Cover as at 1 July 2012
The VPA is pleased to advise that following VPA submissions to the Psychologists Board of Australia, the Board has changed the registration standard regarding Professional Indemnity Insurance, and psychologists may be covered by employer and Union group PI policies.
As a consequence the VPA has taken out a group PI policy from 1 July 2012.
The policy will only apply to members who are employed by an employer, and will not cover any work done in private practice. Cover will be up to $10M for any one incident. A summary of cover can be viewed here.
The policy will include both retroactive cover and run off cover. Any pre-existing matters or claims made which are known by the member must be disclosed by members to the insurer.
The following advice is provided to members regarding whether or not you need to continue to take out your own cover:
For members who have only ever worked as an employed psychologist:
As discussed in these linked documents (PII Guideline & PII Registration Standard), public sector employers PI cover is generally ‘occurrence based’, which provides indemnity for any incident which occurs within the coverage period/period of employment. So the logic of this is that you don’t need run off cover as all incidents that occur during the period of employment will be covered even if notified years later. Likewise the cover is effectively retroactive – i.e. applies for the whole period of time that the psychologist has been employed by that employer.
Private sector employers are likely to have similar policies.
Before the Board changed the Standard, employer policies did not meet the (then) standard as they don’t give cover for breach of ethics, unprofessional conduct etc. Now they don’t have to under the PI Standards. Employer cover should be sufficient to meet claims by clients/patients. But if insufficient the VPA cover will kick in. The VPA policy will have retroactive cover, except for where there are known circumstances which were not disclosed to the broker/insurer.
Run off cover for 7 years after ceasing to practice will be provided by the VPA policy as long as members remain financial members until they cease practice.
The VPA policy will come into play in relation to cover for disciplinary matters as these are not be covered by employer cover, for legal representation for example at the Board if a complaint has been made – e.g. unprofessional conduct, breach of the code of ethics. The Board recommends, but no longer mandates, that psychologists take out PI insurance cover for disciplinary matters.
The VPA cover will also include representation at Coroner’s Court. This is important as the employer may want to shift responsibility to an individual psychologist in some matters.
Summary: For VPA members who have only ever practiced as an employee, and have never been in private practice, there will be no need to renew your individual PI policy after 1 July 2012 as employer cover plus the VPA cover will be sufficient to meet the Board’s standard. You need to remain a financial member of the VPA during your employment to ensure the run-off cover applies once you cease to practice.
Members who have been in private practice Any member who has ever been in private practice may need to continue to buy retroactive cover and run off cover for their private practice, depending on the wording of their current policy. Members in this situation should make inquiries to their insurer.
Members who currently have a private practice are covered by the Professional Indemnity Insurance policy as long as earnings are under $100,000.
Members employed in ‘Private Clinics’ in Public Hospitals We need to make further inquiries in relation to members who are ‘employed’ in private clinics by public hospitals. It is not at all clear whether the psychologist is actually acting in a private capacity when seeing patients who are billed using the psychologist’s medicare number. Any member in this situation should continue to purchase PI cover until advised otherwise.
Any enquiries should be directed to the Union on (03) 9623 9624