It is very important to know the various clauses attached to the doctor’s professional indemnity insurance. Claims series clause in Doctor’s PI insurance is one of the important clauses which plays the pivotal role as it benefits the insured in terms of the limit of deductible payable.
Claim series clause defines as a series of different claims arising from the same cause of neglect, error or omission which will be accumulated under one single claim and the allocation of deductibles is applied to that one single accumulated claim. If multiple claims arise for a particular act of negligence or error, then all such losses shall be added together and insured has to pay a deductible amount only once in such case.
For example, A case of gross negligence was filed against the hospital where initially a claim of Rs.50,000 is reported. Later due to the same reason of negligence performed by the hospital in past, the patient suffered a severe disease, which has to be operated immediately and costs incurred in the operation is around Rs. 2,00,000. In such case, both the claim occurred because of the same event of negligence from hospital’s part. Hence the hospital needs to pay a single deductible amount, in the very first claim of doctors professional indemnity insurance, other claims arising due to the same cause of event shall not have the limit of deductible attached.
Hence, the deductible will be payable only once under doctors professional indemnity policy as multiple claims arising due to the same event will be treated as one claim. But there is a condition, provided that no claims should arise from the specific cause later than 3 years after the first claim of the series.
For example, A claim first occurred and reported in 2010. The hospital renewed its policy on time for 6 years. Later, a claim was reported in 2015 because of the same cause of event occurred in 2010. Under such case, the claim has been reported after 5 years from the first claim of the series hence, the deductible limit will be applied in the second claim of the series as well.
Case Study: A.B. hospital has a doctor’s professional indemnity insurance. A claim has been registered against the doctor for the wrong prescription of medicine. The doctor alleged to prescribe such medicines which resulted in allergy so the patient filed a case against the doctor. The doctor’s professional indemnity covered the claim after the payment of deductible by the insured. Later after six months, the patient sued the doctor again against the same event of the wrong prescription as he became aware of an organ damage due to the excessive intake of the prescribed medicines by the doctor. This time the insurer has not asked the insured to pay the deductible amount since the loss of event is same. An insurer will bear the defence cost without any deductible payable by insured.
It is important to know the application of claims series clause in Doctor’s PI insurance policy. This clause is applicable in every liability insurance policy. Claim series clause is attached with liability insurance in order to determine the amount of coverage the insured is responsible to pay when a series of losses have given rise to a claim.