Attention doctors! You need insurance to cover medical errors

Consider the case of a Gujarat-based doctor whose patient, after a successful emergency caesarean section, experienced severe complications due to a nurse's oversight—a towel left inside her abdomen. This medical negligence led to a demand for ₹30 lakh in compensation. Fortunately, the doctor had professional indemnity (PI) insurance, which provided crucial financial support during the legal dispute.

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"The doctor was our client. Our legal team helped the doctor prepare all the necessary legal documents required to be submitted to the insurance company for the settlement of the claim. The doctor chose to engage his own lawyer to negotiate the claimed amount, successfully reducing it from ₹30 lakh to ₹15 lakh," says Deepankar Mahajan, chief executive, CoverYou, a Gurgaon-based insure-tech firm.

The importance of professional indemnity insurance

In severe cases, claims can reach exorbitant amounts.

For instance, the Supreme Court awarded ₹5.96 crore, the highest ever, in compensation for Anuradha Saha, a US-based psychologist who died due to medical negligence during her visit to India. With interest, the total compensation reached ₹11 crore.

While large hospitals often mandate PI insurance for their practitioners, independent doctors might overlook its importance. Even those who purchase it may not fully grasp the policy's features.

PI insurance covers financial costs for hospitals, doctors, nurses, or other medical practitioners sued for bodily injury or death caused by error, omission, or negligence. "In many jurisdictions PI Insurance is mandatory for doctors to procure and maintain their medical licence. Not only financial protection, but this insurance also provides them peace of mind, boosting their confidence to have safer practice," says Mahajan of CoverYou.

Features and considerations

The sum insured, or limit of indemnity, is available once per policy year and depends on factors such as specialization, experience, and patient profile. Premiums are paid annually, and policies include a 'compulsory excess' clause, requiring the policyholder to bear a fixed amount before the insurer covers the remaining claim. For example, if a claim is ₹5 lakh and the compulsory excess is ₹20,000, the insurer pays ₹4.8 lakh.

Some policyholders opt for 'voluntary excess' to reduce premiums, agreeing to cover part of the claim before the insurance activates.

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Prominent insurers offering PI insurance include ICICI Lombard, Reliance General Insurance, Bajaj Allianz General Insurance, Future Generali India Insurance, and United India Insurance. Additionally, insurtech platforms like SecureNow, CoverYou, and Policybazaar facilitate the purchase of these policies.

"A medical practitioner should consider three things before buying a PI plan: benefits offered in the plan, the lawyer panel of the service provider, and claims settlement ability of the service provider. A doctor’s professional indemnity is a specialized plan, and should be bought from a specialized consultant with deep domain experience," says Abhishek Bondia, principal officer and managing director at SecureNow.in.

While SecureNow and Policybazaar are comprehensive insurance broking firms, CoverYou focuses on medical professionals.

"Our medico-legal team can help out doctors with legal requirements but they are free to choose their own lawyer. We also provide a wide network of senior doctors who can advise medical practitioners for what should be done. Such advice coming from a doctor boosts their confidence," notes Mahajan.

Filing a claim

When a complaint is filed, the insured should immediately lodge a claim with the insurance company. Required documents include the claim form, policy document, legal notice, lawyer replies, medical registration certificate, and all patient-related documents.

“Medico-legal cases tend to be complex, involving the health and life of the patients. Often, doctors are accused of poor outcomes, which are completely beyond their control. It is important to work with medico-legal experts, who have prior experience in responding to such cases," says Bondia. “Two specific aspects stand out. First, substantial loss mitigation can happen through pre-litigation intervention. Second, out-of-court settlement can help minimize protracted legal battle and linked reputational damage for the doctor. Both the aspects should be covered in the policy to ensure a smooth claims settlement experience."

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In a recent case, Bondia's team handled an allegation of negligence against a radiologist for failing to detect congenital defects during pregnancy scans. "While the fault could not be clearly established, we helped settle the case out-of-court on humanitarian grounds. Against a claim of around ₹50 lakh, it was finally settled for ₹20 lakh," he says.

Professional indemnity insurance, thus, is indispensable for medical practitioners, offering vital protection and peace of mind in a high-risk profession.

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