INSIGHTS: ‘But how can I notify my insurer? All the details are private’

March 21, 2016

Every health practitioner knows the importance of maintaining the confidentiality of a patient’s personal information. However, every year a health practitioner is asked by its professional indemnity insurer to provide details of any circumstances that may give rise to a claim against them. Undoubtedly the health practitioner is also told by its Association, or its insurance broker, to notify the professional indemnity insurer throughout the course of the year of any circumstances that may give rise to a claim. Those details may include the name of the patient, personal information about that patient’s health and the treatment the patient did or didn’t receive.

A common question we are asked by health practitioners is ‘how can I notify the insurer of details of the patient without breaching my privacy obligations?’

As every good lawyer will tell you – ultimately the answer will depend upon the circumstances of each case. However, as a general proposition, the disclosure of personal information about a patient for the purpose of notifying your insurer about circumstances which you think may give rise to a claim against you is unlikely be in breach of the Australian Privacy Principles (“APP”).

There are at least four reasons why:

  • Health practitioners are obliged to notify patients that they are collecting personal information (APP 5)  and many advise that they may use that information for a secondary purpose, such as risk and claims management. Some practitioners specifically note that a patient’s personal details may be provided to insurers, or insurance brokers for the purpose of arranging insurance. In any event, arguable notification of circumstances that may give rise to a claim is an essential part of risk and claims management. Assuming the patient consents to that secondary purpose, its use may be permitted under APP6(1)(a);
  • If the practitioner did not notify patients that their personal information may be provided to an insurer, or used for risk and claim management, APP6(2)(a) permits the health practitioner to use or disclose personal information for a secondary purpose (such as notification to an insurer) if the patient would reasonably expect the practitioner to use or disclose the information for that secondary purpose. Whether a patient would ‘reasonably expect’  the practitioner to notify its insurer of personal information will be determined objectively – that is, what a reasonable person, properly informed, would expect in the circumstances. One would expect that a patient, who has suffered an adverse outcome, would reasonably expect the practitioner to notify its professional indemnity insurer of those circumstances. After all, the initial letter of demand from the patient’s solicitor almost always requests the details of the practitioner’s insurer, or suggests the letter be presented to the insurer.
  • Section 16A (1) item 4 of the Privacy Act 1988 also specifically permits the use or disclosure of personal information where it is reasonably necessary for the establishment, exercise or defence of a legal or equitable claim. One would imagine that the Privacy Commissioner would view favourably the argument that the provision of personal information to an insurer for the purpose of notifying it of circumstances which may give rise to a claim is a reasonably necessary step in the exercise of the practitioner’s defence of the claim. (To date I have not been able to find any consideration of this section and would be most interested to hear if anyone else has.)
  • Finally, a professional indemnity insurer must also comply with the Privacy Guidelines, and any confidentiality obligations contained within the terms of its policy. Therefore the insurer generally will not use that information for a purpose other than considering the circumstances, claim, or insurance requirements of the practitioner.

Hopefully, the above provides comfort to health practitioners when notifying their professional indemnity insurers of a patients’ personal details as part of the notification of circumstances that may give rise to a claim.

If you have any further questions in relation to this issue, please contact our health law team.