A medical indemnity insurance policy covers claims in case of misdiagnosis, delays in referrals, error and omission, wrong treatments, or negligence either by doctors or the unqualified staff members of a hospital or clinic.
This policy also covers the unqualified staff of a medical establishment. However, it comes at an additional premium.
Key Takeaways
-
The Vicarious Liability Shield: As seen in the case studies, courts often hold the doctor responsible for the errors of their assistants. This policy bridges that gap, ensuring that a compounder’s mistake doesn’t wipe out a doctor’s personal savings.
-
Declaration is Crucial: To ensure the policy is valid, you must be transparent about your staff count. If you employ 10 ward boys but only declare 5, the insurer may apply the “Pro-Rata” rule, significantly reducing your claim payout.
-
Medication Error Protection: Wrong dosages and allergic reactions are among the most common causes of medical lawsuits. A professional indemnity policy specifically targets these high-risk areas, providing a financial buffer against “Gross Negligence” allegations.
-
Reputation & Security: Beyond the money, the policy provides a specialized Medical Lawyer. This allows the doctor to continue practicing and saving lives while the legal experts handle the complexities of the FIR or court summons.
-
Comprehensive Financial Support: The policy doesn’t just pay the patient; it pays the Court Fees and Civil Fines, which can be substantial in multi-year litigations.
The unqualified staff here comprises compounders, ward boys, and nurses. The policy also covers other staff members working at a hospital or clinic. However, it is important that the doctor declare the number of untrained staff when filling out the proposal form. This allows the insurer to price the liability insurance properly.
So, the insurance covers the cost of litigation, settlement, court fee, civil fines, and expenses. Some insurers may appoint a medical lawyer to support the insured.
Here we will examine two instances where the policy has provided coverage to different medical establishments from litigation and compensation expenses.
Case Study 1:
A 40-year-old man admitted to M.N. Clinic died after a staff member gave him the wrong medicine without testing for allergies. The patient had a severe allergic reaction. An FIR was lodged against the private clinic on account of gross negligence.
The medical indemnity insurance policy took care of the clinic’s litigation costs and the compensation amount.
Case Study 2:
In the second instance, a patient died of the wrong dose of painkillers. The compounder had mixed up the medicines. This led to the patient’s family lodging a police complaint against a doctor alleging gross negligence. The doctor was found guilty during the investigations and the family was duly compensated. This was even though the error was that of the compounder.
In this case, too, the policy took care of the litigation cost as well as the settlement amount since the hospital was covered under the medical indemnity insurance.
Being covered under the indemnity insurance policy is crucial for medical establishments in today’s world. It is equally important to cover all staff members and doctors to avoid additional expenses in case of lawsuits.
Summary: Medical Indemnity for Establishments & Staff
Thus, we can conclude that the doctor’s professional indemnity insurance is crucial for medical professionals and institutions as it safeguards the reputation of a hospital.
Moreover, this policy provides a sense of security to the doctors while they are rendering professional medical services. It is not always possible to predict outcomes accurately. However, doctors feel secure when the cost of handling adverse outcomes is insured.
Frequently Asked Questions (FAQs)
Q1: Why do I have to pay an extra premium for “Unqualified Staff”?
A) Untrained or support staff often handle critical tasks like administering medicine or moving patients. Because they lack formal medical degrees, the risk of a procedural error is statistically higher, which is why insurers charge a small additional premium to cover their actions.
Q2: Will the policy cover me if a staff member intentionally harms a patient?
A) No. Professional indemnity insurance is strictly for accidental and unintentional errors. Any criminal act, intentional harm, or “willful misconduct” by a staff member is a standard exclusion in almost every policy.
Q3: What happens if I hire a new nurse mid-year? Is she covered?
A) Usually, you should inform your insurer or broker when your staff count increases. Some policies allow for a small buffer, but for significant changes, it’s best to issue an endorsement to ensure the new staff member is officially protected under the “Vicarious Liability” clause.
Q4: Does the policy cover the legal costs if an FIR is lodged against me?
A) Yes. If the FIR is related to alleged medical negligence during the course of professional service, the policy covers the legal fees required to defend the case in court, as well as the costs for anticipatory bail or other legal filings.
Q5: Can the “Compounder” in Case Study 2 be sued personally?
A) While the family can name the compounder in the suit, the primary financial liability almost always falls on the doctor or the clinic owner. The indemnity policy is designed to protect the employer (the doctor/hospital) from these third-party liabilities.
About The Author
Saloni Mishra
MBA Insurance Management
With an illustrious career in the insurance sector, Saloni is a distinguished writer specializing in articles concerning doctor professional indemnity policies for SecureNow. Leveraging 12 years of hands-on experience, she understands the intricate nuances of professional indemnity insurance tailored specifically for medical professionals. Her articles offer invaluable insights into the significance of doctor professional indemnity coverage, addressing the unique risks and challenges healthcare practitioners face. Renowned for their expertise and attention to detail, Saloni is committed to providing readers with informative and actionable content that empowers them to make informed decisions regarding their insurance needs.
