scheme provides you essential insurance in order to practise. It doesn't cover everything. Like all insurance policies it is up to you to read the terms and conditions and understand them. We help you to do this by providing these webpages, FAQS and summary documents. It is your responsibility to ensure your insurance needs are covered, particularly if you start to run a business, work with in high risk settings or work overseas.

Many of the terms used in insurance have specific meaning but are often misused and misunderstood. Understanding what terms mean and the extent of the cover you have through the CSP scheme mean you are in a more informed position from which to seek further advice if necessary, and ensure that all your practice risks are properly insured should you ever need it.

What is 'indemnity'?

Indemnity means 'securing against loss'. It is the arrangements you must have in place to ensure a patient will be financially compensated should they be harmed by you either by your proven clinical negligence or by a non-treatment related public liability events such as slip, trip or fall in your clinic.

One way to provide this cover is to have an insurance policy in place that covers risks that can arise from treating patients. The CSP offers an indemnity scheme for eligible CSP members which covers both clinical negligence and public liability risks, subject to the terms of the policy.

What is 'insurance'?

A legal contract between two, or more, parties that is one way of providing indemnity for losses. 'Risk pooling' and 'discretionary covers' are other ways of providing indemnity for losses.

Is physiotherapy a risky profession?

No. Compared with other professions, overall the physiotherapy profession has a good risk profile. This is reflected in the fact that physiotherapists benefit from lower indemnity premiums than, say, doctors. However, any patient who believes they have not received a 'reasonable standard of care' may seek to bring a claim for clinical negligence.

All individual physiotherapists, including students, who have contact with patients can therefore be at risk of a claim against them. Some areas of practice, such as working with animals or certain professional footballers, are linked to a higher risk exposure to claims and so are not covered by the main CSP PLI scheme.

What are the main drivers for a claim?

An individual patient's underlying exposure to sustaining an injury, and the consequences of the management of that injury by a physiotherapist, are the main drivers and indicators of where a claim against the PLI scheme may materialise from.

What about the 'net worth' of an individual – does that matter?

The 'net worth' of an individual patient in itself does not drive the risk of that person sustaining an injury, but will be a subsequent consideration where 'loss of actual and/or future earnings' form part of a negligence claim.

Does the complexity of what a physiotherapist does make any difference?

No. A claim is most likely to arise from a 'failure to diagnose' or a 'failure to refer on' on the part of the physiotherapist. With the increasing autonomy of the profession, and the growing number of contexts where a physiotherapist has the first and/or only contact with a patient, there is a growing risk of a physiotherapist failing to either make an appropriate diagnosis, or failing to identify in a timely manner that a medical referral is required. The complexity of the intervention delivered by a physiotherapist does not alone indicate the likelihood of a claim.

Glossary of commonly used terms

Insurance BrokerAn intermediary who negotiates a policy of insurance between the policy holder ('insured') and the underwriters ('insurers')
ClaimTo demand or assert as a right. Facts that combine to give rise to a legally enforceable right. To make a demand for compensation due to harm caused
ClaimantThe person(s) making a claim
CNSTClinical Negligence Scheme for Trusts (England only). The risk pooling scheme operated by the National Health Service (NHS) whereby all organisations eligible to join the pool, pay a sum of money that is used to pay for clinical negligence claims against any of the member organisations. There are similar schemes in Scotland (Clinical Negligence and Other Risks Insurance Scheme (CNORIS)), Wales (Welsh Risk Pool Service (WRPS)) and Northern Ireland (Clinical Negligence Central Fund (CNCF)) for their National Health Services
Concurrent InsuranceTwo or more insurance policies running at the same time and insuring the same risks
CostsThe fees involved in bringing a litigation claim. Costs include fees for the lawyers, expert witnesses if used, charges, disbursements, expenses and damages awarded
DamagesThe financial compensation paid to a claimant to reimburse them for losses and/or injuries sustained as a result of a proven legal wrong-doing eg clinical negligence. The type of damages awarded in clinical negligence claims are classified into 'general' and 'special' damages.
DefenceThe defendants opposing view, or denying the truth, of the claimant's case
DefendantThe person(s) against whom a claim is made
Discretionary coverIndemnity offered to an individual, within given limits and principles, but provided entirely based on the decisions and judgments of the cover provider
IndemnityThis means 'securing against loss’ and refers to arrangements that are put in place to provide compensation for any losses incurred
Insurance policyA legal contract between two parties to provide indemnity against specified risks materialising. The 'insurer’ takes on liability for the risks after a 'premium’ has been paid by the 'insured’, so that any claims made will be covered by the policy, subject to its terms and conditions and only up to the financial limits insured
InsurersThe underwriters to an insurance policy
LiabilitiesLegal obligations and duties
LitigationAn action brought in court to enforce a particular legal right.
Medical malpracticeImproper, unskilled, or negligent treatment of a patient by a doctor, dentist, nurse, pharmacist, or other registered health care professional in the course of their work
Professional indemnityIn this context means the arrangements in place to cover civil liabilities from claims arising from medical malpractice and professional risk
Public liabilityIn this context it means the arrangements in place to cover civil liabilities from claims arising from your work that are not associated with personal injury to your patient
Retroactive CoverThis is the term used to describe cover provided for your previous work when you take out an alternative insurance policy to cover work that is no longer covered under a previous insurance
RiskPotential dangers that, if they occurred, could harm a person, object or event.
Risk poolingOne method of risk management used in insurance, in this context most commonly used by NHS organisations. All organisations eligible to join the pool, pay a sum of money that is used to pay for clinical negligence claims against any of the member organisations within the pool
Run-off coverThis is the term used to describe the ongoing cover for your previous work. Run-off cover is necessary when you retire or stop doing the type of work in question or the existing insurance policy is cancelled or the terms of the existing policy remove cover for certain activities. There must always be some form of ongoing insurance to deal with claims that arise from previous work
Top-up insuranceA second, linked, insurance policy that kicks in once the limits of the primary underpinning insurance policy have been reached
Insurance underwriterThe 'insurer' which assumes the liability for the risks insured according to the policy terms and conditions, up to the financial limits specified. Underwriters evaluate the risk and exposures of their clients. Underwriting involves measuring risk exposure and determining the premium that needs to be charged to insure that risk.
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