Though Doctors have been revered almost as much as Gods in our society, there has been a recent rise in patient claims against them. In the present situation, either because of a few doctors who are engaged in malpractice or due to certain hospitals that have recommended unnecessary medical procedures in order to extract more money, many are looking at the doctors’ community with mistrust. More and more patients and their families have been suing hospitals and doctors against malpractice or negligence. In case the verdict goes against these doctors, they have to pay hefty compensation to patients.
As a result, if you are a doctor, it has become essential to purchase a doctor’s professional indemnity insurance which provides financial coverage against legal liabilities. The insurer compensates the other party on behalf of the policyholder and covers legal expenses as well.
The cost of a doctor’s professional indemnity insurance premium depends on the sum insured, the profile of the policyholder, and their expected earnings apart from the risk involved. Usually the premium of a doctor’s professional indemnity insurance varies between 0.3%-1% of the total sum insured.
Doctors who are members of a group can often negotiate a better premium rate. Some physicians may face higher risks than others. For instance, gynaecologists, orthopedics, cardiologists, etc. have to pay higher premiums as they usually have to deal with more complex risks than a general practitioner.
A doctor’s professional indemnity insurance cost can also depend on the following:
- Risk group of doctors
- Limits of indemnity selected
- Ratio of limits
The size of the hospital or clinic will also help in deciding premium rates. A multi-speciality hospital with 500 beds would have to pay higher premium for doctor’s professional indemnity insurance than a hospital or clinic which has 10 beds. Those policies which offer the most coverage cost more than those policies which offer the lesser coverages. The premium also depends on the medical equipment used and the expertise of nursing staff.
The record of claims also helps in deciding the premium as well. You might have to pay more premium at the time of policy renewal if in the previous year you have filed for a heavy claim amount.
The deductibles also have an impact on the premium calculation. In insurance, the deductible is the amount that you would have to pay at the time of claim before the insurer settles the claim. If you opt for a high deductible, your premium would be low and vice-versa.
Case on doctors professional indemnity
Ajay Verma was busy in office, preparing for his meeting with the boss, when he suddenly started feeling uneasy, and fainted. He was rushed to the hospital where initial medical reports suggested a minor cardiac arrest. The cardiologist started the treatment immediately with some medicines and injections to Ajay, who unfortunately died in an hour.
The post-mortem revealed that Ajay had been allergic to certain medicines, and the doctor had administered these medicines to him without examining his medical history.
The death of Ajay not only caused emotional loss but financially troubled the family as well who was dependent on his income. His wife filed a case against the cardiologist for medical negligence, and the verdict was given in her favour. The doctor was asked to pay compensation of Rs 50 lakh to Ajay’s family. In this case, the doctor had to dig into his savings and sell off his plot to pay compensation.
The situation would have been different if the cardiologist had a doctor’s professional indemnity insurance policy. The insurer would have compensated Ajay’s family on behalf of the doctor and also covered the legal expenses.
Now that the doctor wants to buy the policy, here are some of the factors which would decide the doctor’s professional indemnity premium:
- Previous claim record
- Coverage opted for
In this case, as the insurance applicant was a cardiologist, the insurer would consider this fact and charge premium accordingly. Also, if the doctor chooses a high deductible, he can lower the cost of his policy.