34What are gross indemnity costs?

34 What are gross indemnity costs?

(1) The gross indemnity costs of a medical practitioner for whom a contract of insurance provides professional indemnity cover relating to a premium period are so much of the total of the following for which the practitioner is charged or liable, excluding any amounts described in subsection (2), as is reasonably attributable to the period: (a) the premium for the contract, excluding any risk surcharge; (b) the membership fee (if any); (c) costs payable by the practitioner for retroactive cover or run‑off cover. (2) The following amounts are excluded from gross indemnity costs: (a) GST relating to the contract; (b) stamp duty on the contract; (c) a capital contribution required of the practitioner under rules (however described) of an MDO; (d) payment of an excess or deductible; (e) costs for earlier premium periods; (f) charges imposed by the insurer for late payment of any of the amounts described in subsection (1); (g) late payment penalty. (3) To avoid doubt, a premium for a contract of insurance that primarily covers employees of: (a) the practitioner; or (b) an entity, other than the practitioner, that runs the practitioner’s medical practice; is not included in gross indemnity costs of the practitioner.

Note: Examples of entities include companies and partnerships.