In a candid conversation with Drug Today Medical Times, Mr. Ashu Bajaj, Business Head of Commercial Lines at Policybazaar, shared his insights into the growing importance of professional indemnity insurance for doctors in India. With the rise of medical litigation and increasing legal complexities, professional indemnity insurance has become a crucial shield for medical professionals, offering not just financial protection but also preserving their reputation. Below, Mr. Bajaj answers key questions on this topic, shedding light on its coverage, premiums, and the factors doctors should consider when choosing the right policy.

DTMT: Why has professional indemnity insurance become essential for doctors in India?

Mr. Ashu Bajaj: Professional indemnity insurance has become a necessity for doctors in India due to several key factors. The rise in medical litigation is a significant concern, as more patients are becoming aware of their rights. The inclusion of medical services under the Consumer Protection Act has further facilitated the filing of complaints against doctors and hospitals. Additionally, compensation claims in medical negligence cases have seen a sharp increase, with courts awarding substantial sums. Even defending against a malpractice claim, regardless of the outcome, can be financially draining. Professional indemnity insurance alleviates this burden by covering legal fees and compensation costs. Moreover, the increasing complexity of medical procedures, driven by technological advancements, has heightened the risks for healthcare professionals. A minor error or unforeseen complication can lead to allegations of negligence. With indemnity coverage, doctors can focus on patient care without the constant fear of financial liability stemming from legal actions.

DTMT: What specific risks are covered under a standard professional indemnity policy, and what are some notable exclusions?

Mr. Ashu Bajaj: A standard professional indemnity insurance policy for doctors in India covers various professional risks, including legal liability, defamation, loss of third-party documents, and allegations of breaches of confidentiality. Additionally, it provides coverage for out-of-court settlements and legal expenses, both of which are significant concerns for medical professionals. This protection ensures that doctors are safeguarded against financial and reputational risks arising from errors or omissions in their practice. However, the policy does not cover losses resulting from intentional misconduct, criminal actions, or wrongful conduct by the insured party. It also excludes damage to property. Doctors must remain mindful of these exclusions and adhere to professional ethics and legal standards to avoid liabilities that fall outside the scope of their insurance coverage.

DTMT: Can professional indemnity insurance help safeguard a doctor's reputation in addition to their financial stability?

Mr. Ashu Bajaj: Absolutely. Professional indemnity insurance not only protects doctors from financial liabilities but also plays a crucial role in preserving their reputation. The policy covers legal fees, allowing doctors to defend themselves effectively in court without facing financial strain. Successfully fighting a lawsuit not only removes the immediate financial burden but also helps restore a doctor’s credibility. Clearing allegations strengthens trust among patients and peers, which is vital in a profession where reputation is paramount. In this way, indemnity insurance ensures that doctors can continue their practice with confidence, even when facing legal challenges.

DTMT: How does the premium for professional indemnity coverage compare to the costs of litigation?

Mr. Ashu Bajaj: Professional indemnity insurance provides immense financial relief when compared to the high costs of litigation. For instance, if a doctor secures coverage worth INR 1 crore for an annual premium of just INR 2,500, and a patient files a medical negligence case leading to a compensation award of INR 50 lakhs, the insurance covers both legal fees and the compensation amount. Without insurance, the doctor would have to bear this financial burden personally. In contrast, paying a nominal annual premium is a small price to ensure financial protection against potentially devastating legal expenses.

DTMT: What factors should a doctor consider while choosing professional indemnity insurance?

Mr. Ashu Bajaj: When selecting professional indemnity insurance, doctors must evaluate several critical aspects to ensure comprehensive protection:

Risk Based on Specialization: Different medical specialties have varying levels of risk. For instance, surgeons face a higher likelihood of patient claims compared to general practitioners. Doctors should assess the specific risks of their practice and choose an appropriate policy accordingly.

Coverage Amount: The sum insured should reflect the potential financial impact of a malpractice lawsuit. Selecting an adequate coverage limit ensures that legal fees, compensation, and related expenses are fully covered, preventing financial strain.

Choice of Broker: A reputable broker with experience in medical indemnity insurance is crucial. A knowledgeable broker can guide doctors in choosing the right policy, explain policy intricacies, and ensure smooth claims processing when needed.

Claim History of the Insurer: Doctors should investigate the insurer’s track record regarding claims settlements. A provider with a reputation for fair and prompt claim processing offers better peace of mind in case of legal disputes.

Indemnity Ratio (AOA:AOY): The "Any One Accident" (AOA) to "Any One Year" (AOY) ratio determines how much coverage is available per claim and the total coverage over a policy year. A low AOA:AOY ratio could limit coverage in the event of multiple claims, so doctors must evaluate this aspect to ensure sufficient protection throughout the policy period.

DTMT: How do group indemnity policies differ from individual ones for medical professionals?

Mr. Ashu Bajaj: Group and individual indemnity policies have distinct differences in terms of coverage and flexibility:

Coverage Scope: Individual policies cover a single doctor, protecting them against claims related to their personal practice. Group policies, on the other hand, are designed for multiple professionals, typically covering hospitals, clinics, or healthcare organizations.

Flexibility in Practice: Individual policies remain valid regardless of where the doctor practices. However, group policies, also known as Medical Establishment Indemnity, only cover claims arising from work performed within the insured institution. This means doctors practicing outside the covered institution will not be protected by the group policy.

Benefits & Coverage Limits: In a group policy, the coverage limits and benefits are determined by the institution offering the policy. Individual policyholders, however, have the flexibility to customize their coverage based on their specific needs and risk exposure.

Professional indemnity insurance has become an indispensable safeguard for doctors in India. With rising litigation, high compensation claims, and increasing complexity in medical procedures, having the right insurance policy ensures that doctors can continue their practice with financial security and peace of mind.