What Insurance Does My Practice Need?

 

At a suburban surgical suite in Australia, a patient was referred to a general surgeon for what appeared to be a benign lesion. The referral included pathology results and photographs. However, an amended pathology report was received only a day later.

The practice entity had not updated its systems or communicated the new report promptly. A claim of misdiagnosis followed, and the entity (the clinic) was sued alongside the individual surgeon.

This case underlines a critical point: even if every individual practitioner has their own professional indemnity cover, the practice entity itself can still face legal exposure.

In other words, for your medical practice, the question isn’t if you might be sued, but who may be sued (the individual, the entity, or both). It also begs the question of whether your insurance strategy covers all of those?

With that in mind, let’s deep-dive into the key insurances your practice should hold.
 

The Insurance Must-Haves

Running a medical practice involves more than delivering excellent patient care: it also means protecting the business, its people and its assets from the unexpected. In today’s litigious and highly regulated environment, appropriate insurance cover is no longer optional. In 2025, Australia can be a litigious minefield for medical practices.

In this article we’ll walk through the core types of insurance your medical practice should consider, using Australian-specific examples and contexts. With the right approach, you can build a risk-management foundation that covers you, your staff and your practice entity.

1. Mandatory and Baseline Cover: Workers’ Compensation and Public Liability

 

Workers’ Compensation

In Australia, if your practice has employees, you must legally hold workers’ compensation cover. It protects staff if they are injured or become ill as a result of performing their job.

Example: A practice nurse slips on a wet floor in the clinic, injures their back and needs rehabilitation. Workers’ compensation ensures medical expenses and loss of income are covered.
 

Public Liability

For practices with a public-facing site (patients, visitors, contractors) you also need to be covered for third-party injury or property damage. Public liability insurance provides coverage for healthcare providers against third-party injury or property damage claims.
Example: A patient trips in your waiting room and breaks their wrist, then sues the practice for negligence in maintaining safe premises.

 

2. Professional Indemnity / Medical Malpractice Insurance

Individual Practitioner Cover vs Practice Entity Cover

One of the most important protections: professional indemnity or medical malpractice insurance. For a practice, this means covering claims of negligence, breach of duty, informed-consent failures, misdiagnosis and more. Matters such as misdiagnosis, medication errors, informed consent issues as examples of claims.
A key point: Many insurers emphasise that individual practitioner policies may not automatically protect the entity (the clinic or corporate practice), or cover vicarious liability for staff or contractors.

Why you might need entity cover

It is now increasingly likely that actions are made against the Legal Entities themselves, including its staff as well as the individual healthcare professional.

Example: Your clinic engages a locum general practitioner who makes a diagnostic error. The patient sues the clinic entity as well as the locum. The clinic thus needs its own policy to cover vicarious liability.

Example types of cover:

Medical Practice Indemnity Insurance, which provides coverage for claims arising from medical malpractice, negligence or breach of professional duty.
 

Key takeaway:

When evaluating your policy, check

(a) whether it covers your entity (clinic, corporate practice) in addition to the individual doctors;

(b) whether staff, contractors, allied health and other sub-entities are included;

(c) whether vicarious liability is covered;

(d) whether there are any exclusions for certain procedures or services (e.g., cosmetic, high-risk, sedation).
 

3. Business or Practice Property and Contents Insurance

While malpractice and liability cover the “services” side of risk, you also must insure your physical assets and exposure to property events. According to one broker:

Every business should take out business aka office insurance to protect you and your building from various risks relating to fire, theft, water and property damage.
Examples of what to cover:

• The building fit-out (if owned or as tenant might need tenant improvements cover)
•  Medical equipment, machinery breakdown (e.g., autoclaves, imaging devices)
• Refrigerated medicines/ vaccines spoilage
• Contents and fixtures (waiting room furniture, IT hardware)
• Loss of income due to business interruption (e.g., fire, flood, major water damage)

Example: A flood damages your practice’s basement area containing file archives and servers. Repairs & replacement cost; you also lose several days of patient flow. Having business interruption cover mitigates this.

4. Cyber / Data Breach Insurance

Digital risk is one of the biggest modern risks to practices, as they hold highly sensitive patient information, billing systems, e­health records. Cyber insurance is the perfect way to keep your business covered. This covers the fall out stemming from data loss, recovery and crisis management.

Example: A ransomware attack locks your clinic’s electronic patient records and demands payment; you incur incident response costs, notifications, system rebuilds, reputational damage. Cyber cover can help.

Tip: Check whether your Cyber Policy covers business interruption and Crime/Social Engineering
 

6. Tailored / Specialist Covers You Might Need

Based on your services, location or structure, you may need extra tailored coverage. Some examples include:

• Products Liability: If your practice sells or supplies medical devices, supplements or consumables, you may need cover for a device that causes harm.
• Environmental Liability: Practices dealing with regulated waste, hazardous materials could face contamination claims.
• Business Interruption or Loss of Income: Especially relevant where heavy equipment or specialist clinics rely on continuity.
• Run-off Cover: If you sell your practice, cease operations, or move into retirement, you may still be exposed for acts done while you were operating. TRun-off insurance provides coverage for a specified period of time after the sale. This aims to protect both the previous owners and the new owners from any potential claims.
• Journey / Corporate Travel Insurance: If staff travel internationally or interstate for conferences, missions or support services. (Mentioned via Mediprotect service list)

How to Choose the Right Insurance Policy for Your Practice

 

Given the variety of risks and suppliers, here are some practical steps to get the cover right:

• Map your risks: What services do you deliver? Do you run surgery rooms, imaging, allied health, aesthetic procedures? What assets and staff do you have?
• Review entity structure: Are you a sole practitioner? Partnership? Corporate entity? Do you subcontract? Do you employ allied health? This affects your exposure and cover needs so always remember entity cover is distinct from individual cover.
• Understand policy scope & exclusions: Ensure vicarious liability is included, staff are covered, the entity itself is protected, and what services/exclusions apply.
• Look beyond price: Sometimes the cheapest policy might not offer adequate coverage. Consider insurer reputation, claims handling, and how the policy aligns with your risk profile.
• Work with an insurance broker: Especially one with healthcare / medical practice experience. Have a discussion with a broker who understands your business.
• Review annually: As your practice grows, adds services or changes structure, your risk profile may shift. Update policies accordingly.
• Document everything: Keep records of policy documents, staff contracts, sub-contractor agreements, incident/near-miss logs. In a claim situation you’ll need strong documentation.