It is a fact that we religiously pay annual premiums for our car but do not think enough about protecting our professional work through which we earn our bread & butter. With the exponential rise in consumer cases against doctors, acquiring a professional indemnity policy for ourselves and an Errors & Omissions policy for our clinical establishment is becoming more mandatory than merely advisable. Practising medicine without an indemnity policy is akin to navigating a boat in the ocean without a life jacket. In this blog, we have compiled a few essential points that you should consider when obtaining a indemnity policy:

01. Policy through an intermediary

It's better to take policy through some intermediary or broker rather than obtaining it directly from the company. This not only helps in obtaining the policy at lower premiums but also provides you with better  legal assistance in the case of a claim.

02. Retroactive date

Always check the retroactive date in your policy. Claims arising before the retroactive date are bluntly denied by insurance companies. This is crucial when transferring your policy from one insurer to another. Always ensure that the new insurer includes the older retroactive date in your policy documents. Your policy period commences from this retroactive date. For indemnity policies, the policy needs to be ‘alive’ i.e. active at the time of the claim by the complainant (irrespective of the time of occurrence of the event).

03. Track record and services of the brokerage company

It is wise to investigate the claim settlement ratios (number of claims settled versus number of claims raised) and online reviews of the broker company before making your selection.

04. Separate Errors & Omissions policy for your clinical establishment

If you are a doctor and own a clinical establishment, it is advisable to have a professional indemnity policy for yourself and an Errors & Omissions policy for your clinical establishment. Almost always, complainants name both the treating doctor and the hospital as accused parties, and consumer forums typically divide compensation payable among treating doctors and hospitals. If your hospital is not covered by an Errors & Omissions policy, the insurer will not cover the hospital's share of the compensation. The premium charges for these policies are reasonable enough when compared with mediclaim policies.

05. Continuity

Always ensure there is no interruption in the continuity of your insurance policy, as a break in continuity means that your insurance coverage will commence from a new date, and you might not be covered for claims arising out of the previously covered period.

06. AOY:AOA ratio

Experts recommend having a policy with an AOY:AOA ratio of 1:1 as the best option. Avoid taking indemnity policy with 1:2 or 1:4 ratio which may be a little cheaper but provide less sum assured.

07. Out of court settlement

This option should be there in your indemnity policy and there should be no capping on it.

08. Breach of confidentiality, Loss of documents and dishonesty cover

Do check whether your indemnity policy covers the claims arising because of issues like unintentional breach of confidentiality and loss of documents. Usually, none of the indemnity policies cover claims arising from fraud or dishonesty.

09. Runoff cover

If you are planning to retire from medical practice then having a runoff cover add-on feature is a good idea. It will ensure that you are covered for the next three years without the need of renewal of your policy post retirement.

10. Mandatory security deposit

As per the new Consumer Protection Act 2019, if you are not satisfied with the verdict of lower court and you want to appeal in a higher court, then you are supposed to deposit fifty percent of the award in the court. Always ensure that your insurer bears this liability and not you.

11. Claim based versus event based policy

Most of the insurers provide a claim based policy. Insurers often create problems and deny the claim awarded by the court. Do ensure that policies are both event based and claim based. Media liability policies are often both event based and claim based. Commercial liability policies are event based.

12. Group insurance discounts

If you have the option of availing group insurance through an association of doctors, you may like to opt the same. Group insurance policies are usually discounted in favour of the members.

13. Who fills the application form?

Relying on agents of insurance companies (intermediaries) to fill up the indemnity application form is not a good idea. Always fill up the application form by your own hand or through a knowledgeable staff.

14. Are you covered enough?

Doctors are often covered for pittance amounts of insurance cover (sum assured). It is recommended to have insurance cover in line with the current awards by consumer courts. Surgeons (surgical specialities) should not have anything less than 1 to 2 Crores, while Physicians (medical specialities) not less than 1 Crore of insurance cover.

15. Are your attendants covered?

Errors and Omissions policies are specially designed to cover non-qualified attendants in the medical establishment / single-doctor clinic. One must avail the same by paying an add-on premium amount of 7.5% over the calculated premium.

16. Do government doctors need coverage?

Consumer and Civil courts have held doctors in all sectors of society, private or government, liable to pay compensation. Doctors in government sector, trust- or society-run hospitals, defence forces, all have been held liable under the Consumer or Civil courts. Indemnity insurance is mandatory for every practising doctor.

In the end, it is reiterated that professional indemnity insurance is mandatory, not an option, for protecting doctors themselves and their medical establishments against liability for cases of proven medical negligence or liability in tort.