Professional Indemnity Insurance for Doctors

The definition of “indemnity” is “security or protection against a loss or other financial burden”. In today’s scenario, when professionals such as doctors deal with informed individuals, any wrong move or negligence on their part could be met with legal actions. With an increase in such litigations, doctors, other medical staff or hospitals end up compensating the suffered individual or his relatives financially. It’s in the interest of professionals like doctors, that professional indemnity insurance was introduced in 1991.

Indemnity Insurance for doctors

If an individual practising medicine is insured under the professional indemnity insurance policy, it will cover him against any professional risks like negligent misdiagnosis, wrong medicine dosage, surgical errors, wrong course of treatment, etc. If the doctor is legally bound to compensate the patient party financially, the insurance agency settles accounts with the patient on his behalf. The policy may also pay off the legal costs and expenses incurred by the insured.

Terms and conditions

• The insured doctor will have to provide the insurance company with a written intimation as soon as possible about any claim made against him or of any incident that may give rise to such claims against the insured. The claim has to be covered under the specified policy. The insured should immediately provide the insurer with all additional details, including every claim, writ, summons, related documents, etc.
• In case of a non-renewal or cancellation of professional indemnity insurance for doctors, initiated either by the insurer or the insured, the company offers a 90-day buffer from the date of expiry of the policy. The insured may notify the company of any claim within this period, provided the accident has taken place during the policy period and no claim has been entertained during the same.
• The insured should notify the insurance company of any change, in fact, event or circumstances, which, in turn, may change the information offered by the insured at the time of the inception of the policy.
• Mandatory written consent of the insurer is required for the insured to enjoy any admission, offer, promise, or payment.
• The insurer has the right to conduct the defence of any claim on the insured’s behalf. It, however, is not obliged to take over the same. The company can use its discretion in dealing with the proceedings, settlement of any claims, etc. Any amount paid out by the insurer in settlement of the claim shall bring down the indemnity limit of the insured, even when the insured pays an extra premium.
• If the individual is insured under any other insurance that covers the same liability, the concerned company shall pay only the ratable amount.
• The policy may be cancelled either by the insured or the insurer by providing a 30-day notice in writing.

The exclusions

• Any criminal act, fines, penalties, and exemplary damages
• Intentional dereliction acts committed on purpose, intentional neglect, etc
• Medical services provided while under the influence of alcohol or narcotics
• Conditions resulting from general anaesthesia unless it is carried out in a Hospital
• Medical services offered for weight reduction, cosmetic/plastic surgery, hair transplants, genetic damages caused by treatment involving X-ray or radioactive substances, treatment of AIDS, etc.
• Losses incurred as a result of contractual liability or fraudulent claims
• Situations involving loss of goodwill, loss of market, etc.
• Violation of patent, plans, trade secret, trade name, registered design, trademark, etc
• Losses due to financial ruin or bankruptcy
• Any dishonest, fraudulent, criminal, or malicious act or omission.
• Loss due to time used up in conducting an inquiry into the cause of damage and claims against losses sustained
• Losses owing to earthquake, volcanic eruption, flood, storm, or other natural disasters
• Losses due to unethical claims or contractual liabilities
• Losses incurred due to alleged unfair competition.

Assessment and settlement of claims

According to the IRDAI, claim assessment is based on “the legal liability, as admitted by the Insured with the prior written consent of the Company or in terms of an order of a court of the competent jurisdiction, which is binding on the Insured on the happening of the events specified in the Scope of Cover.”

The process of claim settlement is:

1. Immediate written notification should be given to the insurance company about any claim made against him or any event that may give rise to such claims.
2. The insured should provide the insurer with all additional details and related documents.
3. Once the claim is scrutinized and assessed, the claim amount will be settled and informed within 30 days post document submission.

Conclusion

Even when doctors are insured under professional indemnity policy, any medical practitioner must remember that the security is only financial. In case of medical negligence, their reputation and goodwill are still at stake.