Professional indemnity cover premium depends on speciality

Published in Mint on 23rd Dec 2014, Written by Abhishek Bondia

I might need a joint replacement surgery soon. Can I take an insurance policy to meet my surgery related expenses?
—Vaibhav Ghosh

Insurers will consider your joint replacement as a pre-existing ailment and exclude it for a few years. Many insurers also explicitly include a waiting period for joint replacements. From an insurer’s perspective, the economics do not justify immediate cover. Consider that an individual Rs.5-lakh sum assured plan for a 60-year-old costs about Rs.18,000. But a knee replacement surgery costs between Rs.2 lakh and Rs.10 lakh, depending on the implant. Be careful of ‘schemes’ that promise such cover immediately.

The only exception is to avail cover through group medical insurance provided by employers. When a large number of members are covered together, insurers forego individual underwriting for members and waive off waiting period for pre-existing conditions. You can be covered under a group insurance as an employee yourself or a dependent, i.e., spouse or parent.

What is the coverage under a professional indemnity (PI) policy for doctors?
—Rajesh Shukla

PI for doctors covers legal expenses arising out of suits filed against the doctor for negligence in performing duty. The policy covers defense costs—lawyer fees and compensation awarded by the court. If an out of court settlement is authorized by the insurer, that is also covered. The policy gets triggered as soon as a notice is served on the insured.

Some scenarios of doctors facing litigation are a patient alleging negligent diagnosis or providing sub-standard course of treatment or loss of patient records.

Doctors often face legal threats irrespective of whether they were at fault. A PI policy cover is initiated even if there is a mere allegation. It costs around Rs.50,000 for Rs.1-crore cover for a plastic surgeon. For physicians, and other categories of doctors, it is substantially cheaper.

The rates depend on the doctor’s speciality, equipment used and the extent and quality of nursing staff.

I am 50 years old and had an angioplasty a year ago. What is the cover I can expect to get and how much costlier will my premium payments be?
—Mahesh

Insurers hesitate to issue health insurance if you have recently had a serious hospitalization. The cover offered will vary considerably across insurers.

Several insurers will not issue a policy at all, while some may issue up to Rs.5 lakh with 50-200% loading on the base premium.

The good news is that some insurers have introduced plans exclusively for people with cardiac ailments. Such plans have relatively lower waiting period for cardiac ailments. However, these plans are expensive and have a few restrictions, for example, room rent capping. If you meet their conditions for issuance, I will recommend you take one of these plans.

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