Why it’s time to update private medical indemnity rules and what it means for insurance and claims

The landscape of private medical practice in the UK continues to evolve rapidly. As more clinicians’ balance NHS roles with private work, the long-standing patchwork of indemnity arrangements has come under sharper scrutiny, not just from regulators and healthcare bodies, but also from patients and medical professionals themselves. In a recent article published by Healthcare Today, the ongoing lack of clear regulation around private medical indemnity was brought into sharp focus, raising important questions for clinicians, patients and insurers alike.

At the heart of this debate is the lack of robust regulation around private medical indemnity, particularly in comparison to state-backed schemes that cover NHS practice. For private patients and practitioners alike, this gap isn’t academic as it has real implications for access to compensation, financial security, and the integrity of clinical care.

Two systems, unequal certainty

Under current frameworks, clinicians must have “adequate and appropriate” indemnity before practising privately, a requirement enforced by the General Medical Council (GMC) [1].

In contrast, NHS practice benefits from state-backed indemnity schemes such as the Clinical Negligence Scheme for Trusts (CNST)[2] and, for GPs, the Clinical Negligence Scheme for General Practice (CNSGP)[3]. These schemes offer clarity and security for both clinicians and patients in ways that some private arrangements often do not.

By comparison, many private practitioners rely on discretionary indemnity arrangements provided by medical defence organisations (MDUs). While these organisations have a long history of supporting members, their assistance is not contractual and there is no legal obligation to indemnify in every case. This distinction can create uncertainty for patients seeking compensation, as payment ultimately depends on the discretion of the provider rather than a binding insurance contract.

Contractual insurance arrangements, by contrast, provide enforceable rights and defined limits of cover, offering greater transparency and predictability in the event of a claim.

Discretionary vs contractual cover

One of the most pressing issues is the prevalence of discretionary indemnity. Unlike contractual insurance, discretionary arrangements do not legally guarantee cover for claims made against a practitioner — instead, they rely on a provider’s decision to assist on a case-by-case basis.

While MDOs offer valuable medico-legal support, their discretionary model is not subject to the same financial conduct regulation as insurer-backed policies. This leaves private practice clinicians — and, critically, their patients — exposed if a disaster claim falls outside an indemnifier’s criteria or financial appetite.

This regulatory shortfall presents a three-fold risk:

• For clinicians: Potential personal liability if discretionary providers decline to cover a claim.
• For patients: Reduced access to meaningful compensation for harm suffered in private care.
• For the market: A lack of transparency and confidence in indemnity products, making it harder for consultants to plan sustainable careers.

What the sector is calling for

In response, policymakers and professional bodies have increasingly advocated for reform. The regulation of indemnity products and introducing safety nets, like those in other insurance markets, to ensure patients are not disadvantaged has been made a recommendation to be updated.

Discussions in Parliament and stakeholder consultations have also moved toward greater transparency and oversight — for example, the introduction of a Code of Practice for discretionary indemnity providers to clarify how decisions are made about claims.

But as many in the sector acknowledge, transparency is only a first step. Structural reform is needed to bring private medical indemnity in line with modern clinical risk and patient rights.

A broker’s perspective: insight from the front line

As an experienced medical indemnity broker, Howden has a clear view on what reform should aim to achieve. Simon Gale, Divisional Director at Howden Health & Care, comments:

“In today’s increasingly complex private practice environment, clinicians need indemnity arrangements they can rely on. Clarity, certainty and contractual commitment are not luxuries, they’re essential.

Regularly reviewing your policy isn’t just about compliance; it’s about ensuring your cover evolves with your practice and supports both your career and your patients’ needs.”

These insights reflect a broader truth that clinicians are best served by indemnity solutions that are future-proofed, transparent and aligned with the realities of clinical risk.

What this means for insurance and claims

Updating private medical indemnity rules would have important implications:

• Greater uniformity: Patients and practitioners would benefit from a baseline of security and predictable outcomes in claims.
• Market confidence: Clear regulation would encourage innovation and competition among indemnity providers.
• Risk clarity: Consultants would have better tools to understand and manage indemnity costs as part of career planning.

From an insurance perspective, moving towards contractual indemnity models regulated by bodies such as the Financial Conduct Authority (FCA) would align private medical cover with established practices in other professional indemnity markets, which in turn, enhances trust and financial resilience.

How Howden is helping consultants navigate private practice

At Howden, we recognise that career progression into private practice brings both opportunity and complexity. Howden’s private practice pathways are designed to support consultants at every stage, from initial planning through policy selection and ongoing risk management.

We help clinicians:

• Understand indemnity requirements specific to their practice and specialty.
• Compare and choose indemnity solutions — whether contractual insurance or tailored combinations with discretionary support.
• Plan long-term careers with indemnity strategies that adapt as their roles and risks evolve.
• Guide them through the various other elements required to build and grow their private practice such as patient billing, financial planning/modelling, and pharmaceutical services.

With expert guidance from brokers who speak clinicians’ language and understand insurance intricacies, consultants can make confident decisions that balance professional growth with protection and peace of mind. Click here to find out more.

If you’d like to discuss the contents of this article in more detail, please contact Simon Gale.