Medical malpractice claims are increasing globally, creating a more complex risk environment for healthcare providers. In response, brokers and insurers must evolve from being policy providers to becoming strategic partners – educators, risk managers, and advocates for clients.
In South Africa, the scale of the problem is significant. A 2023 parliamentary report disclosed that medico-legal claims against the state had exceeded R78 billion – nearly three times higher than a decade earlier. The rate of claims has escalated most notably in high-risk disciplines such as obstetrics, where claims have risen by more than 25% annually.
Annual growth in claims is running at 3% to 4%, while legal defence costs are climbing at 6% to 8%. This trend puts pressure on all parties in the value chain to strengthen their approach to underwriting, claims management, and client education.
“Several forces are converging to create this perfect storm,” says Leandren Naidoo, the manager of business risk solutions at OLEA South Africa. “Greater public awareness of patient rights, aggressive legal marketing, and the adoption of ‘no win, no fee’ legal models have all made it easier to pursue claims.”
Media coverage of high-profile cases has contributed to a dual dynamic – raising accountability while inflating public expectations. Patients are more likely to perceive adverse outcomes as negligence, even when there is no clinical error, which has led to a rise in opportunistic or speculative claims.
In 2024 alone, the Special Investigating Unit flagged more than 2 800 suspicious malpractice cases, many believed to be driven by legal marketing tactics rather than actual harm.
This climate has given rise to defensive medicine, where healthcare professionals order unnecessary procedures, referrals, or tests to mitigate liability exposure – driving up costs without improving patient outcomes.
Malpractice risks and policy structure
Malpractice risks include misdiagnosis, incorrect medication, unnecessary procedures, and medical equipment failures.
Medical malpractice indemnity insurance provides cover for the following: arbitration costs, court judgments and awards made against the insured, expert legal fees and support, court costs, settlement costs, and attorney’s (and mediation) fees.
Naidoo notes that indemnity limits must be calibrated carefully to the risk profile.
“An obstetrician can pay up to R1.7 million annually in premiums. This isn’t just a cost, it’s a risk exposure that needs to be planned for,” he says.
He adds that the emotional and reputational implications of malpractice incidents are often overlooked. “Medical malpractice is more than a legal matter; it’s a profound rupture in the sacred relationship between healthcare providers and patients. At its core, it is about harm – physical, psychological, and often, emotional. But it is also about dignity.
“Neuroscientific studies show that psychological injury registers in the brain in much the same way as physical harm. Yet, while a physical injury may receive swift attention, a bruised sense of dignity can linger and fester indefinitely.”
Naidoo says this emotional dimension can drive litigation: “The perceived violation of dignity can fuel resentment, prolong trauma, and, ultimately, drive patients to seek justice in courtrooms rather than consulting rooms.”
Litigation versus early resolution
Although litigation dominates headlines, Naidoo points out that only a small proportion of cases go to trial. “Despite perceptions of rampant litigation, most malpractice cases never reach court. An estimated 95% of claims are resolved before trial, often on the proverbial courthouse steps.”
Several factors contribute to this: “Overloaded dockets, lengthy trial timelines – often five to seven years – and soaring legal costs,” he says.
“But there’s a deeper problem. Courtrooms aren’t designed to resolve emotional trauma. Patients often seek validation more than victory. They want to be heard, not just compensated.”
This presents an opportunity for insurers and brokers to encourage early engagement and non-litigious resolutions – such as mediation or structured conversations – while ensuring claims-handling processes support client reputational concerns, alongside financial exposure.
What effective risk management looks like
Risk mitigation is not only about having insurance in place. It requires an operational and cultural shift across healthcare organisations.
Key pillars of an effective strategy include:
- Patient safety protocols – surgical checklists, standard operating procedures, and medication audit systems.
- Staff training – regular clinical and legal education to update practitioners on best practices.
- Documentation – accurate, detailed, and contemporaneous medical records that support decisions and reduce liability.
- Communication – encouraging a culture of openness, early apologies, and clear disclosures.
- Insurance alignment – policies must reflect the actual risk exposure, including rising legal fees and inflationary damages.
High-risk specialties and financial impact
Certain specialties are particularly vulnerable to high-value claims:
- Obstetrics – cerebral palsy claims can exceed R48m.
- Neurosurgery – the risks associated with brain and spinal procedures.
- Orthopaedics – post-surgical complications and long-term disability.
- Emergency medicine – errors in time-critical care.
Average claim values range between R300 000 and R12m. Claims involving minors can exceed R40m because of the extended prescription period, which only begins running three years after the child turns 18.
The role of brokers
Naidoo says insurance is not merely a financial product; it’s a strategic partnership.
“A good insurer doesn’t just pay claims; they help prevent them.”
For brokers, product knowledge alone is no longer sufficient. They must help clients to identify their exposures, structure suitable cover, and implement the operational safeguards necessary to prevent avoidable claims.
As the healthcare risk landscape evolves, insurers and intermediaries must act as both risk advisers and reputational stewards, helping practitioners to safeguard not only their finances but also their ability to practise with trust and credibility.
I am just wondering if we have become detached from our patient; We do not answer any post office hours calls, We spent less time with patient, order test before we see patients, etc.etc. and attached now more than ever to the business part of Medicine. It used to be a VOCATION, now a money making episode of our existence, so no wonder