The Medical Defence Union (MDU) is calling for the medical indemnity market to be regulated.
The call comes as a bill to require doctors and dentists to have professional negligence insurance as a condition of registration was due to be debated in parliament.
MDU chief executive Dr Michael Saunders said regulation was necessary to prevent doctors risking their finances and to ensure patients did not go uncompensated in the event of an insurer using its discretion not to assist with a negligence claim.
He said: "Regulated medical malpractice insurance has just been made mandatory in Australia and is the norm in most countries, where it is considered the only way to ensure funds are available for patients who suffer harm as a result of clinical negligence."
