Professional indemnity insurance is a legal requirement if you wish to practice as a Nurse in Australia.
This is to protect both you and your patients, by ensuring that there are enough funds available to pay compensation to a patient should you make a mistake while they are in your care. Damages awarded in a professional negligence claim could be very high, because the consequences of a mistake can be very severe - potentially causing permanent physical impairment or even death.
Depending on the type of nursing qualification you hold you may be providing basic nursing care under supervision, including the administration of prescribed medications, or have full responsibility for the daily care of your patients. As a Nurse Practitioner you may also make diagnoses and prescribe some types of medication, depending on the state you work in.
Your duties and responsibilities will vary according to which field you specialise in (paediatrics, geriatrics, rural nursing, mental health, midwifery etc) and whether you work in a hospital, in a medical practice or privately.
If you make an error or are negligent in your care of a patient - or if a patient or their family BELIEVES you have been negligent - they may file a lawsuit against you. Claims could include:
If you wish to practice as an Enrolled Nurse, a Registered Nurse or a Nursing Practitioner in Australia you must be registered with the Nursing and Midwifery Board of Australia (NMBA). It is a legal requirement of registration (under the Health Practitioner Regulation National Law) that you have ‘adequate’ professional indemnity insurance in place, and you will need to provide evidence of your cover in order to register. The rules and requirements are set out in the NMBA’s Registration Standard on professional indemnity insurance. The standard requires that you have professional indemnity insurance in place ‘which covers the full scope’ of your practice. It recommends that you consider including civil liability cover, unlimited retroactive cover and run-off cover, and acknowledges that ‘nurses and midwives in different types of practice will require different levels of PII cover, according to their particular level of risk’. This puts the responsibility on you to ensure that your cover is adequate for your circumstances. If you are self-employed as a Nurse or Midwife, run off cover is a legal requirement. If patients are unhappy with the care you have given them they may seek to take legal action against you, even if there is no justification for this. Your professional indemnity insurance will also cover your legal costs if you need to mount a defence against an unfounded claim. This is crucial to protecting your professional reputation.
Your public liability insurance protects you if you accidentally injure someone else or cause damage to their property. However, it won’t cover you against claims that you caused physical or financial harm to a patient as a result of negligence in the course of your work. For this you need professional indemnity insurance.
Professional indemnity insurance covers any damages that are awarded if a claim against you is successful (up to the limit in your policy). It also covers your legal costs if you need to mount a defence against a negligence claim, whether or not that claim is justified.
The NMBA recommends that you consider retroactive and run-off cover to give you additional protection, since medical negligence claims can be made many years after the nursing care was provided.
The cost of your professional indemnity insurance will depend on on a number of factors, such as:
A self-employed Nurse working on contract in a private hospital was working her way through the ward administering prescribed medications when one of the patients went into cardiac arrest. In rushing to attend the emergency the Nurse failed to record the anticoagulation medication she had just administered on a patient’s records, and she did not remember to come back later and complete the entry. Shortly afterwards her shift ended and the new Nurse on duty, finding nothing in the notes, administered a second dose of the medication.
The patient suffered a severe intracranial hemorrhage as a result of the anticoagulant overdose, which caused permanent brain damage. The patient’s family took legal action against the hospital and against the Nurse personally for her negligence in failing to record the initial dose of the medication on the patient’s chart. The claim was upheld and damages of $1,200,000 were awarded to the patient.
In addition to the compensation payment the Nurse incurred $43,000 in legal costs in defending the claim. Both the legal costs and the damages were covered by her professional indemnity insurance and she paid an excess of just $[xx] on the claim.
For the protection of yourself and your patients it is vital (and in many cases legally required) that you have adequate professional indemnity insurance in place if you are working as any type of Nurse in Australia, including:
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