Medical Indemnity in the UK – Why Contractual Cover Gives You Certainty Over Discretionary Protection
If you’re a doctor, dentist, or regulated healthcare professional in the UK, the General Medical Council (GMC), General Dental Council (GDC), or your equivalent regulator require you to have appropriate indemnity in place.
August 21, 2025
If you’re a doctor, dentist, or regulated healthcare professional in the UK, the General Medical Council (GMC), General Dental Council (GDC), or your equivalent regulator require you to have appropriate indemnity in place.
Most professionals understand this to mean “you must be covered for claims”. But what many do not realise is that the way you are covered makes a huge difference when something goes wrong.
In the UK, there are two main types of medical indemnity arrangements:
- Discretionary Cover – typically offered by Medical Defence Organisations (MDOs) such as the MDU, MDDUS, or MPS.
- Contractual Medical Malpractice Insurance – underwritten by FCA and PRA regulated insurers, including those operating in the Lloyd’s of London market.
While both aim to protect you if a patient claims negligence, the legal structure, regulatory oversight, and enforceability are completely different — and can mean the difference between full legal defence and being left to handle a claim on your own.
Why Understanding This Difference Matters
Claims and regulatory investigations can be career-defining events. A negligence claim, GMC referral, or coroner’s inquest can result in:
- Significant legal costs (often tens or hundreds of thousands of pounds).
- Damage to your reputation and ability to practise.
- Emotional strain and loss of earnings.
Your indemnity provider’s willingness and legal obligation to step in is therefore critical. With contractual insurance, you can rely on a binding promise. With discretionary cover, you’re relying only on goodwill.
Side-by-Side Comparison – UK Perspective
| Feature | Discretionary Cover (MDO) | Contractual Medical Malpractice Insurance |
|---|---|---|
| Legal Status | Not an insurance contract -- membership-based service. | Legally binding insurance contract under UK law. |
| Regulatory Oversight | Not regulated by the FCA or PRA. | Authorised and regulated by the FCA and PRA. |
| Obligation to Assist | No obligation -- assistance is at the organisation's discretion. | Binding obligation -- if within policy terms, insurer must assist. |
| Ability to Enforce Support | Cannot be enforced in court if cover is declined. | Enforceable under the Insurance Act 2015 and UK contract law. |
| Capital & Solvency Requirements | No statutory capital reserve requirements. | Must meet strict solvency requirements set by the PRA. |
| Policy Wording | Often not provided in detail; scope is interpretive. | Clear, written terms and conditions. |
| Scope for Tailoring | Limited to set membership categories. | Fully customisable to your scope of work, practice type, and additional risks (e.g., telemedicine). |
| Run-Off Cover | May not offer guaranteed run-off for retirement. | Often includes 21-25 years run-off cover as standard. |
| Vicarious Liability | May exclude or limit cover for employed/contracted staff. | Can include full vicarious liability protection. |
| International Cover | Often limited or excluded. | Can include worldwide cover (UK jurisdiction) if required. |
How Each Works in Practice
Imagine a private consultant surgeon in the UK facing a negligence claim for a procedure they consider well within their normal scope of practice.
Under discretionary cover, the medical defence organisation reviews the case but decides the claim falls outside its interpretation of “normal scope.” As a result, the surgeon receives no assistance and must personally fund both their legal defence and any settlement. Crucially, there is no legal mechanism to challenge or compel the MDO to step in.
By contrast, with contractual insurance, the insurer refers back to the policy wording and schedule. If the procedure is listed within the scope of practice insured, the company is legally bound under UK law to provide defence and indemnity. Any failure to do so constitutes a breach of contract, enforceable in court.
Why More UK Healthcare Professionals Are Moving to Contractual Cover
The shift toward contractual insurance reflects several key advantages. First, it offers certainty: if your claim falls within the policy terms, you will be defended—there is no risk of a discretionary refusal. Second, it provides regulatory assurance, since insurers are overseen by the FCA and PRA to ensure both financial strength and fair treatment. Third, cover can be tailored to the specific risks of a practice, whether cosmetic surgery, telemedicine, or more complex procedures. Contractual policies also extend protection into the future, with run-off cover available for retirement or career breaks, and they can incorporate broader risks such as cyber incidents, data breaches, vicarious liability, and international work under UK jurisdiction.
Medicas – UK Healthcare Liability Specialists
At Medicas, we specialise exclusively in healthcare liability. Our leadership includes practising medical expertise, giving us genuine clinical insight into patient care realities. We leverage the breadth of the Lloyd’s of London market to access multiple syndicates, ensuring competitive and comprehensive protection. And because we focus solely on healthcare, our commitment is dedicated, specialist, and uncompromised by competing industry interests.
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